Ethereum Layer 2: The Development and Competition of Rollup Technology

Layer2 is one of the key solutions to address the scalability issues of Ethereum. By building an additional network layer on top of the Ethereum main chain, it can handle more transactions while maintaining the security and decentralization characteristics of the main chain.

Rollup is currently the most mainstream Layer2 scaling solution, which processes transactions off-chain and then "packs" the transaction data into the main chain. Compared to other off-chain transaction solutions, Rollup has three characteristics:

1. Layer2 is an independent platform where users can trade, but interaction with Layer1 accounts must be done through smart contracts.

2. All transaction information is fully recorded on the main chain, solving the data availability problem.

3. Transactions are executed on Layer2, but the state summary is published to Layer1 and locked after verification.

According to the different validity verification methods of data, Rollups can be divided into Optimistic Rollups and ZK Rollups.

Rollup Development History

Sidechains are one of the earliest Layer 2 solutions; they are independent blockchains linked to the main chain, with their own consensus model.

Plasma is a Layer 2 scaling solution proposed in 2017, and it is an evolution of sidechains. Plasma chains are built outside of Ethereum, forming a tree-like network that splits large computational tasks to be processed by child chains.

Plasma has disadvantages such as data availability attacks, long exit periods, and heavy user monitoring burdens, which have hindered its development since 2019.

At this time, the Optimistic Rollup solution was proposed to solve the data availability problem of Plasma. The ZK Rollup, on the other hand, originates from the zero-knowledge proof technology introduced in 2018.

In 2019, the Plonk algorithm solved the trusted setup problem of zk-SNARK, accelerating the development of ZK Rollup.

Rollup Track Competition

Currently, Optimistic Rollups account for the majority of TVL, but ZK Rollups are gaining increasing attention.

Optimistic Rollups

Optimistic Rollups assume that most transactions are valid, allowing for challenges and rollbacks when fraud is detected. The representative solutions are Arbitrum and Optimism.

Arbitrum launched its mainnet in September 2021 and is the Layer 2 protocol with the highest TVL. Its ecosystem includes three networks: Arbitrum One, Arbitrum Nova, and Arbitrum Orbit.

Optimism launched its mainnet in August 2021, boasting the second largest TVL in Layer 2. Its OP Stack open-source toolkit introduces the concept of superchains, with dozens of projects already built on it.

ZK Rollups

ZK Rollups use zero-knowledge proofs to ensure the validity of off-chain transactions, providing higher security and efficiency. Representative solutions include zkSync, StarkNet, Polygon zkEVM, and Scroll.

zkSync is the first zkEVM project to go live on the mainnet, using "optimistic" transfers to accelerate transactions.

StarkNet adopts zkSTARK solutions and sharding technology to enhance privacy and throughput.

Polygon zkEVM is bytecode compatible with Ethereum, making transactions faster and cheaper.

Scroll is EVM compatible and supports the same programming languages and smart contracts as Ethereum.

Summary

Rollups technology is expected to solve the performance bottlenecks of blockchain. In the short term, Optimistic Rollups may outperform in general EVM computations, while ZK Rollups are more suitable for simple payment scenarios.

In the long run, with technological improvements, ZK Rollups are expected to prevail in all scenarios and become the ultimate solution for Ethereum's scalability.