Rollup’s present, hindrance, race and future

This article focuses on the Layer2 Rollup universe of Ethereum (including Secured rollup only), starting from the simple and easy-to-understand core concepts and mechanism design, to discuss the current good and bad of Rollup, and imagine that they will be decentralized and further expanded in the future. Composability, and the pros and cons of potential routes and solutions for additional features such as privacy.

A Secured Rollup is a model like Arbitrum or Optimism, where settlement, consensus, and data availability all rely on L1 such as Ethereum, and are only responsible for implementation.

If the settlement, consensus, and data availability in the Rollup use a scheme other than L1, then it is not a pure Secured Rollup, and it is not a Rollup in the narrow sense.

Rollup's present, hindrance, race and future

0. The essence and principle of Rollup

a) The essence of Rollup

There are two ways to scale the 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, its real essence is very simple, it is faster, cheaper and “trusted” to use the blockchain to expand the blockchain (basically refer to Ethereum).

Rollup's present, hindrance, race and future

Rollup is: on-chain smart contracts + off-chain aggregators.

It’s that simple. The combination of these two features defines Rollup and enriches its concept.

  • The smart contract on the chain means that its trust model is a smart contract on Ethereum, borrowing the security of Ethereum, rather than needing to establish a new trust consensus like Alt L1. We can trust the Uniswap protocol (core is a smart contract) that trusts Arbitrum’s protocol.
  • Off-chain aggregator, which means that it will execute and aggregate transactions off-chain, compress large-scale transactions, and finally put them on the Ethereum main network to achieve faster and cheaper purposes.

The principle of Ethereum is that every node stores and executes every transaction that a user submits to it, so such a decentralized network is very expensive.

The following is the mechanism principle of Optimistic Rollup represented by Arbitrum and Optimism, and zk Rollup represented by zkSync and StarkNet, which can be easily understood by readers.

b) Principle of Optimistic Rollup

Optimistic Rollup, as the name suggests, is optimistic, using similar to the presumption of innocence, everyone will tacitly believe that each execution is correct, and the security can be guaranteed by the fact that each batch state can be challenged by fraud proof.

Rollup's present, hindrance, race and future

The user submits the transaction in Arbitrum, and the Arbitrum sequencer executes the transaction, and submits the state root and transaction data to the smart contract on the Ethereum mainnet in batches.

Rollup's present, hindrance, race and future

What should I do if an error occurs in the execution of Optimistic Rollup?

  • Optimistic Rollup has a dispute verification cycle , which means that it will take a week for example for the data to be finalized after it is on the chain. During this period, anyone can challenge it to prove that the batch is incorrect.

c) Principle of zk Rollup

As the name suggests, zk Rollup uses zk zero-knowledge proof technology (actually Validity Proof), which is similar to the presumption of guilt. Everyone will default to questioning that each execution is wrong, and the security is guaranteed by the proof contained in each batch. .

Rollup's present, hindrance, race and future

The user submits the transaction in zkSync, the sequencer of zkSync executes and stores the transaction, and submits the state proof and new state to the smart contract on the Ethereum mainnet in batches.

Rollup's present, hindrance, race and future

How does zk prove that its execution is not wrong?

  • Prover (sequencer in most cases) will generate unforgeable proofs for the execution of transactions, proving that these new states and executions are correct. Sequencer will compress data such as proofs and submit them to the smart contract in the Ethereum mainnet for verification .

How do they compress data, thereby reducing gas fees?

  • Rollup can compress on the number of bytes per transaction , including Nonce and signature, etc. For zk Rollup, it can be further compressed without uploading data unrelated to state updates , because zk proofs can already prove state updates However, Optimistic Rollup cannot ignore this part of the data because it needs to be challenged.

Why do they both have to be intact?

  • Because in order to prevent the sequencer from running away , we can reconstruct the entire Layer2 through the data on Ethereum. This is the concept of data availability.

d) The difference between the two Rollups

If you still don’t understand, you can check the diagram below.

Rollup's present, hindrance, race and future

The design of Optimistic Rollup is more like Arweave. The mechanism is designed through economics and games. It has good performance but cannot guarantee 100% correctness.

The design of zk Rollup is more like Filecoin. The mechanism is designed through cryptography and mathematics, which can guarantee 100% correctness but there will always be additional calculation and time overhead.

The difference between them 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 in the following sections through their final performance.

1. Rollup is excellent

First, let’s take a look at the advantages of the Rollup network as a whole:

  • Ecology: Arbitrum ran out of NFT and Metaverse ecology; Optimism issued coins, with governance and community; StarkNet is brewing various GameFi innovations; zkSync has many new DeFi projects. Each Rollup is self-contained One faction.
  • Scaling: TPS is really good, although not as high as the theoretical peak, but the fast confirmation of L2 provides a fast and cheap Web3 experience.
  • Experience: For developers and users, switching to Rollup is a simple matter, and the experience is almost the same as that of Ethereum. Various cross-chain bridges, wallets, Uniswap and other infrastructures also serve users’ smooth experience . This is also supported by a good ecology.
  • Innovation: Rollup is already an excellent soil for Ethereum application innovation, and it is also more imaginative than Polygon’s “large testnet” style network.

In addition, if you are interested in the comparison of subnets and Rollup, you can refer to our previous research , as well as Toghrui’s point of view.

Rollup's present, hindrance, race and future

In more detail, the major Optimistic Rollup and zk Rollup respectively give the following performance:

  • Arbitrum: TVL is around $2.4 billion. The Nitro upgrade has been launched on the testnet, and the existing Arbitrum VM will be replaced with WASM-Geth to optimize performance and adaptability. (We can talk about various WASM in detail in a later article potential)
  • Optimism: The currency has been issued, and many “pioneering and extremely Optimistic experiments” have been made on this basis (all kinds of mistakes, concealing the facts and being indifferent, and recently frequently questioned by disappointed users as “Ethereum Foundation’s” Abandoned Prince”). The Bedrock upgrade will turn VM into MIPS-Geth, achieving EVM equivalence. The developers of Optimism have been talking about the concept of zkMIPS, I wonder if they will work in this direction in the future?
  • StarkNet: At present, the cross-chain bridge has not been fully opened. The special language Cairo and StarkNet development ecology are well built, and the game ecology is worthy of attention. StarkEx’s Validium model has also made dYdX, ImmutableX and other applications. And StarkNet can also be the settlement layer, Build L3.
  • zkSync: The first to make a relatively complete zkEVM. The Volition mode of version 2.0 allows users to flexibly choose the data availability scheme of zkPorter or Ethereum.
  • Aztec: The privacy zk Rollup of the UTXO model will soon support the privacy DeFi ecosystem (but due to the large transaction data size, additional optimization is needed at present). Although it does not support general computing, it is one of the few real zk zk Rollups.
  • Fuel: V1 is an Optimistic Rollup, and it is very decentralized. V2 does not take the usual path, does not adapt to EVM, but supports parallel tx processing through a high-performance VM with a UTXO model, and is committed to creating the fastest execution layer .

In addition to Rollup with Ethereum as the main network, there are also these:

  • everPay: Layer2 based on SCP paradigm on Arweave .
  • Milkomeda: EVM Rollup on Algorand.
  • Orbis: Rollup of Validium mode on Cardano.

The different designs of the Rollup scheme have many unique features, which truly serve countless users and bring a better Crypto and blockchain experience.

2. Rollup needs to be improved

After the praise in the previous chapter, we will point out some of the problems that Rollup needs to solve in this section:

a) Centralization?

The silky 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 “quibble” on this issue:

  1. A zk proof in a zk Rollup is mathematically unforgeable.
  2. The user can reconstruct all states through the DA of L1.
  3. The trust model itself is a centralized smart contract.

However, the centralization of Rollup will still lead to problems such as censorship and extremely low security. At present, its centralization is mainly reflected in:

  • Centralized sequencer : Most of the sequencers of Optimistic Rollup and zk Rollup exist in a centralized form. That is, the execution, sorting, and block generation of tx are all supported by a centralized server. Before Arbitrum was because of the sequencer The hardware problem so the whole network is down…
  • Centralized upgrade : Most Rollup network upgrades are centralized, which means that the actual cost of hacking the entire Rollup is negligible compared to the billions of TVLs on the network. For example, zkSync is managed by a security council Upgrade. Recalling the previous Ronin hack, it is absolutely unsafe to make billions of funds depend on the multi-signature of so many people.
  • Rollup's present, hindrance, race and future
  • Closed source components : Some key components of some Rollup are closed source. For example, almost all key components of StarkNet are not open source, still centralized development, and there is no open open source license. This is not so Web3.

In my vision, as a network or protocol, it must be decentralized and open source in the end, otherwise it goes against the spirit of Crypto and Web3.

b) Real performance?

The ultra-high performance that Rollup has shown so far is “fake”, the real Finality is not that good, and there is still room for improvement. This is a double-edged sword.

When a user submits a transaction on L2, he will immediately get feedback on the success or failure of the transaction, but in fact this instant user experience is only Finality on L2.

During the period when the data has not been submitted to L1 or the Prover is still in the certification or arbitration window, the data has not obtained L1 Finality. Therefore, the user experience of Rollup is so good, in fact, because the user borrowed some time through Rollup, let the user get it first to a soft confirmation.

Due to the above design, the following problems are caused:

  • Fake Finality : The real Finality is when the data is on a real blockchain such as Ethereum, so how fast is the real Finality of Rollup, in other words (of course, if you really want to calculate TPS, a batch of data contains The number of tx should also be taken into account), how often do they submit data to Ethereum? Here is a real analysis of the data on the chain.
  • Rollup's present, hindrance, race and future
  • Overblown TPS : I personally think that TPS is an extremely bad indicator and should be eliminated now. Various Rollups or public chains use countless preset conditions and confusing concepts to calculate a super high or at least higher than competitors High TPS, thus reflecting their power. But in actual use, their performance is still not so “Web3”. In my ideal, the real Web3 experience needs to be completely insensitive, and the entire network must also be decentralized.

c) Economic mechanism?

Rollup's present, hindrance, race and future

We take Optimism’s token as an example to study Layer2 Rollup’s business and economic mechanism, token model, and MEV.

  • Business model : Rollup profit = Layer2 fee – Layer1 block space fee (security cost of storing and verifying data such as proofs on L1) – Computing costs such as node servers. Among them, Layer2 fee = gas fee + MEV + some charged by Layer2 Premium. But users of this business model cannot participate as nodes, only Rollup developers can earn. Below are the benefits and costs of Arbitrum and Optimism on Layer2 fees and Layer1 block space fees.
  • Rollup's present, hindrance, race and future
  • Rollup's present, hindrance, race and future
  • Token mechanism : Although Optimism’s network is good, the token economy is still weak. OP has the following three fatal problems: 1. There is no utility, such as the inability to pay network gas or PoS pledge (of course, these two are not good 2. Unable to capture the value of network revenue and block space, how much money the sequencer earns has nothing to do with the holder. 3. The circulation quantity is very small, the selling pressure is large, and the Accidents make this situation even worse. These problems are not just Optimism’s problems, other Layer2 Rollups are likely to face these challenges as well.
  • MEV : Since Rollup is now a centralized sequencer, these benefits can be captured by the sequencer. MEV is a two-sided thing. On the bright side, the Rollup network can embrace the value of MEV for the network, making it after the network is decentralized An important part of the economic mechanism and miner incentives; at worst, the Rollup network needs to eliminate the existence of any MEV, as it is often considered an additional tax on users. Arbitrum chooses to “ignore” MEV, taking a first come, first However, this has higher requirements on node performance and reduces the cost of DDoS.

Opening the business model of the network, improving the token mechanism, and processing MEV will be the three mountains on the way for the Rollup network to issue coins and decentralize.

3. Final performance comparison between Optimistic Rollup and zk Rollup

Rollup's present, hindrance, race and future

I don’t really want to compare the paper performance of the Optimistic and zk Rollup camps such as TPS like other articles (if you are curious, you can read more references at the end of the article), but will focus on their essence and characteristics, as well as the long-term outcome Performance to compare:

Rollup's present, hindrance, race and future

The detailed interpretation of this picture and the points worthy of attention are as follows:

  1. EVM equivalence implementation difficulty: In fact, in terms of EVM compatibility, node configuration requirements, or optimization, the overall implementation difficulty of zk Rollup is higher than that of Optimistic Rollup. This is actually a way of proving the existence of additional overhead… Additional The proof overhead not only makes the performance of the network always have an extra burden, but also is a huge obstacle to the implementation of EVM-compatible technologies.
  2. Privacy and other requirements can be more easily done: Since zk has been used, it is much easier to develop a truly private zk-zk Rollup than zk-Op Rollup. Of course, there are also zk-Op Rollup projects such as ZKOPRU that have been launched .
  3. Optimization direction: For Optimistic Rollup, parallelized tx processing is a very direct and effective optimization, and if zk Rollup uses the same scheme (the sequencer of the next version of StarkNet can be parallelized), in the long run it will still be Lost to Optimistic Rollup (again because of the extra proof overhead), so zk Rollup will take an alternative to Fractal L3 scaling, that is, continue to build Rollup on top of Rollup. The recursive superpower not only allows L2 to verify that the proof of L3 is correct At the same time, it can also allow L1 to verify whether the verification of L2 to L3 is correct or not.
  4. Specific optimization directions: All are derived from the roadmap and the envisioned design scheme, and there is no practice at present. I personally think that it will take a long time to complete these upgrades. Some of these upgrades have side effects, such as introducing a new mechanism. Additional trust assumptions are required.

Although this graph concludes that the performance of Optimistic Rollup will be higher than zk Rollup in the long run, the trust guaranteed by mathematics is stronger. I think the endgame of Rollup performance is Optimistic, but the real overall endgame will be zk.

Rollup's present, hindrance, race and future

The design is perfect, and the difficulty of engineering implementation is still huge. The above comparison is actually the same as the comparison of TPS, which is just on paper. We still have to start from reality, and go from the security, decentralization, and actual performance of a Rollup network. Observe with ecology.

4. The future of Rollup

Comparing Optimistic Rollup and zk Rollup, we actually have a comprehensive understanding of their future performance optimization solutions. So from other perspectives, what will the future development of Rollup be like?

a) Decentralization

From the perspective of decentralization, we focus on the issue of sequencer and contract upgrade. In thefuture, a Rollup must be decentralized , so the following decentralized design is required:

  • Decentralized sequencer : The sequencer mechanism of Optimistic Rollup will basically be various magic PoS (leader election, MEV auction, rotation mechanism); and zk Rollup’s Proof of Efficiency or Proof of Validity Proof or Tendermint PoS similar to Hermez mechanism. Of course, if the network is a PoS mechanism, then additional capital costs are actually required.
  • Decentralized contract upgrades : Contract upgrades should not be managed by multi-signature, but by decentralized governance (involving tokens) or completely abandoning contract upgrade rights (such as Uniswap V2 upgrade V3 such a non-mandatory upgrade).
  • Multilingual clients : Like Ethereum, multilingual clients are also necessary in decentralization, which can guarantee 100% uptime of the network.
  • Rollup's present, hindrance, race and future

Here is a small supplement. By comparing the Arbiturm and Optimism documents, you can experience their slightly different attitudes towards decentralization.

b) Composability

The composability of Rollup is the ability of smart contracts on different Rollups to directly read and write to each other.

For Rollups on Ethereum, Ethereum, as a settlement layer, is a shared bridge for Rollups. In the future, the composability between Rollups is likely to be mostly formed by L2 ⇒ L1 ⇒ L2 to form a call (such as the dAMM designed by StarkNet). ).

Rollup's present, hindrance, race and future

However, the real composability is difficult to achieve due to the different mechanisms between Rollups and the inability to verify each other, and more exploration is needed.

c) Function

For functional expansion, zk Rollup has more potential. The L3 concept makes App-specific Rollup particularly attractive , and Immutable X has also announced that it will deploy additional protocols on StarkNet to allow it to exist as an L3.

The appeal of L3 is:

  • Let the application transform into a protocol, open its own interfaces and services, and achieve greater composability
  • L1 is used as the hour hand, L2 is used as the minute hand, and L3 is used as the second hand. The overall performance of the network is further improved without affecting the L1 pulse.

I envision the most interesting features of L3 will be:

  • Privacy L3
  • Pure payment L3
  • NFT Market L3
  • Game Engine L3
  • DEX and DeFi L3

But the challenge for L3 is how exactly DA handles it. We might use the following different modes:

  • Secured Rollup: It is still a Rollup, putting DA on L1 like L2, but it may involve a more complex exit mechanism.
  • Validium/Optimistic Chain: Putting additional DA layers such as L2 or Celestia requires additional trust assumptions.

5. Summary

That’s all we need to understand about Rollup.

Beyond that, Rollup has created countless new topics: L3, modular blockchains, data availability solutions, UX improvements from account abstraction, new tech stacks, new programming languages, new developers, new The auditing agency of…

Everything about Rollup is so new, so shiny, yet so young…

How to better “use” the blockchain like Rollup is a question worth exploring.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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