Ethereum, the world’s second most widely used blockchain network, has a scaling problem. With the number of Dapps and users increasing daily, the chain is seeing high network congestion, long transaction wait times, and steep gas fees.
This predicament is not new: congestion incidents on the network go back as early as 2018. Its problems became more evident in 2021 during the live release of Time magazine’s “TIMEPieces” NFT collection, when users paid up to 30 times the price of the original NFT due to high gas fees.
As users grow increasingly impatient and projects continue to flock to challenger chains such as Solana and Avalanche, experts at Huobi Research Institute suggest that the wait for a remedy to this old, clogged network could soon be over. The answer? Building a layer 2 Rollup over the Ethereum main-net, enhanced by a virtual smart machine that improves its compatibility with different applications.
ZK Rollup’s Limitations Need to be Addressed
In a recent report titled, “Will zkEVM be Ethereum’s Savior?” by Huobi Research Institute, experts suggested that the solution to Ethereum’s congestion could be layer 2 solutions that function much like an overpass over the direct Ethereum ‘highway’, in order to enable scaling and allow for greater transaction volumes and shorter wait times. This mainstream layer 2 scaling technique is known as a “Rollup”, and its two classifications, Optimistic (OP) and Zero Knowledge (ZK), differ in a number of ways (see chart below).
|ZK Rollup||Optimistic Rollup|
|Data Stored On-chain (Data Availability)||Yes||Yes|
|Compatibility with Common Smart Contract||Hard||Easy|
|On-chain transaction costs（gas fee）||5% of the current Ethereum L1 Market||30% of the current Ethereum L1 Market|
|Exit Time||A few minutes||1 week|
ZK Rollup boasts much quicker transaction times and lower gas fees, and could provide a more efficient solution to congestion on the Ethereum chain. However, it is only compatible with payment and transaction applications, and cannot perform complex, automatic transactions (a.k.a. smart contracts). This limitation is partly due to its underdeveloped state, and is the reason for its comparatively low 3.6% share of the layer 2 Ethereum market. Luckily, zkEVM could change that.
Overcoming Compatibility Limitations with zkEVM
A special virtual machine, zkEVM, could allow the ZK Rollup to run smart contracts on layer 2, in order for verifications on the main-net to pass faster. This would improve ZK Rollup’s compatibility capabilities and exponentially increase its transaction volumes. Recent projects that have tested proof producing and EVM compatibility with the layer 1 network have been successful, and the Huobi Research Institute is optimistic that with development, zkEVM could empower ZK Rollup to become an influential player in the ethereum layer 2 market.
To download the full report, click here.