Ethereum's Evolution in 2023: Embracing Scalability through Layer-2 Solutions and Rollups
Summary:
The Ethereum ecosystem has witnessed significant growth in 2023, focusing on scalability improvements and protocols to enhance throughput and lower costs for decentralized applications (DApps) and users. Two types of rollups, optimistic rollups and zero-knowledge rollups (ZK-rollups), are aiding in Ethereum's scalability. Key players have emerged in the Ethereum scalability space, including Polygon with its own Polygon zkEVM and its Chain Development Kit. ZkSync Era also launched as the first Ethereum Virtual Machine-compatible ZK-rollup. Furthermore, Consensys, the entity behind many essential Ethereum products, made strides with its zkEVM network, Linea. Another significant layer-2 solution, Starknet, has lent a hand in scaling Ethereum with its approach to bundling transactions. The entry of additional ZK-powered layer-2 protocols has created healthy competition in the ecosystem.
The year 2023 saw the Ethereum ecosystem evolve dramatically, shifting attention towards scalability enhancements and protocols that boost the efficiency and affordability of decentralized applications (DApps) and their users. The transition from energy-consuming proof-of-work mining to proof-of-stake consensus polished the groundwork for unprecedented scalability improvements, previously deemed unachievable before the Merge. Multiple strategies have been developed to increase the network's transaction-handling capability without adding to the size of the nodes. Layer-2 solutions, independent networks that process and collate transactions as "rollups" before submitting summarized data to Ethereum, have emerged as the preferred method for enhancing Ethereum's scalability.
In Ethereum's ecosystem, two kinds of rollups aid in its scalability. Optimistic rollups, which process transactions off-chain and transfer transaction metadata to the mainnet as call data, is the first. These rollups are called "optimistic" because they deem off-chain transactions to be valid without providing validity proofs for the transaction batches posted on-chain. This distinguishes them from zero-knowledge rollups (ZK-rollups), which also compile transactions off-chain but present a validity proof for all the changes needed to represent all transactions in a batch.
There's no delay in transferring funds from a ZK-rollup to Ethereum's mainnet because transactions are validated as soon as the ZK-rollup contract verifies the proof of validity. Withdrawing from optimistic rollups has a delay, giving users the opportunity to perform fraud proofs for validating batched transactions.
Polygon has emerged as a key player in the Ethereum scalability landscape in 2023, with its Polygon zkEVM and its Chain Development Kit, which enables developers to launch custom ZK-powered layer-2 protocols on Ethereum based on their project's specifications. ZkSync Era also took the initiative as the first Ethereum Virtual Machine-compatible ZK-rollup to unveil an alpha version of its network. Meanwhile, Consensys, the development company behind significant Ethereum products like MetaMask, made an entry into the ZK-rollup race with its zkEVM network, Linea. Starknet, another layer-2 solution that bundles transactions into an off-chain computed STARK proof, adds to the list.
The latter half of 2023 saw an increase in the number of ZK-powered layer 2s, with the addition of Scroll, a new zkEVM, contributing to a healthier competition in the Ethereum ecosystem. As per data, ZK-rollups continue to draw considerable value from the more extensive Ethereum system, primarily due to the increased throughput and decreased costs provided by the main players touted above.
Published At
12/25/2023 4:26:00 PM
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