ZK-Rollup

Zero-Knowledge rollup, also known as a ZK-rollup, are layer-two scaling solution used to improve throughput on Ethereum Mainnet by performing computation & storing data off-chain. ZK-rollups, a Layer-2 blockchain protocol, can execute thousands of transactions in a batch to post minimal overview data to Mainnet. The protocol can significantly reduce costs and the time it takes for transactions to be confirmed.

ZK-Rollups boost scalability via mass transfer processing rolled into one single transaction. While Plasma builds one transaction per transfer, ZK-Rollups loads hundreds of transfers into one transaction.

Background and need for ZK-Rollups:

Plasma is the name awarded to the construction scalability process that puts layer two blocks on top of the Ethereum blockchain as a side chain. The execution of Plasma allows hundreds of side-chain transactions to be processed offline with one single hash of the side-chain block added to the Ethereum blockchain. However, there are certain fundamental flaws which prevent further scalability. Besides, a lengthy challenge period asks users to stay online or lose reward. Thus, solutions that are more user-friendly and less resource intensive are being developed to improve layer 2 scalability. ZK-Rollups are one among many solutions in development to reach this goal.

Two main types of rollups:

Mainly, there are two types of rollups – Optimistic and Zero-Knowledge (ZK). The advantage of either is they reduce transaction costs drastically. The idea behind rollups is that rather than waiting and paying for each transaction to process alone on Ethereum, dozens and dozens of transactions are recorded on the layer two chains. These are then “rolled up” into a single transaction and fed back to the costlier, slower blockchain. This splits the cost of that one transaction across many users.
Both Optimistic as well as ZK-proof projects work pretty much in the same manner. ZK-rollups have several advantages over Optimistic rollups regarding speed and security.

Pros and Cons:

Pros:

Lower fees per user transfer
Faster compared to Optimistic Rollup and Plasma
Blocks computed in a parallel computing model encourage decentralization
Fewer data involved in each transaction improves the throughput & scalability of layer 2
ZK-rollups enable users to withdraw their funds with less delay.

Cons:

The hardship in computing “zero-knowledge proof” will need data optimization to get the highest throughput
The initial setup of ZK-Rollups encourages a centralized scheme
The security scheme adopts a level of unverifiable trust
Quantum computing presents a risk of hacking the blockchain.

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