One of the most intriguing layer-2 scaling options for Ethereum that uses zero-knowledge cryptography to lessen the amount of on-chain data needed is ZK Rollups. As a result, applications on Ethereum are more efficient, private, and cost-effective in terms of network transactions and block space.
Many projects have changed direction and started developing with ZK-Rollup technology as a result of this recent development in the Ethereum ecosystem. In this guide, we list the top 10 ZK Rollup Coins that you should look into and purchase if you want to learn more about the brand-new layer-2 ecosystem.
What issues are resolved by ZK Rollups?
The best layer 2 scaling solution offered by ZK Rollups has lower transaction fees. Users can split the gas fee and so pay less because transactions are “rolled up” and handled collectively. ZK-rollups also help to improve throughput and scalability because all transactions are combined into a single rolled-up transaction. Scalability concerns and high gas costs for Ethereum make scaling solutions like ZK-rollups useful since they use other platforms to settle a portion of the transaction before letting the main Ethereum blockchain know about the transactions that need to be handled.
Benefits of Purchasing ZK Rollup Coins
Vary Existing ZK-rollup platforms provide scalability options and improved security for improved payment systems. Additionally, they frequently include native ZK-rollup coins, which are ideal investments because they let investors support a promising technology. ZK-rollups have a lot of potential and provide a way for blockchain platforms to increase scalability given that blockchain is still in its early stages of development. ZK-rollup coins are excellent investments and serve as a sort of entry point for investors wishing to support the developing tech sector because they fuel blockchain platforms and ecosystems.
Two primary varieties of rollups
Rollups can be divided into two categories: optimistic and zero-knowledge (ZK). Both have the advantage of greatly reducing transaction costs. The concept is that hundreds of transactions would be recorded on the layer 2 chain, then “rolled up” into a single transaction that would then be pushed back to the slower, more expensive blockchain instead of waiting and paying for each transaction to complete independently on Ethereum. By doing this, many people share the expense of that one transaction.
An optimistic rollup is the name of the first variation. This is due to the overly optimistic assumption that every transaction in a rollup is legitimate. Optimistic rollups allow all users on the network to challenge erroneous transactions for a certain period of time, typically one week. The Optimistic rollup has the advantage of being rapid because it saves the network time by making the assumption that everything is correct. The disadvantage is that official withdrawals from well-known networks like Optimism or Arbirtrum typically take around a week.
A Zero-Knowledge rollup, commonly referred to as a ZK-rollup, is the second type of rollup. These protocols use a difficult cryptographic technique known as a Zero-Knowledge proof to establish the validity of a transaction using only the barest of transactional details. It is stylish, protects privacy, and, most importantly, is quick and affordable. ZK-rollups enable users to withdraw their funds with less of a delay than an Optimistic rollup, which necessitates funds to remain on the network until the dispute resolution time has ended.
In terms of speed and security, ZK-rollups have a number of advantages to Optimistic rollups, but they are significantly more complicated inside. All ZK-rollups that have been released into the market thus far have unique applications, which means that they can only support a certain service or use case (like swapping non-fungible tokens or transferring crypto between addresses).
Teams from Polygon, Matter Labs, and Scroll claim to be close to releasing the first zkEVMs—ZK-rollups that operate exactly like Ethereum’s mainnet—thanks to recent developments in encryption. These improved ZK-rollups should be able to handle almost any application developers would care to build on Ethereum, making things far speedier and less expensive for end users. This is similar to today’s popular Optimistic rollups.
Application of rollups in Ethereum
Rollup usage is simple. Rollups based on optimism and those based on zero knowledge function almost identically. To execute the transactions you wish to make on the rollup, such as buying and selling cryptocurrencies or NFTs, moving money between wallets, or interacting with DeFi protocols, the goal is to bridge your funds to the layer 2 network. You can transfer your money back to Ethereum once the transaction is complete. Here is a quick overview of how that functions.
You must first add ETH or ERC-20 tokens, which are tokens compatible with the Ethereum blockchain, to your cryptocurrency wallet, such as a MetaMask. The layer 2 network will then need to be your wallet’s new home. The procedure is the same for any DeFi protocol; simply select “connect wallet.” You should “bridge” your tokens, or move them from one network to another, after you’ve connected your wallet to layer 2.
To bridge your funds to a rollup, you will have to pay an Ethereum transaction fee. You can trade as usual after your money is on the rollup. Transaction fees on some networks, like Optimism, cost you ETH, though they’re considerably less expensive than on Ethereum itself. Some companies, like Loopring, seldom impose any transaction fees at all.
You can always bridge your coins back to Ethereum after completing the transactions you set out to execute. In order to do that, rollup money must be changed back into ERC-20 tokens, which are exclusive to the Ethereum mainnet. The steps are same; proceed to the token bridge to withdraw your money.
Last Words on ZK Rollups
ZK-rollups should yet be improved, but overall the blockchain industry has benefited from these zero-knowledge cryptographic solutions. They are essential to attaining scalability, which is still one of Ethereum’s key problems. They also offer quicker processing times and lower fees, which boosts the effectiveness of blockchain ecosystems. ZK-rollups will reach new levels of invention in the upcoming years with more research and the ongoing innovation seen in the tech sector.