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For years, Web3 developers have struggled to make their systems scalable. When new technologies come on the scene, they are typically launched in a monolithic fashion, with everything contained in a single stack. However, as these technologies mature, they become more specialized and different companies are honing different aspects of the stack to increase scalability.
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This is happening now with blockchains. Each layer in the stack is optimized in a modular fashion, and Web3 developers are adopting these modular solutions to reduce their costs and improve the efficiency and maintainability of their systems.
For example, execution is increasingly handled by L2s such as Arbitrum and Optimism, which enable much higher throughput and lower costs than execution on Ethereum’s L1. Similarly, the data availability layer is optimized by modular projects such as Celestia and EigenDA.
As the Web3 ecosystem matures, it’s becoming increasingly clear that the future lies in specialization and optimization at every layer of the stack. By enabling specialized teams to perfect different components of the stack, we can achieve levels of scalability and cost-efficiency that simply weren’t possible with monolithic designs.
ZK rollups as an endgame for blockchain scalability
The journey to scalability really starts to come into focus when we consider the rise of ZK-based technologies such as zero-knowledge rollups.
ZK rollups have emerged as the optimal scaling solution for blockchains because they use zero-knowledge proofs (ZKPs) to validate transactions without revealing sensitive information, but most importantly, they can also validate transactions faster and with minimal gas costs, provided that they built with the right tools. zkVerify, a tool we built exactly for this purpose, is a perfect example of this.
With a ZK rollup L2 chain, many transactions are merged on the L2 and then sent to the L1 as one transaction. This aggregated transaction also contains cryptographic proof, which allows the entire batch to be efficiently verified.
ZKPs are expensive and computationally intensive
Currently, the biggest barrier to ZK systems is efficiently verifying and handling the ZKPs. “Proof verification” is an essential step that ensures a ZKP is cryptographically valid, and it is required for ZK rollups to settle transactions on the L1.
Proof verification is not required for optimistic merges because they rely on another proof system called fraud proofs. By default, all transactions are assumed to be valid, and to ensure security, there is a challenging period during which anyone can provide evidence of fraud if they discover invalid transactions. However, the challenge period can last up to seven days, which delays the finality of transactions. Despite this drawback, optimistic rollups have become the most popular solution for scaling blockchains today.
On the other hand, ZK rollups send the batch transaction along with status data to the underlying L1 for verification. The L1 verifies the proof in the onchain and updates the merge status so that all transactions are valid and immediately final. This approach significantly increases transaction throughput and maintains stronger security guarantees without requiring a long challenge period.
Modular ZKP verification is the solution
Fortunately, modularity can extend beyond the base layer. The same modular approach that has significantly improved L1 chains like Ethereum can also be applied to ZK rollups.
How does this work in practice? Just as Celestia handles data availability on a dedicated blockchain, a standalone chain can handle the proof verification process for ZK rollups (and in general for all systems that rely on ZKPs), while still keeping these batch transactions on the main L1 chain is handled.
By outsourcing proof verification to a modular provider, ZK rollups can focus solely on execution and user experience. The evidence verification chain works in parallel with the ZK rollup, but remains an independent chain.
This approach reduces costs by more than 90% and makes them more stable over time. Instead of having a fee structure dependent on Ethereum (ETH) gas prices – which can be volatile and unpredictable – ZK rollups can offload proof verification to another layer without those fluctuations.
Additionally, this modular proof verification layer can be upgraded beyond the current limits of Ethereum L1, which has certain limitations on the types of precompiles you can use. In layman’s terms, this means that a modular proof verification service can integrate the latest cryptographic innovations in a matter of weeks, while these updates could take years to become available on Ethereum.
Modular proof verification can also be applied to other ZK technologies, including any dApp that relies on zero-knowledge proofs. This is the beauty of a modular solution: it can be applied to any system that needs it.
By standardizing the most expensive step in building systems that use ZKPs, all blockchains can benefit, bringing us one step closer to a scalable and interoperable future.
What happens without modularity?
Looking at the expected growth of web3 in the coming years, proof verification costs for ZK rollups are expected to skyrocket.
At Horizen Labs, we estimate that $47 million will have been spent on proof verification for ZK rollups on Ethereum in 2023, and the entire proof verification market is predicted to be worth $1.5 billion or more by 2028. By 2030, it is estimated that 90 billion proofs will be generated by decentralized applications alone.
The most expensive step in a ZK rollup, evidence verification, needs to be revamped, otherwise it will be a huge challenge for ZK technology to scale to a billion users. There is no reason for ZK rollups and ZK-based applications to incur such costs, and we should not place unnecessary requirements on blockchains that hinder their development.
With modular proof verification, the cost of verifying a single proof can drop from about $20 (considering a Groth16 proof scheme, a gas price of 30 gwei, and an Ethereum price of $3000) to about $1.80. These massive cost savings will unlock new frontiers of innovation in web3, including new ZK apps, Bitcoin ZK rollups, testing systems, and more. Any ZK-based chain or application can benefit from moving evidence verification to a modular solution.
As more zero-knowledge proofs are generated in web3, those proofs will also need to be verified. And as the entire Web3 landscape becomes more modular, it only makes sense to apply that approach to ZKPs as well.
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Rob Viglione
Rob Viglione is co-founder and CEO of Horizen Labs, the development studio behind several leading web3 projects, including zkVerify, Horizen, and ApeChain. Rob served for several years in the United States Air Force and deployed to Afghanistan, where he supported the intelligence efforts of the Special Operations Task Force. During this time, he developed an early interest in Bitcoin, recognizing its potential benefits for countries with unstable economies. Rob is very interested in the scalability of web3, the efficiency of blockchain and zero-knowledge proofs. His work focuses on developing innovative solutions for zk rollups to improve scalability, realize cost savings and increase efficiency. He has a PhD in finance, an MBA in finance and marketing, and a bachelor’s degree in physics and applied mathematics. Rob currently serves on the Board of Directors of the Puerto Rico Blockchain Trade Association.