As the world transitions toward a blockchain and cryptocurrency-powered future of gaming, the blockchain gaming project VOID has announced the launch of its holistic Play-to-Earn (P2E) game ecosystem with a phenomenal storyline. VOID is a multiplayer fighting game that ensures a great gaming experience for its players and offers a broad scope for game character […]
Web3 promises to break us free from the centralized mega-corporation dominance of the Web2 generation, opening up a plethora of decentralized, peer-to-peer use cases that leverage the potential of the internet of value. While Web3 adoption has so far centered around DeFi, NFTs, and more recently GameFi, social media and data storage are also ripe for decentralization as SocialFi sets up to potentially become the next big thing. Building a Decentralized Reddit and Data Portal for Web3 Applications myMessage is the world’s first-ever decentralized Reddit-like social media and data storage platform, supporting evolving Web3 applications including a thread-reply bulletin board, messaging dApp, developer tools, SDKs, and encrypted data portal. The myMessage data storage and messaging dApp solutions are initially being built on the Zilliqa blockchain, taking advantage of its speed, throughput, and low-fee decentralized network to meet requirements. Further interoperable multi-chain integration across Avalanche and Binance Smart Chain (BSC) will then follow. The decentralized messaging dApp as well as a Reddit-like thread-reply bulletin board will be built on Polygon’s scalable layer 2 blockchain technology, after being awarded a Polygon Development Grant. Overcoming the Problems of Centralized Social Media and Data Storage The centralization of mainstream data storage and social media is a significant pain point, leading to censorship, privacy abuses, and security breaches, with an economic imbalance that strongly favors the platforms. myMessage’s solution is to use decentralized social media, storing AES256 encrypted data and content permanently on a blockchain with quantum-attack-resistant security. Data stored on a blockchain is immutable, transparent, timestamped, and void of risks to hacking, tampering, or loss due to its decentralized nature. The tokenization of value on blockchain also provides a medium for incentives that return proprietary rights and profits to the users. Data Storage and Messaging dApp In contrast to centralized cloud storage solutions with hefty costs on annual contracts, myMessage only costs approximately $0.10 per message, depending on its size. This works via a smart contract on one of the myMessage supported networks and a front-end app that interacts with it. Users type a message or attach a file, encrypt it if necessary, and send it to the network, paying the corresponding fee in native MESA tokens. They can then view or retrieve their information at any time for free. As almost anything digital can be securely stored on a blockchain, myMessage opens up several use cases including encrypted messages for private information, verifiable legal documents, NFT artwork and other intellectual property, crypto, patents, or digital asset storage. Reddit-like Bulletin Board and Social Farming The Reddit-like thread-reply bulletin board will be a bridge for users to communicate, encrypt threads, and transfer data in a decentralized way, recovering the rights to, control over, and value of their data produced by socializing online. All users can connect their Web3 wallets to access the myMessage bulletin board. It is privacy-preserving in that all users can access data without risk of being exposed or traced. Users will also be able to enjoy farming rewards simply by socializing on the platform, and can pay in native MESA tokens to start private threads, post replies, comment, or like. They can also tip other users in MESA tokens when they see good replies and comments. MESA Token Utility Beyond its use as a payment medium for fees, tips, and social farming rewards, MESA is also used for governance, staking, and deflationary buy-backs, with a total capped supply of 5 trillion tokens. Holders of MESA can participate in DAO proposals and vote on the future direction of the platform. Stakers are offered staking rewards for providing liquidity and platform revenue will also partially be used for MESA buy-back and burns. What’s Next? The MESA public sale, token launch, and DEX listing is expected to take place by the end of the year, alongside staking services, a top-tier CEX listing, and Avalanche integration. The 2022 roadmap is then set to deliver multi-chain integration with BSC and Polygon, a mobile app release, and developer tools in the run-up to full mainnet launch.
ChainSwap, a cross-chain asset bridge & application hub for smart chains, launched its cross-chain bridge aggregator today. The initial version of ChainSwap Cross-chain Bridge Aggregator integrates three leading bridge solutions, namely Poly Bridge, Multichain, and AnySwap. More bridges are expected to be supported by the aggregator. ChainSwap’s final goal is to integrate all cross-chain bridges available on the market and become the go-to platform for cross-chain solution seekers. Why a Bridge Aggregator: Current Challenges Imagine that you want to transfer a token from ETH to BSC with a decentralized cross-chain bridge. Currently, there are a few challenges. First, you need to research which bridge supports the token on both chains. Second, you need to choose which bridge provides the best deal with the lowest slippage and transaction fee, on top of other information such as estimated bridge duration time. In order to do that, you have to spend time comparing all the currently offered bridge solutions. This is difficult and time-consuming as the currently offered bridge solutions do not have a common interface, this is where the Chainswap bridge aggregator comes in. Market Analysis According to Dune Analytics, the current combined TVL of Ethereum bridges is $26.65 billion as of Dec. 1, 2021, up by +100% from only 2 months ago. This data tracks the 17 leading Ethereum bridges and is demonstrating an ever-growing trend. Ethereum Bridges TVL There are a number of main cross-chain solutions currently available on the market, including Cambridge, Hop, Binance Bridge, Terra Bridge, Anyswap, Allbridge, Renbridge, Xpollinate, Polynetwork, etc. More cross-chain projects are expected to emerge in the future. Different projects adopt different approaches We have centralized ones V.S. decentralized ones; cryptographic algorithms V.S. trusted devices; multiple steps V.S. simple one-click. Each cross-chain solution has its pros and cons. But in terms of the overall structure, all of them are based on these five elements: source chain, source token, destination chain, destination token, and sender. When it comes to EVM-based cross-chain solutions, we also have a Source Mapping contract and a Destination Mapping contract. ChainSwap’s Cross-Chain Aggregator Solution ChainSwap’s ultimate goal is to create an aggregator platform that integrates all cross-chain solutions and allows users to enjoy the margin of these projects combined through the unified interface that we provide, thus making the cross-chain experience more convenient and effective. This ultimate goal will be rolled out in steps and the first step has just been completed through the integration of Poly Bridge and Multichain. Support for other bridges such as AnySwap and Wormhole, is already under development and is expected to go live shortly. The entire aggregator solution is presented in the form of one interface. Users first select the Source token they wish to transfer cross-chain, then the source chain, destination chain and enter the amount they wish to transfer. The platform then presents the user with a list of all cross-chain projects that can provide this service. Once selected, the cross-chain transfer can be done with one click.
[PRESS RELEASE – Guwahati, India, 4th December 2021] When the world is fixated on Apes, whales and other NFTs, the most famous of all memes, the one that started a whole new revolution within cryptocurrencies, remains largely ignored. Doge Capital’s exclusive NFTs tackle this issue and at the same time, allow for its NFT holders […]
A bug in the token lending contract of the Solana Program Library (SPL) was recently found and fixed by Neodyme, a security auditing firm. The bug, that was discovered a couple of months back, could have affected several decentralized finance protocols holding more than $2 billion in total value locked (TVL). Their team identified the […]
Starting today, Voyager Token (VGX) is available on Coinbase.com and in the Coinbase Android and iOS apps. Coinbase customers can now trade, send, receive, or store VGX in most Coinbase-supported regions, with certain exceptions indicated in each asset page here. Trading for these assets is also supported on Coinbase Pro.
Voyager Token (VGX) is an Ethereum token that’s used to reward and incentivize use of the Voyager centralized exchange. On Voyager, VGX holders can earn staking rewards, receive cashback on trades, and more.
One of the most common requests we hear from customers is to be able to buy and sell more cryptocurrencies on Coinbase. We announced a process for listing assets, designed in part to accelerate the addition of more cryptocurrencies. We are also investing in new tools to help people understand and explore cryptocurrencies. We launched informational asset pages (see VGX), as well as a new section of the Coinbase website to answer common questions about crypto.
Customers can sign up for a Coinbase account here to buy, sell, convert, send, receive, or store e Coinbase Android and iOS apps. Coinbase customers can now trade, send, receive, or store VGX today.
Please note: Coinbase Ventures may be an investor in the crypto projects mentioned here, and additionally, Coinbase may hold such tokens on its balance sheet for operational purposes. A list of Coinbase Ventures investments is available at https://ventures.coinbase.com/. Coinbase intends to maintain its investment in these entities for the foreseeable future and maintains internal policies that address the timing of permissible disposition of any related digital assets, if applicable. All assets, regardless of whether Coinbase Ventures holds an investor or Coinbase holds for operational purposes, are subject to the same strict review guidelines and review process.
This website contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of Coinbase, Inc., and its affiliates (“Coinbase”), and Coinbase is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. Coinbase is not responsible for webcasting or any other form of transmission received from any Third-Party Site. Coinbase is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by Coinbase of the site or any association with its operators.
Crypto is a new type of asset. Besides potential day to day or hour to hour volatility, each crypto asset has unique features. Make sure you research and understand individual assets before you transact.
Is Hedera Hashgraph (HBAR) Coin a Good Investment?
Many cryptocurrencies have geared up and surged in price at the start of the year 2021. The performance of the Hedera Hashgraph astounded the crypto community. Today, that cryptocurrency has grown by over 600% in the last year, a level that investors highly prefer.
HBAR is a coin that is used in the Hedera decentralized economy. It is well-known for being a business-grade public network. Its primary goal is to create ‘your digital environment precisely the way it should be — yours.’
What Is Hedera Hashgraph (HBAR) Coin?
Hedera Team is the most widely used, long-lasting, enterprise-grade public network for the decentralized economy, allowing people and corporations to build powerful decentralized apps (dApps).
It is intended to be a more equitable and efficient system that overcomes some of the drawbacks of prior blockchain-based systems, such as sluggish performance and instability.
In August 2018, it raised funds through an initial coin offering (ICO), and in September 2019, it opened broad access to its main net for the first time. Investors could buy the platform’s native utility token (HBAR) at the lowest feasible price during the ICO.
Within the Hedera public network, the HBAR token has a dual purpose.
HBAR is the fuel that runs Hedera services like smart contracts, file storage, and regular transactions. Second, it’s utilized to help safeguard the network since HBAR users may stake their tokens to help keep the platform safe.
Characteristics of Hedera Hashgraph (HBAR)
Hedera Hashgraph is not constructed on top of a traditional blockchain, unlike most other cryptocurrency systems. Instead, it introduces a Hashgraph, which is an entirely new sort of distributed ledger technology.
Many blockchain-based alternatives, such as speed, affordability, and scalability, are outperformed by this technology. Hedera transactions have a transaction cost of just $0.0001 on average, and they are usually completed in less than five seconds. Hedera Hashgraph promises to be able to process more than 10,000 transactions per second (TPS), compared to 5–20 for most prominent proof-of-work (PoW)-based blockchains.
Several critical network services are available on the platform. Among them are:
Users may configure and mint fungible and non-fungible tokens (NFTs) on Hedera with only a few lines of code using this token service.
Any application or network that requires a safe, verifiable record of events can use this consensus service as a layer of trust.
Developers may use smart contract technologies to create powerful and efficient decentralized apps.
Proof-of-deletion, restricted mutability, and time-based file expiration are all elements of decentralized file storage systems.
What Is The Best Time To Invest In Hedera Hashgraph (HBAR) Coin?
For quite a long time, traders, individuals, and institutional investors have drawn their attention to the cryptocurrency market. Cryptocurrencies have seen a particularly significant price fluctuation, displaying enormous intermediate to long-term profits. The internet is brimming with information on the benefits of blockchain technology.
Indeed, blockchain has enormous potential, with several benefits, particularly data security and transmission speed. However, blockchain has limits when it comes to addressing accessibility difficulties.
Hedera Hashgraph (HBAR) is fantastic long-term investment potential. It is one of the few cryptocurrencies that can make money even in the face of a bear market or severe economic conditions.
Hedera is a solid investment since its technology outperforms all others. Due to its minimal bandwidth usage, Hedera Hashgraph touts itself as a speedier, more secure, and environmentally friendly alternative to blockchain. Hedera and the Central Bank are said to be working on a digital dollar.
HBAR may not have earned the best cryptocurrency prize based on technical analysis, which shows modest but constant growth in HBAR trade price. Experienced traders, on the other hand, have learned to wait and watch for this asset to perform before investing, taking into account all elements, doing analyses, and anticipating miracles on the Hedera Hashgraph trend exchange.
With a live market cap of $6,110,646,620, the current CoinMarketCap ranking is #37. There are 18,092,792,421 HBAR coins in circulation, with a maximum supply of 50,000,000,000 HBAR coins.
Start Investing in Hedera Hashgraph HBAR Coin
To begin trading and investing in HBAR and other cryptocurrencies, you must first establish a cryptocurrency account with a trustworthy exchange. In India, a cryptocurrency exchange is a broker that lets you trade Hedera Hashgraph (HBAR) and other cryptocurrencies. Assume you want to buy in Hedera Hashgraph (HBAR), and you want to get the best price as soon as possible.
Is Hedera Hashgraph (HBAR) A Good Investment in 2021?
Hedera Hashgraph appears to have a broad goal, a well-planned blueprint, and a shared commitment to long-term execution. Hedera was meticulously designed to be the world’s first widely used public distributed ledger, with performance, security, governance, stability, and regulatory compliance as its primary goals.
The reason why Fortune 500 corporations such as Google, Boeing, and IBM are represented on the board of directors. It has the potential to both mainstream cryptocurrencies and preserve the earth.
This sum of money may appear to be excessive. It’s still a modest project, with a market worth of about $1.5 billion, despite its technical promise. However, the crypto parody coin Dogecoin (DOGE) has a market value of $25.8 billion. In comparison, the parody coin of that parody coin Shiba Inu (SHIB), has a market cap of $2.8 billion in the crypto world.
As a result, Hedera Hashgraph has many opportunities to develop, primarily if it assists with large programs like COVID-19 vaccine delivery.
Why Invest in Hedera Hashgraph (HBAR) Coin?
The HBAR cryptocurrency powers the Hedera Hashgraph network. Therefore users must purchase it to conduct transactions and run apps.
Investors should be aware that the quantity of HBAR tokens is limited to 50 billion, with the whole amount issued when the network started in 2018.
Some HBAR tokens will be allocated using a technique known as “proxy staking,” in which any HBAR holder can lock their money in specific contracts that will allocate those assets to one of the network’s approved nodes.
Users can earn a share of the rewards and fees these machines receive from processing transactions on Hedera Hashgraph by staking HBAR with another node. Finally, the HBAR coin is used to pay the network’s transaction fees.
Worth Buying Hedera Hashgraph in India?
With a 24-hour trading volume of $90,326,017, the current Hedera price in India is $0.335234. In the previous 24 hours, Hedera has gained 7.50%. With a live market cap of $6,065,317,086 USD, CoinMarketCap now ranks #38. There are 18,092,792,421 HBAR coins in circulation, with a maximum supply of 50,000,000,000 HBAR coins.
HBAR Market Sentiments
Based on our Hedera Hashgraph forecast, a long-term increase is expected; the price prognosis for 2026 is $1.854. With a 5-year investment, the revenue is expected to be around +907.61%.
The HBAR price has been showing a rising tendency over the last few months. According to our forecast, we predict that the future price of Hedera Hashgraph might be around $0.717912 after a year.
Hedera Hashgraph is the internet’s trust layer, a public network that allows individuals and businesses to create decentralized applications (DApps). The platform was funded through an initial coin offering (ICO) in August 2018. (ICO). Hedera announced open access to its main net a little over a year later, in September 2019. During the ICO, investors will acquire HBAR, the platform’s native utility token, for the lowest feasible price.
As of late 2021, Ethereum has grown to support thousands of applications from decentralized finance, NFTs, gaming and more. The entire network settles trillions of dollars in transactions annually, with over $170 billion locked on the platform.
But as the saying goes, more money, more problems. Ethereum’s decentralized design ends up limiting the amount of transactions it can process to just 15 per second. Since Ethereum’s popularity far exceeds 15 transactions per second, the result is long waits and fees as high as $200 per transaction. Ultimately, thisprices out many users and limits the types of applications Ethereum can handle today.
If smart-contract based blockchains are to ever grow to support finance and Web 3 applications for billions of users, scaling solutions are needed. Thankfully, the cavalry is beginning to arrive, with many proposed solutions coming online recently.
In this edition of Around The Block, we explore the crypto world’s collective quest to scale.*
To compete or to complement?
The goal is to increase the number of transactions that openly accessible smart contract platforms can handle, while retaining sufficient decentralization. Remember, it would be trivial to scale smart contract platforms through a centralized solution managed by a single entity (Visa can handle 45,000 transactions per second), but then we’d be right back to where we started: a world owned by a handful of powerful centralized actors.
The approaches being taken to fix this problem come twofold: (1) build brand new networks competitive to Ethereum that can handle more activity, or (2) build complementary networks that can handle Ethereum’s excess capacity.
Broadly, they break out across a few categories:
Layer 1 blockchains (competitive to Ethereum)
Sidechains (somewhat complementary to Ethereum)
Layer 2 networks (complementary to Ethereum)
While each differs in architecture and approach, the goal is the same: let users actually use the networks (eg, interact with DeFi, NFTs, etc) without paying exorbitant fees or experiencing long wait times.
Ethereum is considered a layer 1 blockchain — an independent network that secures user funds and executes transactions all in one place. Want to swap 100 USDC for DAI using a DeFi application like Uniswap? Ethereum is where it all happens.
Competing layer 1s do everything Ethereum does, but in a brand new network, soup to nuts. They’re differentiated by new system designs that enable higher throughput, leading to lower transaction fees, but usually at the cost of increased centralization.
New layer 1s have come online in droves over the last 10 months, with the aggregate value on these networks rocketing from $0 to ~$75B over the same time period. This field is currently led by Solana, Avalanche, Terra, and Binance Smart Chain, each with growing ecosystems that have reached over $10 billion in value.
All layer 1s are in competition to attract both developers and users. Doing so without any of Ethereum’s tooling and infrastructure that make it easy to build and use applications, is difficult. To bridge this gap, many layer 1s employ a tactic called EVM compatibility.
EVM stands for the Ethereum Virtual Machine, and it’s essentially the brain that performs computation to make transactions happen. By making their networks compatible with the EVM, Ethereum developers can easily deploy their existing Ethereum applications to a new layer 1 by essentially copying and pasting their code. Users can also easily access EVM compatible layer 1s with their existing wallets, making it simple for them to migrate.
Take Binance Smart Chain (BSC) as an example. By launching an EVM compatible network and tweaking the consensus design to enable higher throughput and cheaper transactions, BSC saw usage explode last summer across dozens of DeFi applications all resembling popular Ethereum apps like Uniswap and Curve. Avalanche, Fantom, Tron, and Celo have also taken the same approach.
Conversely, Terra and Solana do not currently support EVM compatibility.
In a slightly different layer 1 bucket are blockchain ecosystems like Cosmos and Polkadot. Rather than build new stand-alone blockchains, these projects built standards that let developers create application specific blockchains capable of talking to each other. This can allow, for example, tokens from a gaming blockchain to be used within applications built on a separate blockchain for social networking.
There is currently over $100B+ sitting on chains built using Cosmos’ standard that can eventually interoperate. Meanwhile, Polkadot recently reached a milestone that will similarly unite its ecosystem of blockchains.
In short, there’s now a diverse landscape of direct Ethereum competitors, with more on the way.
The distinction between sidechains and new layer 1s is admittedly a fuzzy one. Sidechains are very similar to EVM-compatible layer 1s, except that they’ve been purpose built to handle Ethereum’s excess capacity, rather than compete with Ethereum as a whole. These ecosystems are closely aligned with the Ethereum community and host Ethereum apps in a complementary fashion.
Axie Infinity’s Ronin sidechain is a prime example. Axie Infinity is an NFT game originally built on Ethereum. Since Ethereum fees made playing the game prohibitively expensive, the Ronin sidechain was built to allow users to move their NFTs and tokens from Ethereum to a low fee environment. This made the game affordable to more users, and preceded an explosion in the game’s popularity.
As of this writing, users have moved over $7.5B from Ethereum to Ronin to play Axie Infinity.
Where sidechains like Ronin are application specific, others are suited for more general purpose applications. Right now, Polygon’s proof-of-stake (POS) sidechain is the industry leader with nearly $5B in value deployed over 100 DeFi and gaming applications including familiar names like Aave and Sushiswap, as well as a Uniswap clone called Quickswap.
Again, Polygon POS really doesn’t look that different from an EVM compatible layer-1. However, it’s been built as part of a framework to scale Ethereum rather than compete with it. The Polygon team sees a future where Ethereum remains the dominant blockchain for high value transactions and value storage, while everyday transactions move to Polygon’s lower-cost blockchains. (Polygon POS also maintains a special relationship with Ethereum through a process known as checkpointing).
With transaction fees of less than a penny, Polygon’s vision of the future looks plausible. And with the help of incentive programs, users have flocked to Polygon POS with daily transactions surpassing Ethereum (though spam transactions inflate this number).
Layer 2s (Rollups)
Layer 1s and sidechains both have a distinct challenge: securing their blockchains. To do so, they must pay a new cohort of miners or proof of stake validators to verify and secure transactions, usually in the form of inflation from a base token (e.g. Polygon’s $MATIC, Avalanche’s $AVAX).
However, this brings notable downsides:
Having a base token naturally makes your ecosystem more competitive rather than complementary to Ethereum
Validating and securing transactions is a complex and challenging task that your network is responsible for indefinitely
Wouldn’t it be nice if we could create scalable ecosystems that borrowed from Ethereum’s security? Enter layer 2 networks, and “rollups” in particular. In a nutshell, layer 2s are independent ecosystems that sit on top of Ethereum in such a way that relies on Ethereum for security.
Critically, this means that layer 2s do not need to have a native token — so not only are they more complementary to Ethereum, they are essentially part of Ethereum. The Ethereum roadmap even pays homage to this idea by signaling that Ethereum 2.0 will be “rollup centric.”
How rollups work
Layer 2s are commonly called rollups because they “rollup” or bundle transactions together and execute them in a new environment, before sending the updated transaction data back to Ethereum. Rather than have the Ethereum network process 1,000 Uniswap transactions individually (expensive!), the computation is offloaded on a layer 2 rollup before submitting the results back to Ethereum (cheap!).
However, when results are posted back to Ethereum, how does Ethereum know that the data is correct and valid? And how can Ethereum prevent anyone from posting incorrect information? These are critical questions that differentiate the two types of rollups: Optimistic rollups, and Zero Knowledge rollups (ZK rollups).
When submitting results back to Ethereum, optimistic rollups “optimistically” assume that they’re valid. In other words, they let the operators of the rollup post any data they want (including potentially incorrect / fraudulent data), and just assume it’s correct — an optimistic outlook no doubt! But there are ways to fight fraud. As a check and balance, there is a window of time after any withdrawal where anyone watching can call out fraud (remember blockchains are transparent, anyone can watch what’s happening). In the event that one of these watchers can mathematically prove that fraud occurred (by submitting a fraud proof), the rollup reverts any fraudulent transactions and penalizes the bad actor and rewards the watcher (a clever incentive system!).
The drawback is a brief delay when you move funds between the rollup and Ethereum, waiting to see if any watchers catch any fraud. In some cases this can be up to a week, but we expect these delays to come down over time.
The key point is that optimistic rollups are intrinsically tied to Ethereum and ready to help Ethereum scale today. Accordingly, we’ve seen strong nascent growth with many leading DeFi projects moving to the leading optimistic rollups — Arbitrum and Optimistic Ethereum.
Arbitrum & Optimistic Ethereum
Arbitrum (by Off-chain Labs) and Optimistic Ethereum (by Optimism) are the two main projects implementing optimistic rollups today. Notably, both are still in their early stages, with both companies maintaining levels of centralized control but with plans to decentralize over time.
It’s estimated that once mature, optimistic roll ups can offer anywhere from a 10–100x improvement in scalability. Even in their early days, DeFi applications on Arbitrum and Optimism have already accrued billions in network value.
Optimism is earlier in its adoption curve with over $300M in TVL deployed across 7 DeFi applications, most notably Uniswap, Synthetix, and 1inch.
Arbitrum is further along, with around $2.5B in TVL across 60+ applications including familiar DeFi protocols like Curve, Sushiswap, and Balancer.
Arbitrum has also been selected as Reddit’s scaling solution of choice for their long awaited efforts to tokenize community points for the social media platform’s 500 million monthly active users.
Where optimistic rollups assume the transactions are valid and leave room for others to prove fraud, ZK rollups do the work of actually proving to the Ethereum network that transactions are valid.
Along with the results of the bundled transactions, they submit what’s called a validity proof to an Ethereum smart contract. As the name suggests, validity proofs let the Ethereum network verify that the transactions are valid, making it impossible for the relayer to cheat the system. This eliminates the need for a fraud proof window, so moving funds between Ethereum and ZK-rollups is effectively instant.
While instant settlement and no withdrawal times sound great, ZK rollups are not without tradeoffs. First, generating validity proofs is computationally intensive, so you need high powered machines to make them work. Second, the complexity surrounding validity proofs makes it more difficult to support EVM compatibility, limiting the types of smart contracts that can be deployed to ZK-rollups. As such, optimistic rollups have been first to market and are more capable of addressing Ethereum’s scaling woes today, but ZK-rollups may become a better technical solution in the long run.
ZK Rollup Adoption
The ZK rollup landscape runs deep, with multiple teams and implementations in the works and in production. Some prominent players include Starkware, Matter Labs, Hermez, and Aztec. Today, ZK-rollups mainly support relatively simple applications such as payments or exchanges (owing to limitations on what types of applications ZK-rollups can support today). For example, derivatives exchange dYdX employs a ZK rollup solution from Starkware (StarkEx) to support nearly 5 million weekly transactions and $1B+ in TVL.
The real prize however, is ZK rollup solutions that are fully EVM compatible and thus capable of supporting popular general applications (like the full suite of DeFi apps) without the withdrawal delays of optimistic rollups. The main players in this realm are MatterLab’s zkSync 2.0, Starkware’s Starknet, Polygon Hermez’s zkEVM, and Polygon Miden, which are all currently working towards mainnet launch. (Aztec, meanwhile, is focused on applying zk proofs to privacy).
Many in the industry (Vitalik included) are looking at ZK rollups in conjunction with Ethereum 2.0 as the long term solution to scaling Ethereum, mainly stemming from their ability to fundamentally handle hundreds of thousands of transactions per second without compromising on security or decentralization.The upcoming rollouts of fully EVM compatible ZK rollups will be one of the key things to watch as the quest to scale Ethereum progresses.
A fragmenting world
In the long run, these scaling solutions are necessary if smart contract platforms are to scale to billions of users. In the near term, these solutions, however, may present significant challenges for users and crypto operators alike. Navigating from Ethereum to these networks requires using cross-chain bridges, which is complex for users and carries latent risk. For example, several cross-chain bridges have already been the target of $100+ million dollar exploits.
More importantly, the multi-chain world fragments composability and liquidity. Consider that Sushiswap is currently implemented on Ethereum, Binance Smart Chain, Avalanche, Polygon, and Arbitrum. Where Sushiswap’s liquidity was once concentrated on one network (Ethereum), it’s now spread across five different networks.
Ethereum applications have long benefited from composability — i.e. Sushiswap on Ethereum is plug-and-play with other Ethereum apps like Aave or Compound. As applications spread out to new networks, an application implemented on one layer 1/sidechain/layer 2 is no longer composable with apps implemented on another, limiting usability and creating challenges for users and developers.
An uncertain future
Will new layer 1s like Avalanche or Solana continue to grow to compete with Ethereum? Will blockchain ecosystems like Cosmos or Polkadot proliferate? Will sidechains continue to run in harmony with Ethereum, taking on its excess capacity? Or will rollups in conjunction with Ethereum 2.0 win out? No one can say for sure.
While the future is uncertain, everyone can take solace in the knowledge that there are so many smart teams dedicated to tackling the most challenging problems that open, permissionless networks face. Just as broadband ultimately helped the internet support a host of revolutionary applications like YouTube and Uber, we believe that we’ll eventually look at the winning scaling solutions in the same light.
* This post focuses on scaling smart-contract based blockchains. Bitcoin scaling is best saved for a future post.