msfew@Foresight Ventures
This post focuses on the Layer2 Rollup universe of Ethereum (only including Secured Rollup), and will explore the good and bad of the current Rollups from the core concepts and mechanism design in an easy-to-understand way, and think about the potential routes and advantages and disadvantages of each of their future solutions in terms of decentralization, further scaling, composability, and additional features such as privacy.
A Secured Rollup is a Rollup model like Arbitrum or Optimism, where settlement, consensus, and data availability all rely on L1s like Ethereum, and only handle the execution itself.
If a Rollup uses a scheme other than L1 for settlement, consensus, or data availability, then it is not a pure Secured Rollup, and it is not in our narrow definition of Rollup.
There are two ways to scale a blockchain: one is to optimize the blockchain itself, and the other is to use the blockchain in a better way.
Rollup is the second type, and its real essence is simple: faster, cheaper and “trusted” use of the blockchain, to scale the blockchain (basically referring to Ethereum in particular).
Rollup is: an on-chain smart contract + an off-chain aggregator.
It’s as simple as that. The combination of these two features defines Rollup and fleshes out its concept.
The mechanism of Ethereum is that each node stores and executes every transaction submitted to it, so such a decentralized network is very expensive.
The mechanism of Optimistic Rollup represented by Aribitrum and Optimism, and the mechanism of zk Rollup represented by zkSync and StarkNet are shown later for the reader to understand briefly.
Optimistic Rollup is, as the name suggests, optimistic. It uses a presumption of innocence, where everyone will believe by default that each execution is correct, and security is ensured by the fact that each batch state can be challenged by fraud proof.
Users submit transactions in Arbitrum network, and Arbitrum’s sequencer executes the transactions, submitting the complete state root and transaction data in batches to a smart contract on the Ethereum mainnet.
What if the Optimistic Rollup execution generates errors?
zk Rollup, as the name implies, uses zk zero-knowledge proof technology (actually Validity Proof). It uses the presumption of guilt, where people will default to questioning that each execution is wrong, and security is ensured by the proofs contained in each batch.
Users submit transactions in zkSync, the sequencer of zkSync executes and stores the transactions, and submits the proof of state and the new state in batches to the smart contract on the Ethereum mainnet in full.
How can zk prove that execution is not wrong?
How do they compress data, thereby reducing gas fees?
Why do the data uploaded to mainnet need to be in full (for a Secured Rollup)?
If you still can’t understand it, you can check the diagram below.
Optimistic Rollup is designed more like Arweave, using economics and game theory to design a mechanism that performs well but is not really guaranteed to be 100% correct.
zk Rollup design is more like Filecoin, which uses cryptography and mathematics to design a mechanism that is guaranteed to be 100% correct but always has additional computational and time overhead.
The difference is that one uses a challenge period to ensure that errors can be corrected, and the other uses cryptography to ensure that errors cannot occur.
We will compare them in detail later by their end-game performance.
Let’s start by taking about what is great about the Rollups as a whole:
Besides, if you are interested in the comparison between subnets and Rollup, you can refer to our previous study, and Toghrui’s view.
In more detail, the performance of the major Optimistic Rollups and zk Rollups are given below:
In addition to Rollup, which is an Ethereum-based network, there are these:
The different designs of the Rollup solution have many unique features that have truly served countless users and brought about a better crypto and blockchain experience.
After the praise in the previous chapter, we will point out in this section some of the issues that Rollup needs to address:
The silky smooth user experience of the Rollup network is obtained by compromising security, and many components of the network are centralized, although there are three points that can be made to “weasel” around this issue:
However, the centralization of Rollup still leads to problems of censorship and low security. Currently its centralization is mainly reflected in:
In my vision, a network or protocol must ultimately be decentralized and open source, otherwise it goes against the spirit of Crypto and Web3.
Rollup’s current demonstration of super performance is “fake”, the real “finality” is not that good, and there is still room for performance improvement. This is a double-edged sword.
When a user submits a transaction on L2, he/she will immediately get feedback on the success or failure of the transaction, but this immediate user experience is only the finality on L2.
The data does not achieve L1 finality while it is not submitted to L1 or while prover is still in the proof or it is still in the fraud proof window. That is why Rollup has such a great user experience, because the user actually borrows time through Rollup, allowing the user to get a soft confirmation first.
As a result of the above design, the following problems arise:
Using Optimism’s tokens as an example, we examine the business and economic mechanisms of Layer 2 Rollup, the token model, and MEV.
Making the network’s business model decentralized, improving the token mechanism, and dealing with MEV will be the three major obstacles on the way to the Rollup network in terms of token launch and decentralization.
I don’t want to compare the TPS and other numeric performance of the Optimistic and zk Rollups like other posts (read more references at the end of this article if you’re curious), but rather compare them in terms of their nature and characteristics, as well as their long-term end-game performance:
A detailed interpretation of this chart and points of interest are as follows:
Although this graph concludes that Optimistic Rollup will outperform zk Rollup in the long run, the trust guaranteed by the math is stronger. I think the endgame for Rollup performance is Optimistic, but the real overall endgame is zk.
The design is perfect, but the engineering challenge is still huge, and the comparison above is still the same as the TPS comparison, but on paper. We still need to look at the security, decentralization, and actual performance and ecosystem of a Rollup network from a practical point of view.
By comparing Optimistic Rollup with zk Rollup, we actually have a comprehensive view of their future performance optimization options. So what does the future of Rollup look like from other perspectives?
In the decentralized perspective, we focus on the sequencer and contract upgrade problem, in the future, a Rollup must be decentralized, then the following decentralized design is needed:
As a small side note, a comparison of the Arbiturm and Optimism docs shows that they have slightly different attitudeto decentralization.
The composability of Rollup is the ability of smart contracts on different Rollups to read and write directly to each other.
For Rollups on Ethereum, Ethereum as a settlement layer is a shared bridge between Rollups. The future composability between Rollups is likely to be mostly through L2 ⇒ L1 ⇒ L2 to form a call (like the dAMM design by StarkNet).
The real combinability is difficult to achieve due to the different mechanisms between Rollups, which make the tx cannot be verified against each other. This needs to be explored more.
For feature expansion, zk Rollup has even more potential. The concept of L3 makes App-specific Rollup particularly attractive, and Immutable X has announced that it will deploy additional protocols on StarkNet to enable it to exist as an L3.
The appeal of L3 is:
The most interesting feature I foresee in L3 will be:
But the challenge with L3 is how DA is actually handled. We may use several different models:
This is what we need to understand about Rollup.
Beyond that, Rollup has created a myriad of new topics: L3, modular blockchains, data availability solutions, UX enhancements due to account abstraction, new technology stacks, new programming languages, new developers, new auditors…
Everything about Rollup is new, shiny, and yet so early…
How to “use” blockchain better, like Rollup, is a question worth exploring.
Foresight Ventures believes crypto will define the next few decades of innovation. The fund invests early and makes decisions quickly, providing wide-ranging support for projects from its robust ecosystem that includes major market players crypto exchange Bitget and crypto wallet BitKeep. Its founding and partnership team includes veterans of some of the top financial and technology firms dedicated to sourcing and supporting the next generation of disruptive innovations across Web3.
Website: https://www.foresightventures.com/
Twitter: https://twitter.com/ForesightVen
Medium: https://foresightventures.medium.com
https://twitter.com/sanjaypshah/status/1532396051075719170
0a:
https://vitalik.ca/general/2021/01/05/rollup.html
https://twitter.com/bkiepuszewski/status/1532617975433502721
0b:
https://www.paradigm.xyz/2021/01/how-does-optimisms-rollup-really-work
https://www.paradigm.xyz/2021/01/almost-everything-you-need-to-know-about-optimistic-rollup
0c:
https://www.reddit.com/r/ethereum/comments/ty4myx/how_does_zkrollup_validation_work/
0d:
https://starli.medium.com/l2-deep-dive-into-ovm-e2229052ed00
https://starli.medium.com/l2-my-summary-1883a6f1368e
1:
https://twitter.com/toghrulmaharram/status/1531956445490601984
https://www.alexbeckett.xyz/a-snapshot-of-the-current-rollup-ecosystem/
https://twitter.com/epolynya/status/1532560096433033216
2:
https://offchain.medium.com/todays-arbitrum-sequencer-downtime-what-happened-6382a3066fbc
https://twitter.com/mt_1466/status/1491403782290558977
https://kelvinfichter.com/pages/thoughts/tps-is-dumb/
https://twitter.com/bkiepuszewski/status/1533347316702257153
https://twitter.com/bkiepuszewski/status/1533347287400865792
https://newsletter.banklesshq.com/p/the-layer-2-token-endgame?s=r
https://fuel-labs.ghost.io/token-model-layer-2-block-production/
https://twitter.com/norswap/status/1536071589241946112
3:
https://medium.com/starkware/starknet-alpha-0-9-0-dce43cf13490
https://www.alexbeckett.xyz/the-benefits-of-optimistic-rollups-compared-to-zk-rollups/
https://twitter.com/nickels_eth/status/1529947990403825676
3graph:
https://twitter.com/sreeramkannan/status/1530778827466502144
https://twitter.com/sreeramkannan/status/1530790559064829955
https://twitter.com/sreeramkannan/status/1530773769379205120
https://twitter.com/sreeramkannan/status/1530793792361537536
https://www.alexbeckett.xyz/the-path-toward-scaling-rollups/
https://twitter.com/yezhang1998/status/1530892694066974720
https://twitter.com/sreeramkannan/status/1530773572372791296
https://medium.com/privacy-scaling-explorations/zkopru-on-testnet-ba5b2d65ffa1
https://twitter.com/sreeramkannan/status/1530807626744750080
https://twitter.com/sreeramkannan/status/1530806237691990016
https://twitter.com/henrlihenrli/status/1531894565619343361
https://www.alexbeckett.xyz/the-path-toward-scaling-rollups/
https://kelvinfichter.com/pages/thoughts/hybrid-rollups/
4a:
https://medium.com/ethereum-optimism/our-pragmatic-path-to-decentralization-cb5805ca43c1
https://twitter.com/StarkNet_ZH/status/1514158529665396737
https://polynya.medium.com/brainstorming-sequencer-consensus-mechanisms-d7304bae4765
https://www.alexbeckett.xyz/decentralized-sequencers-where-do-we-go-next/
https://blog.polygon.technology/zkverse-deep-dive-into-polygon-hermez-2-0/
https://twitter.com/ChainLinkGod/status/1533618278538457088
https://twitter.com/jon_charb/status/1519443321206226950
https://twitter.com/sui414/status/1532088483296120832
https://docs.hermez.io/zkEVM/overview/#what-is-polygon-hermez-20
https://community.starknet.io/t/starknet-decentralization-tendermint-based-suggestion/998
https://ethresear.ch/t/proof-of-efficiency-a-new-consensus-mechanism-for-zk-rollups/11988
https://ethresear.ch/t/a-design-of-decentralized-zk-rollups-based-on-eip-4844/12434
4b:
https://www.alexbeckett.xyz/composability-in-a-rollup-ecosystem/
https://medium.com/starkware/damm-decentralized-amm-59b329fb4cc3
4c:
https://twitter.com/jon_charb/status/1519443321206226950
https://twitter.com/sui414/status/1532088483296120832
https://twitter.com/chrisyicheng/status/1535954524145299456
https://twitter.com/toghrulmaharram/status/1536043923931598850
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