Bessie Liu

Ethereum layer-2 scaling solution Polygon is sharpening focus on zero-knowledge (ZK) technology.



Best known for its proof-of-stake sidechain, Polygon launched its zkEVM rollup on Ethereum mainnet in March, and a plan to <a href="https://blockworks.co/news/polygon-pos-to-validium">transition its PoS chain to a validium</a>.



ZK <a href="https://blockworks.co/news/zk-rollups-future-of-smart-contract-blockchains">proof-based rollups</a> post verifiable proofs of transactions to Ethereum, ensuring faithful execution while significantly reducing costs. And unlike other layer-2 solutions, they can theoretically do so while permitting a user to instantly withdraw funds back to Ethereum’s mainnet, in contrast to optimistic rollups, which require a waiting period.



Read more: <a href="https://blockworks.co/news/polygon-zkevm-live-on-ethereum">Polygon’s zkEVM goes live on Ethereum mainnet</a>



“We think ZK proofs are the future,” Jordi Baylina, co-founder and technology lead at Polygon told Blockworks. “The reason is fast finality and withdrawal times, compared to the week-long delay required by fraud proofs [when there are working fraud proofs].”



<a href="https://blockworks.co/news/avail-bridge-data-availability-ethereum-rollups">Validums</a> are similar, but they store transaction data off-chain, not on Ethereum mainnet, making the blockchain much more efficient.



There is, however, a downside to moving to a validum model. As only proofs are posted to Ethereum, and not the actual data itself, validums do not inherit Ethereum security.&nbsp;



For this reason, Polygon zkEVM Validum may be more suitable for applications like gaming and social media, rather than DeFi with its high financial stakes.



<h2 class="wp-block-heading">The release of Polygon CDK</h2>



Beyond moving its PoS blockchain to a zkEVM Validum, the Polygon team had also recently revealed the Polygon chain development kit (CDK), a software kit that is designed for developers to launch their own ZK layer-2s.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">I’m thrilled to announce our Chain Development Kit (CDK) – a software suite that empowers builders to launch their own fully-featured ZK-powered L2s. Polygon CDK is the evolution of Supernets. Now builders can easily customise and deploy their own appchains, with added features… <a href="https://t.co/bxphLzZCIc">pic.twitter.com/bxphLzZCIc</a>&mdash; Sandeep Nailwal | sandeep. polygon 💜 (@sandeepnailwal) <a href="https://twitter.com/sandeepnailwal/status/1696618823422529898?ref_src=twsrc%5Etfw">August 29, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The CDK follows similar moves by the Optimism Collective, Offchain Labs and Matter Labs, who have each revealed their own software stacks to grow the ecosystems of <a href="https://blockworks.co/tag/optimism">Optimism</a>, <a href="https://blockworks.co/tag/arbitrum">Arbitrum</a> and <a href="https://blockworks.co/tag/zksync">zkSync</a> respectively.



Polygon’s CDK is designed for developers who want to be part of a layer-2 ecosystem secured by zk-proofs, Baylina said.



“The architecture unlocked by Polygon CDK is different. It enables automatic access to shared liquidity through the ZK bridge and [interoperability] layer; that means a layer-2 ecosystem secured by working ZK-proofs,” Baylina said.



Polygon CDK enables developers to choose between launching a blockchain that uses the validium framework or launching an app-specific zkEVM blockchain. 



At the time of writing, Polygon’s native token <a href="https://blockworks.co/price/matic">MATIC</a> — <a href="https://blockworks.co/news/polygon-matic-becoming-pol">which will soon be rebranded to POL</a> — is currently trading at $0.56, up 2.1% over the past 24 hours.



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Polygon is focused on a future of zero-knowledge proofs

Risc Zero will open-source its “Type 0” zkEVM, Zeth, in a bid to make zero-knowledge infrastructure more accessible to developers.



Ethereum founder Vitalik Buterin previously wrote in a <a href="https://vitalik.ca/general/2022/08/04/zkevm.html">blog post</a> that there are four different types of zkEVMs, ranging from fully Ethereum equivalent to high-level language equivalents.&nbsp;



Brian Retford, CEO and co-founder of Risc Zero, told Blockworks in an interview that Zeth has been built using standard Rust crates, a programming language used by the popular Ethereum node software <a href="https://github.com/paradigmxyz/reth">Reth</a>.&nbsp;



“It’s not just the same semantics; it’s exactly the same code,” Retford said.



Zeth itself is a general-purpose programming language, which can be <a href="https://blockworks.co/tag/evm">EVM</a> equivalent — making it what Retford claims is a “Type 0” zkVM that can be applied to other networks.



“You can have a zkSolana [for example] without rewriting the code,” Retford said.&nbsp;



This makes Zeth a modular solution for developers wishing to build zk technology, Retford explains, providing a way for developers to innovate further in a zk context.



“People are really starting to modify the EVM itself, and if you think about how complex it is to audit, build and maintain zkEVM, it basically pushes zkEVM towards more status and stability, making it more difficult for people to innovate,” he said.



By contrast, with Zeth, developers can simply modify and customize their zk stack, Retford explains. This means it becomes easier for development teams to leverage zk technology without being the experts.&nbsp;



“You don’t need to have these very large, highly compensated teams doing a bunch of math in order to use zk technology,” he said.



Zeth also enables zk proving technology without depending on validators or sync committees as its zkVM is able to construct, verify, store and apply transactions independently in minutes.



“Zeth’s code is an EVM, and we compile it down to RISC-V and then run it on our zkVM, producing a complete zk proof of the EVM,” Retford said. “How do we do it in minutes? We farm the computation out in parallel.”



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Risc Zero introduces ‘Type 0’ zkEVM to make zero-knowledge tech more accessible

Linea, a zero-knowledge Ethereum Virtual Machine (zkEVM) rollup solution, has finalized its mainnet launch with the deployment of an ERC-20 token bridge.&nbsp;



The deployment of this ERC-20 token bridge enables third-party bridges to integrate with the network, meaning that it will be open to a new wave of decentralized finance (DeFi) apps.&nbsp;



Over the next two weeks, users of MetaMask’s Buy crypto aggregator won’t be required to pay network fees to on-ramp USDC.e. USDC.e is a wrapped version of <a href="https://blockworks.co/tag/circle">Circle’s</a> dollar-backed stablecoin that has been bridged from Ethereum mainnet to rollups like Linea and Arbitrum.&nbsp;



<h2 class="wp-block-heading">Ethereum’s galaxy of rollups</h2>



Linea is one of the many rollups <a href="https://blockworks.co/news/another-zk-rollup-on-ethereum">now deployed on Ethereum</a>.&nbsp;



Since its launch in July, the network claims to have seen more than <a href="https://linea.build/apps">150 dApps</a> deploy on the network, with over 100,000 weekly active users returning to the network.&nbsp;



According to information published by <a href="https://l2beat.com/scaling/projects/linea">L2 Beat,</a> the network has processed roughly $2.7 million in the past 30 days. At the time of writing, it has a total value locked (TVL) of $31 million, or roughly 0.3% of the total market share among all Ethereum layer-2s today.



The layer-2 network is similar to Ethereum’s design but supports faster transaction speeds and lower costs. Declan Fox, Linea’s product lead, told Blockworks that because Linea is a “<a href="https://vitalik.ca/general/2022/08/04/zkevm.html">type 2</a>” zkEVM, it’s compatible all existing applications on <a href="https://blockworks.co/tag/ethereum">Ethereum</a>.



“If you’re a Solidity developer, building on Linea is exactly like building on Ethereum,” Fox said.



<h2 class="wp-block-heading">What’s next for Linea</h2>



The Linea team is working on a unique prover technology, called Vortex, that follows a unique two-step system using an inner proof and an outer proof, Fox explains.



“The inner proof uses lattice-based cryptography to be generated extremely fast. Then we use self-recursion to compress that proof over and over again, iteratively, until it’s small enough, and then we wrap it in an outer proof and settle that on Ethereum,” Fox said. “What that means is that we can produce proofs very fast, and they’re very cheap.”



Linea is also looking at ways to leverage <a href="https://github.com/hyperledger/besu">besu</a> as its execution client as it looks to decentralize its network nodes.



“Besu is the execution client on Ethereum which has been around for many years, it’s very battled tested, and we [want to] use the same software without any modifications for Linea,” Fox said. “It’s not there yet, but it’s going to be integrated very soon because it allows us to have a lot of reliability.”



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Linea completes final stage of mainnet launch

Macauley Peterson

More developers may soon be able to play a role in advancing zero-knowledge technology.&nbsp;



Andreessen Horowitz’s crypto research team has published a paper that outlines two new zero-knowledge (zk) proof technologies.



Currently, the two most popular technologies used for zk rollups are zkVMs (zero-knowledge virtual machines) and SNARKs (Succinct Non-Interactive Argument of Knowledge).&nbsp;



SNARKs and zkVMs are both cryptographic constructs that allow participants to prove that their transactions are legitimate without revealing certain details of those transactions. They offer both scalability benefits (since less data needs to be stored and processed) and privacy benefits.&nbsp;



The first zk rollups to reach mainnet have already accumulated over $1 billion in total value locked, per <a href="https://l2beat.com/scaling/summary">L2beat</a>.



But existing SNARK technology can be significantly improved, Justin Thaler, a research partner at <a href="https://blockworks.co/tag/a16z">a16z</a>, told Blockworks.&nbsp;



“Current SNARK implementations are sufficiently complicated, they&#8217;re almost certainly full of bugs, which could make them useless security-wise,” Thaler said. “We’re talking 10s, 1000s of lines of code, very difficult to understand, and it’s very, very hard to imagine there is not a single bug in these code bases.”



The team at a16z crypto research — in conjunction with researchers from Microsoft, Carnegie Mellon and NYU —&nbsp;have developed a new approach to this problem: Lasso and Jolt.



<h2 class="wp-block-heading">Meet Lasso and Jolt</h2>



Lasso can be used in cryptography to shorten encrypted computational complexities, making them easier to apply practically.



“A key component for modern performative SNARK deployments is something called a lookup argument,” Thaler explained. “Lasso is a new lookup argument with a significantly faster prover.”&nbsp;



Engineers at a16z initially implementing Lasso conclude that it’s an order of magnitude improvement over existing lookup arguments, Thaler said.&nbsp;



“The prover is 10x faster — and that’s with our initial, not very optimized implementation,” he said.&nbsp;



Jolt is a framework used primarily to restructure, convert and change data. Thaler explained that Jolt uses the Lasso lookup argument as a building block to give what is a new approach to designing zkVMs.&nbsp;



“So what we’re doing is turning each step of the virtual machine into a Lasso,” Thaler said.



<h2 class="wp-block-heading">Simplifying zk tech for developers</h2>



This vision is not necessarily new and comes close to realizing what <a href="https://github.com/barryWhiteHat">Barry Whitehat</a> from the Ethereum Foundation calls “lookup singularity.”



“The vision is let&#8217;s do SNARK design by only doing lookups,” said Thaler. “We won’t have developers coding by hand very optimized circuits, which is very labor intensive and difficult to audit…we’re coming close to achieving a vision that a lookup can do all virtual machine execution with Lasso.”



Riad Wahby, an assistant professor at Carnegie Mellon University and co-author on the research paper, told Blockworks that it’s unlikely that current zk-rollup implementations will directly benefit from the research, but that the next generation might.&nbsp;



“For me that&#8217;s where the real excitement comes with something like Lasso is that it really enables like much more efficient general purpose, generally programmable proving systems,” Wahby told Blockworks. “Instead of having maybe 100 people in the world who can make significant progress on building the next roll-up, now it&#8217;s much wider open, and we&#8217;ll see much more innovation.”



<h2 class="wp-block-heading">Lowering barriers to use elliptic curve cryptography</h2>



SNARKs often use a combination of cryptographic primitives, including but not limited to elliptic curve cryptography (ECC) and hashing.



Hashing and ECC are designed for different cryptographic purposes, and while hashing is critical for data integrity checks, ECC is commonly used for encryption and digital signature purposes.&nbsp;



“There&#8217;s nothing fundamentally insecure about hashing-based SNARKS. But for hashing-based SNARKS, they give the protocol designer the flexibility to trade off performance for security,” Thaler said.



The benefit of the Lasso and Jolt technique, Thaler contended, is that it is designed to make elliptic curve cryptography more performative and efficient and removes the need to rely on hashing.



“People who really care about performance might no longer feel such a push to go to the hashing-based [SNARKS],” he said.



<h2 class="wp-block-heading">Is it VHS vs Betamax or VHS to DVD?&nbsp;</h2>



In the immediate term, the a16z crypto research team has published a draft version of the code on a16z’s GitHub page and hopes to receive external contributions.&nbsp;



“Taking Lasso and turning it into Jolt will be a significant effort. And we&#8217;re hoping not just to do it ourselves,” Thaler said.



In the long term, Thaler hopes the wider ecosystem will build on the code base and techniques introduced by its research paper.



Wahby thinks there is a year or two of engineering work ahead before the research can be turned into production-ready proof systems.



“It&#8217;s sort of a total ground up redesign,” Wahby said. But the potential benefits may be worth the wait. “We certainly have room for a VHS to DVD kind of jump,” he said.



Alex Pruden, CEO of Aleo, a privacy-focused zk-based blockchain, told Blockworks in an interview that there are several techniques from the Lasso paper that it plans to integrate.



“Lasso builds on a body of prior work, and the innovations described in the paper are exactly why an open-source ecosystem is such a powerful force for innovation.” Pruden said.



Updated Aug. 10, 2023 at 12:18 pm: Lasso is also not an acronym, as was stated in a previous version of this article. It also listed an incorrect title for Riad Wahby. He is an assistant professor at Carnegie Mellon University.



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Zero-knowledge proof systems have room for improvement, say cryptography researchers

Blockchain software development firm Consensys has gone down as the latest to join the zero-knowledge rollup game, unveiling Linea on Ethereum’s mainnet.



This move comes after Linea’s testnet phase on Goerli, which saw over <a href="https://explorer.goerli.linea.build/">5.5 million</a> wallet addresses execute over 46 million transactions.&nbsp;



Linea is a type 2 zero-knowledge Ethereum virtual machine, or a <a href="https://vitalik.ca/general/2022/08/04/zkevm.html" target="_blank" rel="noreferrer noopener">zk-EVM</a> — meaning it is an EVM equivalent, but not an <a href="https://blockworks.co/tag/ethereum" target="_blank" rel="noreferrer noopener">Ethereum</a> equivalent. The layer-2 network is designed to replicate user experience on mainnet, but at faster speeds and transaction costs by up to 15 times lower compared to Ethereum layer-1.&nbsp;



“By leveraging its industry-leading prover, Vortex, the result of over four years of R&amp;D, Linea can generate efficient ZK proofs and offer performances that unlock cheaper transactions for users and faster settlement finality with Ethereum,” Declan Fox, senior product manager at Consensys, told Blockworks.



Being fully EVM compatible also means that there are no switching costs for Ethereum, Fox said.&nbsp;



At launch, Linea will be integrated with existing Web3 products such as <a href="https://blockworks.co/tag/metamask" target="_blank" rel="noreferrer noopener">MetaMask</a> and Infura, meaning that, from the get-go, infrastructure ought to be familiar to developers.



Linea’s mainnet launch will also be introducing new features:



<ul>
<li>Batch conflation — designed to reduce costs by optimizing layer-2 transactions, so that it can fit better into a batch submitted to Ethereum layer-1</li>



<li>A new Canonical ERC-20 bridge — designed to enable any ERC-20 tokens to be created on Linea when bridged</li>



<li>Dynamic fee mechanism — used to manage Ethereum gas fees&nbsp;</li>
</ul>



A new outer proof system will also be introduced.



“The Linea prover, Vortex, offers fast proof generation by using lattice-based cryptography and self-recursion to compress a proof of computation, this ‘inner proof’ is then compressed in a final step, known as the ‘outer proof’&nbsp; to reduce its size and the costs to verify on Ethereum,” Fox said. “Linea uses PLONK as its outer proof as it requires a universal trusted setup — essentially, each time the circuit is updated, a new setup ceremony does not need to be conducted to dispose of the randomness.”



To prevent any implementation risks, Linea will be using a multi-prover approach, Fox said.&nbsp;



“The Multi-Prover uses multiple diverse implementations of a zkEVM to prove a transaction thus ensuring if one prover has a bug or becomes unavailable, as long as a quorum is reached amongst the other available proofs, the system will continue to operate reliably,” he said.



With the zero-knowledge rollup space drawing significant competition, Consensys notes it will unveil a major NFT collection on its network on July 18. All testers who participated in <a href="https://galxe.com/Linea/campaign/GCzWYUZXj4">Linea Voyage</a> will be eligible to mint the collection. Developers will also be able to participate in a hackathon with prizes of up to $50,000.



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Ethereum welcomes another zk rollup to mainnet

Shalini Nagarajan

Web3 gaming company Immutable has established itself as a major player in the blockchain space.&nbsp;



The Sydney startup places a strong emphasis on layer-2 solutions to improve scalability and affordability within the Ethereum NFT ecosystem — critical aspects to any smooth gaming experience.



After five years of operation, Immutable considers Web2 its primary competitor over any crypto peer.



In March, the firm <a href="https://blockworks.co/news/immutable-and-polygon-join-forces-to-attract-web3-game-developers" target="_blank" rel="noreferrer noopener">teamed up with Polygon</a> to streamline onboarding processes for game studios and developers keen on enabling crypto in their products.



Alex Connolly, co-founder of Immutable, explained the endeavor to create a gaming ecosystem centered around Ethereum and Polygon&#8217;s <a href="https://blockworks.co/tag/zkevm" target="_blank" rel="noreferrer noopener">zkEVM technology</a> that can stand up to Web2 gaming’s best. 



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Blockworks: How does zkEVM utilize zero-knowledge proofs to enhance transaction speeds and reduce gas fees?



Connolly: zkEVM is the holy grail of Ethereum scaling because it combines the EVM environment, which lets you run Ethereum smart contracts. So nine out of the top 10 chains are all EVM chains, which means that developers that write Solidity smart contracts, they’re used to the developer tools. There are thousands of people who already know how to program for those chains, as opposed to new chains like Aptos or Sui, where you need to learn a new language, or where the execution environment is really different.&nbsp;



So you get access to the same Ethereum environment. But if you use Ethereum itself, you&#8217;ll find that transactions are slow and costly, which is impactful for domains like gaming. Some chains take this approach and they do a very low-cost EVM chain where it looks like Ethereum, but you can do faster transactions. That comes at a big trade-off because the security and the decentralization of the chain is heavily reduced.&nbsp;



What zkEVM lets you do is have the same EVM execution environment with high speeds, with the security of Ethereum. The way you do that is through a rollup where you batch a number of transactions together, generate a proof that those transactions represent a valid state change, and then publish that proof to Ethereum layer-1.&nbsp;



A smart contract on Ethereum layer-1 verifies that proof. Let&#8217;s say you have ETH on layer-1, you move it into a zkEVM on layer-2, you can interact with layer-2 smart contracts, you can go participate on that chain, and then you can bridge that ETH back to layer-1 and you won&#8217;t have to worry about it being stolen by a malicious chain.



Blockworks: What is the distinction between Immutable X and Immutable zkEVM?



Connolly: Immutable X was our first application-specific rollup. That is basically a rollup that doesn&#8217;t support all the functionalities of the EVM, which is the smart contract execution environment. Immutable X only supports exactly the things that you need to do to build a game. So it supports trading, minting and transferring NFTs. And it supports all those things in a hyper-optimized way. It&#8217;s just an API interaction with immutable and it&#8217;s built on Stark technology.&nbsp;



Immutable zkEVM offers an environment to developers which is more flexible. You can have custom smart contracts, it’s more composable, you can interact with other people&#8217;s smart contracts. It has slightly less performance because it has to cover a wide variety of customer interactions. But at the moment, Immutable offers both to developers.



Blockworks: What are some lessons learned from the architecture of Starkware that may have influenced your approach?



Connolly: One thing that we definitely learned from Starkware is that many customers only need those basic functions, so they need minting, trading and transferring. Immutable X is perfect for them, because it means that you can build a game really simply and have access to amazing scaling.&nbsp;



What zkEVM gives you is compatibility with Ethereum which means that for a lot of games that are already on Ethereum, or Polygon or Avalanche, it&#8217;s much easier for those games to come and take advantage of the rest of the Immutable platform without having to leave the EVM behind.&nbsp;



Blockworks: Does the concept of superchains factor into Immutable’s framework and what role do they play in enhancing scalability?



Connolly: &#8220;Superchains&#8221; is not a very well-defined term as things stand. There are a lot of people talking about infrastructure for spinning up new additional app chains (application-specific blockchains). In our context, a particular game might want or need its own chain or rollup because it needs either some degree of customization, or it needs its own sort of horizontal scale, like it doesn’t want to compete for block space with any other game. 


<div class="wp-block-image">
<figure class="alignright size-large is-resized"><img decoding="async" loading="lazy" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/07/AlexConnolly.jpg?w=1024&amp;h=1024" alt="" class="wp-image-61303" width="180" height="180" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/07/AlexConnolly.jpg?w=1280 1280w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/AlexConnolly.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/AlexConnolly.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/AlexConnolly.jpg?w=150 150w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/AlexConnolly.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/AlexConnolly.jpg?w=257 257w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/AlexConnolly.jpg?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/AlexConnolly.jpg?w=219 219w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/AlexConnolly.jpg?w=80 80w" sizes="(max-width: 180px) 100vw, 180px" /><figcaption class="wp-element-caption">Alex Connolly, Immutable co-founder </figcaption></figure></div>


We believe there is a potential future for app chains and more customized blockchains. At the same time, most games at the moment don&#8217;t need their own chain, in terms of their scaling needs. And in terms of customization, they&#8217;re actually better off benefiting from the network effects of building on a shared chain. So when you build on Ethereum, there are lots of users that already have ether in their wallets. 



Most games in our view should start on a shared chain and eventually, when they actually have mainstream traction, that&#8217;s then the point where they go to their own app chain.&nbsp;



Blockworks: In what ways does Immutable plan to further expand and evolve its offerings to meet the needs and demands of the community?



Connolly: The opportunity for games to have their own chain is incredibly exciting. But to get it right, you need a few things. Firstly, you need the demand and you need people to want to use the block space on that chain. Secondly, you need a user experience that actually makes sense.&nbsp;



Imagine if you&#8217;re a gamer, and you have a Call of Duty chain, World of Warcraft chain, a FIFA chain and then you have a wallet on each of those chains. It sounds complex even just describing it, let alone for average people who are interfacing with it. We operate in a unique position in the industry, in that we both offer technology at the rollups layer with Immutable X and Immutable zkEVM. And also we offer up-the-stack products like Immutable Passport and Immutable Checkout, which help developers build games that make sense to Web2 players. 



We’re working with the Polygon team to offer additional app chains using Polygon supernets. We are in a position to make sure the user experience of interacting across those chains is smooth and makes sense to gamers.&nbsp;



Blockworks: Who do you consider key competitors offering similar solutions to the community?



Connolly: By far our biggest competitor is the Web2 gaming industry. We want everyone who builds Web3 games to be using Immutable products. But realistically, our competition is the exploitative ownership model of Web2 games where you rent items instead of owning them and you can&#8217;t sell the things that you spend your money on in games.&nbsp;



What we need to do to be successful there is to demonstrate that blockchain games have the capability to actually add value to players’ lives, not as a theoretical investment vehicle. But as, “Hey, when you buy something in a game, we believe that you should own it.”



Blockworks: Are you using artificial intelligence tools to improve your offerings?



Connolly: We have our own studios, which helped to produce some of the best content in the space for our platform with games like God&#8217;s Unchained, Guild of Guardians and Shardbound. In those games, we definitely use AI for things like art and game interactions.



On the platform side of things, I think we use AI in a more traditional way in terms of a SaaS technology company where we can optimize our products across the board. As Web3 gaming takes off and when we have millions of users using products like Immutable Passport, we’re hopeful that we&#8217;ll be able to use AI to deal with problems like transaction security. 



Keeping users safe in this environment requires us to build a lot of the same infrastructure as banks have when they&#8217;re detecting things like transaction fraud, and also recommendations for when users are making purchases for these assets. We think there are lots of ways that we can offer additional value at the wallet layer and the checkout layer by improving those experiences.&nbsp;



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We compete with Web2’s ‘exploitative ownership model’: Immutable co-founder

Sebastian Sinclair

It’s been a slow start to the year for crypto businesses seeking fresh capital.



Industry-related firms globally netted $2.42 billion in venture capital over 374 deals throughout Q1, 2023, marking a notable decline in value for the fourth straight quarter.



The year’s first quarterly period witnessed a 20% decrease from the previous quarter in total deal value, from $3 billion to $2.4 billion, <a href="https://my.pitchbook.com/search-results/s284388313/deal_chart" target="_blank" rel="noreferrer noopener">data from Pitchbook</a> shows. That translated into roughly 5% less in deal numbers over the same period, from 394 to 374.



Investments have continued to fall following their peak 12 months ago, thanks largely to waning interest in digital assets and a number of scandals that continued to damage crypto’s image.



As it stands, this year’s second quarter is on track to clock a fifth consecutive decline in both deal count and value, standing at 129 and $867 million, respectively. It’s worth noting that there remain roughly 49 days left in Q2, or roughly seven weeks, to break that streak.



Despite the overall decline, there were a few positive developments at the beginning of the year, Pitchbook said in its &#8220;Emerging Tech: Crypto Report,&#8221; published Thursday.



Layer-2 scaling solutions, which aim to improve the scalability of crypto like bitcoin and ether, continued to attract significant investment.



Native zkEVM Ethereum layer-2, Scroll, which processes transactions off-chain, clinched a $50 million deal on March 6 with a post-money valuation of $1.8 billion.



Bitcoin scaling platform Blockstream also managed to raise $125 million in a late-stage deal on Jan. 24, valuing the company at $2.49 billion, data shows.



That’s still a far cry from 2021 and 2022’s biggest deals, including Fireblocks&#8217; $550 million later-stage VC in January of last year and Blockchain.com’s $490 million deal, three months later.



“We believe late-stage valuations are being skewed upwards, as we suspect that only outsized, up-rounds are being disclosed and down-rounds are being kept private,” Pitchbook said in its report.



“Additionally, Q1 2023’s sample size is small and represents only a single quarter of data. We expect rising seed and late-stage valuations to reverse throughout the year.”



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Venture Investment Expected To ‘Reverse’ After 20% Quarterly Drop

Zero-knowledge rollup technology projects have been making headlines lately.



Polygon launched its zkEVM (zero-knowledge Ethereum virtual machine) technology on the Ethereum mainnet just three days after ZkSync Era <a href="https://blockworks.co/news/zksyncs-evm-era-opens-to-the-public">entered the public eye</a>. Other projects such as Scroll, a zk-rollup technology focused on scaling Ethereum and Starknet, are also gaining traction. 



All of these projects, despite their complicated terms, have the same goal — to scale the <a href="https://blockworks.co/tag/ethereum" target="_blank" rel="noreferrer noopener">Ethereum</a> blockchain.



Rollup technology is built on top of an existing blockchain. It is designed to batch or bundle transactions and execute them off chain, ultimately reducing the amount of block space required to make a transaction. This means cheaper gas fees as fixed costs are now shared between the batched user transactions.



Unlike optimistic rollup technology that assumes information in a transaction is accurate, developers have designed zk-rollups so that the technology itself can determine if the information is executed accurately without disclosing the information on the mainnet.



<h2 class="wp-block-heading">How are the rollups tracking?</h2>



Zk-rollup technology is still very much in its infancy, and iterations are still being made to the tech although it is now publicly available to users.



Arbitrum and Optimism still <a href="https://l2beat.com/scaling/tvl">hold</a> the majority of user funds, and their ecosystems boast the two most popular optimistic rollups. Arbitrum secures almost 67% of the market share and Optimism secures a little over 20%, information on <a href="https://l2beat.com/scaling/tvl">L2Beat</a> shows. 



Of the different zk-rollup technologies, zkSync has seen the most adoption, with an estimated <a href="https://l2beat.com/scaling/tvl">$244 million</a> bridged onto the layer-2. Of this, roughly $117 million has been deployed onto DeFi contracts on the layer-2, <a href="https://defillama.com/chains/Rollup">according</a> to information from DeFiLlama. 



By comparison, its competitors Starknet and Polygon’s zkEVm have seen roughly <a href="https://l2beat.com/scaling/tvl">$37 million</a> and almost <a href="https://l2beat.com/scaling/tvl">$5 million</a> bridged, respectively. 



ZkSync Era now has 22 protocols deployed on-chain, and Polygon’s zkEVM has 10 — its latest being the <a href="https://docs.uniswap.org/contracts/v3/reference/deployments">decentralized exchange Uniswap</a>.



Zk-rollup technology is still very new, and ongoing audits and iterations to ensure the safety and security of these layer-2s are still being made. <a href="https://www.blockworksresearch.com" target="_blank" rel="noreferrer noopener">Blockworks Research</a> recently published a research report offering <a href="https://www.blockworksresearch.com/research/zksync-a-peek-into-the-future-of-ethereum">a deep dive into the future of zk-rollup technology</a> and how it may impact Ethereum moving forward.



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Tracking Zero-Knowledge Rollups on Ethereum

Ethereum scaling with zero-knowledge (zk) proof technology has rapidly moved from theory to functioning public mainnet, with dueling zero-knowledge Ethereum Virtual Machines (zkEVMs) from <a href="https://blockworks.co/news/zksyncs-evm-era-opens-to-the-public">Matter Labs</a> and <a href="https://blockworks.co/news/polygon-zkevm-live-on-ethereum">Polygon</a> launching in the past week.



Soon to follow will be ConsenSys, the Ethereum blockchain infrastructure company, which recently <a href="https://twitter.com/ConsenSys/status/1640643146240409600?s=20">deployed</a> its zkEVM onto an Ethereum testnet.



Zk rollups are considered a breakthrough in crypto technology, as zero-knowledge proofs allow information to be proven to be valid or invalid without revealing the information itself.



On Ethereum layer-2 rollups, this means that transactions can be batched and validated by Ethereum without revealing the specifics involved in the individual transactions on the Ethereum mainnet.&nbsp;



This type of technology can considerably lower transaction costs by compressing the data, making more efficient use of Ethereum blockspace.



<h2 class="wp-block-heading">How do zk rollups lower transaction fees?</h2>



Zk rollups built on Ethereum offload the computation and execution of smart contracts to a separate layer-2 blockchain built on top of the base layer.



This means that, rather than having the Ethereum mainnet validators process individual transactions, the rollup instead offloads that responsibility to a prover and verifier on the layer-2 network.



“Anyone can download the data and check if it is correct for some period of time,”&nbsp;<a href="https://www.blockworksresearch.com/">Blockworks Research</a> said.



Unlike Ethereum mainnet, where more users and more transactions lead to increased <a href="https://www.blockworksresearch.com/glossary#gas">gas</a> fees, <a href="https://ethereum.org/en/developers/docs/scaling/zk-rollups/">the costs</a> of writing data to mainnet from a zk rollup in fact decline as the number of users increases since the otherwise fixed cost is divided between all users whose transactions are in a batch, DeFi researcher who goes by the ​​pseudonym Ignas <a href="https://twitter.com/DefiIgnas/status/1641426707172425730">tweeted</a>.



&#8220;When there are fewer transactions the fixed cost is distributed among fewer users, leading to higher average gas fees per transaction. As transaction volume increases, the fixed cost gets spread out, and fees drop,&#8221; Ignas said.



Mikhail Komarov, founder of zk infrastructure developer =nil; Foundation, agrees, but with a caveat.



&#8220;In terms of L-1 transactions, this is true. But a user pays an L-2 fee, not an L-1 fee,&#8221; Komarov told Blockworks. &#8220;This means a rollup can charge some larger or smaller end-user fee with the only difference of using its own L-2 token for that.&#8221;



Current zk rollups, however, do not charge fees in a native token — if they have one — but instead use ether.



What exactly gets posted back to Ethereum mainnet depends on the specifics of the rollup implementation.



For instance, Polygon’s zkEVMs posts full transactions to mainnet, Bartek Kiepuszewski of L2Beat explained <a href="https://twitter.com/bkiepuszewski/status/1640728189109411841">on Twitter</a>, Tuesday. By contrast, both zkSync and StarkNet only submit changes in the state of the EVM that occur as a result of those transactions.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">In contrast to other zkEVMs it posts full transactions (with signatures) to L1 calldata, not just state roots. <a href="https://twitter.com/zksync?ref_src=twsrc%5Etfw">@zksync</a> and <a href="https://twitter.com/Starknet?ref_src=twsrc%5Etfw">@Starknet</a> post only state diffs. Transactions are not compressed, expect L2 tx cost to be not the cheapest as a result /2&mdash; bartek.eth (@bkiepuszewski) <a href="https://twitter.com/bkiepuszewski/status/1640728189109411841?ref_src=twsrc%5Etfw">March 28, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



“Right now, we have to differentiate between systems that are EVM-equivalent and EVM-compatible,” Kiepuszewski <a href="https://youtu.be/eveHo7ncHt4?t=653">said</a> at Devcon Bogota, in October 2022. “I think we’re going to see a very interesting competition between systems that try to emulate the EVM as close as possible and systems that will prefer to make sure that the proving is optimized for the particular VM — and in this category I would definitely put zkSync and StarkNet. The competition between these two approaches is will be very interesting to watch.”



Similar to how transactions on layer-1 cost a gas fee, posting data from layer-2 validity proofs also requires a fee. Currently, transactions are posted through ordinary Ethereum “<a href="https://www.quicknode.com/guides/ethereum-development/transactions/ethereum-transaction-calldata/">calldata</a>” in a transaction. But this will change under <a href="https://blockworks.co/podcast/0xresearch/ac87740a-b80f-11ed-b2e2-4b2bbafab32b">EIP-4844</a>, Blockworks research said.&nbsp;



“It will be posted to these things called blobs that will have a separate fee market to normal transactions making it cheaper,” Blockworks Research said.



EIP-4844, also known as Proto-Danksharding, will the part of the next major Ethereum upgrade<a href="https://blockworks.co/news/ethereum-devs-opt-for-withdrawals-in-march-and-nothing-else"> after Shanghai</a>, dubbed Cancun.



&#8220;I would say the only thing which can drive down data availability cost is a better compression (proof and circuits &#8216;quality&#8217;),&#8221; Komarov said. &#8220;The better the compression — the smaller the L-1 [data availability] charge.&#8221;



Ultimately, technological and hardware improvements will reduce the costs of data availability further and, over the long run, transaction fees on Ethereum layer-2s using zk proofs will continue to come down, Blockworks Research said.



Updated March 30, 2023 at 12:02 pm ET: Additional comments.



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Zero-knowledge Rollups Get Cheaper With Scale

The options for layer-2 scaling are expanding as Polygon launches its long-awaited zkEVM technology on Ethereum mainnet today.



The zero-knowledge Ethereum Virtual Machine is a technology that can execute smart contract transactions in a way that can prove the information is executed correctly without revealing the information itself on Ethereum’s mainnet, thereby bundling more transactions in less mainnet blockspace.



Sandeep Nailwal, the co-founder and chief operating officer of Polygon, told Blockworks this type of technology is considered the “<a href="https://blockworks.co/news/polygon-unveils-zkevm-the-holy-grail-of-scaling">holy grail of scaling</a>.”



“With the power of mathematics…you can compute something off-chain on layer-2, then verify everything back on Ethereum in a very succinct way in a very short amount of time,” Nailwal said.&nbsp;



Polygon’s launch on Ethereum comes just days after Matter Labs zkSync Era opened to the public on <a href="https://blockworks.co/news/zksyncs-evm-era-opens-to-the-public">Ethereum mainnet</a>.



Similar to zkSync’s offering, the <a href="https://blockworks.co/tag/polygon">Polygon</a> zkEVM’s code is open-source, but under an AGPL v3 license.



“That means that not only current repositories, but all future modifications and distributions as well, will remain open source, ensuring the code cannot be used for proprietary purposes,” Nailwal said.



Nailwal notes that Polygon zkEVM is EVM equivalent, whereas zkSync’s offering is EVM compatible.



According to the <a href="https://vitalik.ca/general/2022/08/04/zkevm.html">framework</a> laid out by Ethereum co-founder Vitalik Buterin in August 2022, zkSync Era is classified as a “Type-4 (high-level-language equivalent),” and there are advantages and disadvantages of various approaches to bringing the EVM to a zero-knowledge rollup. The merits of various tradeoffs are an ongoing topic of debate.&nbsp;&nbsp;



Like zkSync Era, and the current crop of optimistic rollups, the Polygon zkEVM is not yet decentralized, but eventually, Nailwal hopes that Polygon’s new offering will take that step.



“Everything is in the hands of the community,” he said.&nbsp;



<h2 class="wp-block-heading">Security comes first</h2>



In addition to three internal audits, Nailwal notes that Polygon’s zkEVM has also gone through two rounds of external security audits from blockchain cybersecurity companies Hexens and Spearbit.



Ongoing, continuous audits are expected for the next three to four months following mainnet launch and a multi-million dollar bounty program will also be in place, he said.



The emphasis on security was also central to zkSync Era’s mainnet release, but Polygon said that Matter Labs had shared audits that cover their smart contracts and sequencer, not their prover.



“This raises serious questions about security, at least until a full audit is released. The prover for Polygon zkEVM, meanwhile, has been audited, and is open-source,” Brendan Farmer, Polygon Zero co-founder, told Blockworks.



A spokesperson for zkSync told Blockworks that the prover had been audited by Halborn Security, and pointed to the blockchain’s <a href="https://era.zksync.io/docs/dev/troubleshooting/audit-bug-bounty.html#audits">documentation</a>, which notes that a recently completed review has not yet been published.



Even conscientious security measures can leave gaps, however, and Nailwal notes that he does not wish users to bring millions of dollars to the zkEVM immediately.



&nbsp;“Zk is new technology…so we [want] people [to be] as cautious as possible,” he said.



Drawing on the example of the recent <a href="https://blockworks.co/news/euler-suffers-200m-exploit">Euler Finance attacks</a>, Nailwal cautioned that interacting with smart contracts is not without risk.&nbsp;



“Euler, after running for two years, a bug was found — this can happen any day, on any smart contract-based application.” he said.



ZkEVMs are sure to be compared to their <a href="https://blockworks.co/news/arbitrum-optimism-exceed-ethereum">optimistic rollup counterparts</a> — the most successful to-date being Optimism and Arbitrum.



“Arbitrum took one and a half years before people actually started bringing in money,” Nailwal said. “So we don’t expect people to bring a lot of money [initially].”



Updated March 28, 2023 at 2:58 pm ET: After initial publication, Polygon <a href="https://polygon.technology/blog/polygon-zkevm-is-now-fully-open-source" target="_blank" rel="noreferrer noopener">announced</a> the zkEVM prover would also be available under the AGPL v3 license, along with the rest of the codebase.



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Polygon’s zkEVM Goes Live on Ethereum Mainnet

Ethereum has a new scaling solution reaching public mainnet, going live Friday. ZkSync’s EVM-compatible zero-knowledge proof-based rollup is open to the public from 10:00 am ET.



The zkEVM, which <a href="https://blockworks.co/news/matter-labs-rebrands-zkevm">rebranded to zkSync Era</a> last month, has been open to developers-only <a href="https://blockworks.co/news/zksync-sharpens-role-ethereum-200m-funding">since October 2022</a>. But now the proverbial training wheels are coming off and the public will have their first chance to interact with dapps on the platform.



ZkSync Era was previously known as zkSync 2.0, and its 1.0 cousin, launched by developer Matter Labs in December 2020, remains live as zkSync Lite.



A rival zkEVM from Polygon was <a href="https://blockworks.co/news/polygon-zkevm-beta-live-on-ethereum">announced in mid-February</a> and its equivalent offering, which the team calls “Mainnet Beta,” is expected to go live on Monday, March 27.



So, the zkSync folks can lay claim to being “the world’s first zkEVM mainnet,” if only by a weekend.



Matter Labs’ co-founder and CEO Alex Gluchowski told Blockworks the timing is coincidental, and Era’s alpha launch milestone is arriving right on schedule, following the completion of a second public <a href="http://code4rena.com/contests/2023-03-zksync-era-system-contracts-contest">security contest</a> via Code4rena.



“Now we feel completely safe to launch,” Gluchowski said, stressing that the testing of the product has been extensive.



The developers spent $3.8 million on testing and auditing, according to a statement shared with Blockworks, including seven independent security audits — <a href="https://blog.openzeppelin.com/zksync-layer-1-audit/">one</a> with leading auditor OpenZeppelin — and an open-ended bug bounty program <a href="https://immunefi.com/bounty/zksyncera/">with Immunefi</a>.



“You really need this layered approach to security,” Gluchowski said, adding, “Now we feel comfortable, but I mean it’s still Alpha — people have to understand it’s still brand new technology.”



He pointed to the <a href="https://blockworks.co/news/euler-bounty-defi-flash-loan-attack">recent exploit of Euler Finance</a>, whose smart contracts were audited by a reputable firm and were live for the better part of a year, as an example of how audits alone aren’t enough.



The combination of external and internal audits, public security contests and bug bounties and a developer gated release, Gluchowki thinks should be industry standard practice.



The zkSync Era code is also fully <a href="https://github.com/matter-labs/zksync-era">open-source</a>, including the prover, which the team <a href="https://blockworks.co/news/zksync-sharpens-role-ethereum-200m-funding">sees as a competitive differentiator</a>.



“We open-sourced everything the moment we opened the network to developers — as we promised — under a permissive MIT Apache 2 License,” Gluchowski said, explaining the rationale is that they “believe it’s fundamental to crypto have the code open-source and forkable, because that’s tied to the ethos and values of Ethereum.”



Another key feature is native <a href="https://blockworks.co/news/what-are-smart-contract-wallets">account abstraction</a>, which will allow Era users to pay transaction fees in any token or even let dapp developers pay users’ fees.



<h2 class="wp-block-heading">Looking forward: Decentralization</h2>



There remain guardrails in place, such as a delay period for withdrawals, initially set to 24 hours, but which will be reduced gradually, Gluchowski said.



“In the initial phase, we will be still running the sequencer [and] we have the right to upgrade the contracts — it’s not yet fully decentralized,” he said.



The plan is to follow a similar approach to that of zkSync Lite, which has a <a href="https://blog.matter-labs.io/security-council-2-0-2337a555f17a" target="_blank" rel="noreferrer noopener">security council</a> that supervises protocol upgrades.



“We can’t guarantee that there are no problems, we encourage people to experiment slowly,” Gluchowski said.



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ZkSync’s zkEVM ‘Era’ Opens to the Public

Two powerhouse Ethereum scaling solutions have teamed up to build a gaming blockchain in a push to accelerate the adoption of Web3 gaming.



Immutable announced Monday that it would use Polygon’s zero-knowledge technology to create a new network called Immutable zkEVM, a roll-up designed to make the process of developing Web3-enabled games faster and easier.



It “will allow both large game studios and independent developers to build high-quality games that support true asset ownership,” Immutable said in a <a href="https://www.immutable.com/blog/immutable-and-polygon">statement</a>.



The network isn’t live yet and has to wait for the launch of Polygon’s zkEVM, which utilizes the power of zero knowledge proofs to reduce transaction costs and processing time while being fully Ethereum-compatible.&nbsp;



After launching <a href="https://blockworks.co/news/polygon-and-matter-labs-compete-on-zkevm-rollups">a public testnet in October</a>, the mainnnet is <a href="https://blockworks.co/news/polygon-zkevm-beta-live-on-ethereum">slated to go live</a> on <a href="https://twitter.com/MihailoBjelic/status/1625532387235971076">March 27</a>. Some of the biggest DeFi platforms, including Aave and Uniswap, will be among the first protocols to deploy on the zkEVM as they continue to scale their decentralized apps.



Polygon co-founder Sandeep Nailwal <a href="https://twitter.com/sandeepnailwal/status/1637934814136266752" target="_blank" rel="noreferrer noopener">said</a> all gaming studios building on Immutable will end up using Polygon (<a href="https://blockworks.co/price/matic">MATIC</a>) validators. These studios will launch their own app-specific chains, which will require staked MATIC, and gas fees, paid in Immutable’s token (<a href="https://blockworks.co/price/imx">IMX</a>), from all such chains will go to MATIC stakers, he added.



<h2 class="wp-block-heading">Consequences for Gaming</h2>



Immutable and Polygon’s strategic alliance will build “an Ethereum-centric gaming ecosystem that is poised to take Web3 mainstream and bring digital ownership to millions of people around the world,” said Robbie Ferguson, co-founder at Immutable.



Gaming is one of the fastest-growing subsections of the blockchain industry, with brands like Ubisoft, Nintendo, Electronic Arts and <a href="https://blockworks.co/news/epic-games-fortnite-store-crypto-blockchain">Epic Games</a> diving into decentralized gaming. Both projects combined reported nearly <a href="https://twitter.com/Immutable/status/1637877713120948224">$2 billion</a> invested in Web3 games in 2022.



“Billions of dollars of skins are sold each year with no rights for players — we’re changing that, so players are in control, and ownership is the expectation.” The Immutable zkEVM will be an additional option for game developers. It does not replace the platform’s Starkware-based solution, Immutable X.



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Immutable and Polygon Join Forces To Attract Web3 Game Developers

As the race to deploy zero-knowledge (zk) technology <a href="https://blockworks.co/news/polygon-and-matter-labs-compete-on-zkevm-rollups">intensifies</a>, Polygon reveals that it will launch its zero-knowledge Ethereum Virtual Machine (zkEVM) Mainnet Beta on March 27.



Hailed by Vitalik Buterin as the <a href="https://vitalik.ca/general/2021/01/05/rollup.html">future</a> of Ethereum scaling, the layer-2 scaling solution <a href="https://blockworks.co/news/polygon-unveils-zkevm-the-holy-grail-of-scaling">first revealed</a> its zkEVM in July last year — promising faster transaction speeds than optimistic rollups.



“We are delighted to share the launch date for the Polygon zkEVM Mainnet Beta which is coming in the first quarter of 2023 as promised,” Sandeep Nailwal, co-founder of Polygon Technology told Blockworks.&nbsp;



Polygon’s zkEVM mainnet will be the first “fully EVM equivalent” zk rollup to reach Ethereum mainnet, Nailwal said.&nbsp;



“This represents a huge step towards scaling Ethereum and bringing Web3 to the masses,” he said.



Zk rollup technology moves transaction verification off-chain and then batches them so they can be settled on Ethereum. The process uses a “prover” that determines if a dataset is true or false — all while maintaining user privacy.



<a href="https://www.blockworksresearch.com/">Blockworks research</a> analyst <a href="https://www.blockworksresearch.com/research?author=sam">Sam Martin</a> noted that “zkEVM race is well underway, with stiff competition amongst zkSync, Polygon, Scroll, Taiko, and others.”



“All teams are taking different approaches, but Polygon’s zkEVM has been classified as a Type-3 by Vitalik Buterin given its near EVM equivalence and choice to forgo the use of precompiles,” he said.&nbsp;



<a href="https://vitalik.ca/general/2022/08/04/zkevm.html">Type-3</a> zkEVMs are “almost EVM-equivalent” — but require a few sacrifices before it meets the golden standard of Type-1, the fully Ethereum equivalent EVM.&nbsp;



“It is possible that the first zkEVM to launch on mainnet without any limitations could garner significant traction with a first-mover advantage, so keeping a close eye on developments in this space throughout 2023 will be important.”



Over the next couple of weeks, Polygon Labs, the team behind Polygon — will be revealing more details about the Mainnet Beta.&nbsp;



“Security is the highest priority, which is why Polygon zkEVM has been run through a gauntlet of tests and audits,” the company said in a statement. “Users and devs can expect full transparency about the security measures that will protect the Ethereum community during Mainnet Beta.”



At the time of writing, Polygon’s <a href="https://blockworks.co/price/matic">MATIC</a> token is trading at $1.23, up by over 4% over the past 24 hours.



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Polygon’s zkEVM Beta Is Going Live on Ethereum Mainnet Next Month

<div id="highlights-block_63448cb8d5295" class="highlights">
 <ul>
 <li>EVM compatibility or equivalence allows dapp developers to port their applications from other Ethereum-based chains</li>
 <li>Multiple zk-rollup implementations of the EVM will go live in the next 6 months</li>
 </ul>
 
</div>



The race to get a working Ethereum virtual machine (EVM) on a zero-knowledge proof-based rollup (zk-rollup) is heating up, as Polygon announced its EVM-equivalent effort is live on a public testnet, today.



Rival zkSync has had its EVM testnet up <a href="https://blog.matter-labs.io/zksync-2-0-public-testnet-is-live-de870ba9632a" target="_blank" rel="noreferrer noopener">since February</a> and expects to roll out its mainnet by the end of October.



Once thought to take three to five years of development work, the announcement at the Polygon Connect event in Bogota, Colombia — on the sidelines of DevCon, the largest Ethereum developer conference — confirms that zkEVMs are right around the corner, according to Polygon co-founder Mihailo Bjelic.



“Thanks to several breakthroughs that we had internally in our zkEVM team, we were able to improve the efficiency by several orders of magnitude, and we managed to deliver in a little bit less than one year,” Bjelic told Blockworks in an interview.



The advent of zkEVMs is seen as the likely <a href="https://vitalik.ca/general/2021/12/06/endgame.html" target="_blank" rel="noreferrer noopener">endgame</a> for Ethereum scaling. But Ethereum co-founder Vitalik Buterin cautioned in December 2021: “It will take years of refinement and audits for people to be fully comfortable storing their assets in a ZK-rollup running a full EVM.”



Zero-knowledge rollups move the execution of transactions off-chain for verification and then batch those transactions to be settled on Ethereum.



The technology has the potential to achieve several major blockchain design goals: near-infinite scalability, high security guarantees and a familiar experience for Ethereum developers to build.



“So you can take, let’s say, 1 million transactions, generate one single proof for them, and that proof takes a fraction of a second to verify, and you prove that these 1 million transactions were correct,” Bjelic said. “So that&#8217;s, like, super cool, and allows us to scale.”



Unlike optimistic rollups, zk-rollups don&#8217;t require long withdrawal periods associated with <a href="https://medium.com/@cpbuckland88/fraud-proofs-and-virtual-machines-2826a3412099" target="_blank" rel="noreferrer noopener">fraud proofs</a>, which can lead to greater capital efficiency.&nbsp;



Polygon claims to be the first general purpose, EVM-equivalent and fully open-source zk-rollup. Major DeFi platforms such as Aave and Uniswap, as well as the social platform Lens currently on Polygon’s PoS chain, are set to be among the protocols to kick the tires on the zkEVM testnet.



But what will they find when they do?



<h3 class="wp-block-heading">Equivalence versus compatibility</h3>



Polygon zkEVM is “Ethereum-equivalent,” the Polygon team said, which means that all existing smart contracts, developer tools and wallets already built for Ethereum will work seamlessly.



But according to Steve Newcomb, chief product officer at zkSync, a look at the project&#8217;s <a href="https://github.com/0xpolygonhermez/" target="_blank" rel="noreferrer noopener">Github code repository</a> implies otherwise. As of Monday, the repository showed 97% coverage of Ethereum compatibility tests.



“I read Polygon’s source code every other weekend…It just is not possible that they have [the prover] working for general purpose [use],” Newcomb told Blockworks in an interview.&nbsp;



By contrast, zkSync’s EVM — dubbed zkSync 2.0 — is referred to as “Ethereum-compatible,” Newcomb said, because just three opcodes (short for operation code) are deliberately omitted to gain performance.&nbsp;



Both <a href="https://polygon.technology/solutions/polygon-zkevm/" target="_blank" rel="noreferrer noopener">Polygon</a> and <a href="https://docs.zksync.io/zkevm/" target="_blank" rel="noreferrer noopener">zkSync</a> have a developer-friendly edge over non EMV-compatible zk-rollup tech from Starkware and Loopring, in that existing code written in solidity for Ethereum doesn’t need to be re-written in another programming language for use on the rollup.



The Polygon team calls Newcomb&#8217;s claim &#8220;deliberately misleading,&#8221; defining “Ethereum-compatible” not in relation to opcodes, but rather as the ability to run EVM bytecode natively without requiring developers to put code through any compiler.



“We think it’s a non-issue,” Newcomb said on the <a href="https://shows.banklesshq.com/p/the-zkevm-is-here-zksyncs-steve-newcomb" target="_blank" rel="noreferrer noopener">Bankless podcast</a> last month. “It’s very easy to port to us,” he added, noting that dapp developers won’t find anything lacking with zkSync’s implementation. 



And, evidently they won’t be the only games in town. Aside from <a href="https://scroll.io/" target="_blank" rel="noreferrer noopener">Scroll</a>, a previously announced EVM-equivalent zk-rollup project, new entrants can be expected, such as <a href="https://taiko.xyz/" target="_blank" rel="noreferrer noopener">Taiko</a>, whose team includes Loopring and GameStop alumnus Matt Finestone.



Blockworks Research’s Matt Fiebach sees a trend forming, predicting more EVM-equivalent ZK rollups will emerge.



“Oh man there are gonna be 50 EVM equivalent ZK rollups next year aren&#8217;t there,” he said.



<h3 class="wp-block-heading">Open-source approach</h3>



Key to the operation of zk-rollups is the so-called “prover” — cryptographic logic that signs off on transactions while preserving users’ privacy. The speed and design of the prover is already a major point of contention between the competing teams.



“Polygon zkEVM testnet also includes a completely open-sourced zk-Prover — the first of its kind to be released publicly,” Polygon said in a statement.



The zkSync team plans to open-source its EVM when it launches on mainnet — except for the prover. That will have to wait until the project begins to decentralize through its own set of validators and, presumably, via issuance of a token.



“We don&#8217;t have a date yet, because we’re very conservative about giving dates,” Newcomb said, adding the team will be updating a <a href="https://docs.zksync.io/userdocs/roadmap/" target="_blank" rel="noreferrer noopener">public roadmap</a>, with additional specificity as available.



Newcomb said there are huge advantages to adopting a standard prover, such as native bridges which are not really bridges at all, but “straight cryptography,” making it inherently more secure than existing bridges which have been so <a href="https://cms.blockworks.co/tag/hacks" target="_blank" rel="noreferrer noopener">hack prone</a>.



“It’s like a browser agreeing to use Javascript and CSS [standards]&#8230;and all browsers use it the same, and therefore all browsers benefit because of it,” Newcomb told Bankless.



<h3 class="wp-block-heading">From testnet to mainnet</h3>



Polygon expects to launch the mainnet version of their zkEVM in “early 2023,” a Polygon spokesperson told Blockworks.



That’s an extremely optimistic target, according to zkSync’s Newcomb.



&#8220;You can’t do a security audit in that amount of time. You can’t even book a meeting with a security company to schedule them in that amount of time,&#8221; he told Blockworks.



Bjelic responded that &#8220;multiple&#8221; audit contracts are &#8220;being rolled out and being discussed,&#8221; adding that &#8220;Polygon has arguably the strongest in-house security team which is constantly verifying everything that we are building.&#8221;



Newcomb said that a more appropriate testnet period would be &#8220;about 9 months.&#8221;



<blockquote class="wp-block-quote">“I just hope to God they’re not hurrying through testnet in an effort to catch up with us,” he said.</blockquote>



In a separate announcement today, timed to coincide with Polygon’s, zkSync wrote in a blog post that they are <a href="https://blog.matter-labs.io/zksync-l3-pathfinder-to-hit-testnet-in-q1-2023-367a425592db" target="_blank" rel="noreferrer noopener">looking beyond layer-2</a>, to what they term “Pathfinder,” a layer-3, also slated for early 2023.



As multiple teams chase what Polygon’s Bjelic <a href="https://cms.blockworks.co/polygon-unveils-zkevm-the-holy-grail-of-scaling/" target="_blank" rel="noreferrer noopener">frequently has called</a> “the Holy Grail of blockchain scaling,” the race for adoption of zk-rollups — previously seen as a marathon — is now turning into more of a sprint.



Bessie Liu contributed reporting. This story was updated on Oct. 11 at 7:00 a.m. ET with additional comment from Mihailo Bjelic and 3 p.m. ET to clarify zkEVM advantages in relation to other rollups and the interpretation of &#8220;EVM-compatible.&#8221;



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Polygon and Matter Labs Compete on zkEVM Rollups

Jack Kubinec

<div id="highlights-block_62daeb7403a20" class="highlights">
 <ul>
 <li>Polygon’s open-source zkEVM code is incomplete</li>
 <li>“We’re not at the point where any team has a zkEVM prover that works,” an Arbitrum developer said</li>
 </ul>
 
</div>



Within 36 hours this past week, Polygon, zkSync and Scroll teased their own imminent releases of the <a href="https://cms.blockworks.co/polygon-unveils-zkevm-the-holy-grail-of-scaling/" target="_blank" rel="noreferrer noopener">“holy grail” of layer-2 technology</a> — the zero-knowledge Ethereum virtual machine (zkEVM).&nbsp;



The announcements raised eyebrows. Blockworks has spoken with multiple programmers who’ve questioned how close the space really is to a functioning zkEVM.



ZkEVMs would greatly increase <a href="https://cms.blockworks.co/tag/ethereum/" target="_blank" rel="noreferrer noopener">Ethereum</a> layer-2 transaction speeds over the status quo of <a href="https://ethereum.org/en/developers/docs/scaling/optimistic-rollups/" target="_blank" rel="noreferrer noopener">optimistic rollups</a>. The blockchain’s co-founder Vitalik Buterin has <a href="https://vitalik.ca/general/2021/01/05/rollup.html" target="_blank" rel="noreferrer noopener">hailed the technology as the future of Ethereum scaling</a>.



Zero-knowledge rollups move transactions off-chain for verification before sending a batch of data to be settled on Ethereum. The process relies on a so-called “prover” that can label data as true or false while preserving users’ privacy.



Provers are essential for these kinds of scaling solutions. For some, this week’s zkEVM announcements did not contain sufficient indication any team has created a functioning prover.



“We’re not at the point where any team has a zkEVM prover that works,” said Steven Goldfeder, the CEO of Offchain Labs, the developer behind the optimistic rollup Arbitrum. “What I think is happening is they’re quite far from production.”



Not to mention, layer-2 sequencers are still centralized, and most zkEVM builders have yet to actually make their provers — the core of the technology — open source.



Polygon, the layer-2 giant that recently announced a partnership <a href="https://cms.blockworks.co/meta-trials-nft-display-feature-for-instagram-creators-and-collectors/" target="_blank" rel="noreferrer noopener">bringing non-fungible tokens (NFTs) to Meta</a>, made its zkEVM code public. Polygon believes clarifying its code sets the company ahead of Scroll and zkSync, neither of which has publicly posted its prover.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We support all Ethereum projects, but it&#39;s good to clarify: ✅ Polygon zkEVM is FULL-FEATURED &amp; OPEN SOURCE ❌ Scroll currently supports only a portion of EVM opcodes ❌ zkSync doesn&#39;t have an (open source) prover, so we don&#39;t know much Ignore marketing, ask to see the code. <a href="https://t.co/D5dhwYe8Xx">https://t.co/D5dhwYe8Xx</a>&mdash; Mihailo Bjelic (@MihailoBjelic) <a href="https://twitter.com/MihailoBjelic/status/1549777790114971651?ref_src=twsrc%5Etfw">July 20, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



But, some question if Polygon’s code is as “full-featured” as advertised. The prover code Polygon <a href="https://github.com/0xPolygonHermez/zkevm-prover/blob/main/src/prover/prover.cpp" target="_blank" rel="noreferrer noopener">uploaded to GitHub</a> is not fully functional. Sources familiar with the technology expressed doubt about Polygon&#8217;s code, with one questioning Polygon’s ability to run proofs at all in the program’s current state.



David Schwartz, technical lead at Polygon Hermez, told Blockworks in an email that the code is a work in progress. Commented code sections in the project&#8217;s GitHub are not currently operative. 



&#8220;We are not hiding anything, not in the docs or the code,&#8221; Schwartz said. &#8220;Competitors like Starkware or zkSync are not open-sourcing their [zero-knowledge] networks at all.&#8221;



<a href="https://cms.blockworks.co/tag/starkware/" target="_blank" rel="noreferrer noopener">Starkware</a>, the company behind StarkNet, a zero-knowledge rollup with an open-source prover, emphasized zkEVM technology is not a simple matter.



Building a prover is “a Herculean task in terms of math, engineering and software. We have a team of 100 and have been at it for four years,” <a href="https://www.linkedin.com/in/eli-ben-sasson-9b7959/?originalSubdomain=il" target="_blank" rel="noreferrer noopener">Eli Ben-Sasson</a>, the company’s president, told Blockworks in a phone call from EthCC.&nbsp;



Even assuming zkEVMs do have functioning provers, making the prover code public would move layer-2s closer to blockchain’s decentralized ideal.



“If the prover is open-source, then you could verify what’s being done with funds,” <a href="https://www.linkedin.com/in/daniel-yanev-38604185/" target="_blank" rel="noreferrer noopener">Dan Yanev</a>, chief product officer at the layer-2 money market protocol Rhino.fi, told Blockworks.&nbsp;



“These companies are pressured to have something in the hands of users,” Yanev said of layer-2s.&nbsp;



Still, Yanev called Polygon’s open source prover a “big step” for zkEVMs and remains optimistic that layer-2 networks will decentralize as the technology matures.



On the other hand, Goldfeder, whose company runs on optimistic rollups, believes the high cost of zero-knowledge proofs will prohibit zkEVMs from being financially sustainable in the long run.



“Scaling needs to come from scaling solutions, not from [venture capital] funding,” Goldfeder said.



Scroll and zkSync did not immediately return requests for comment.



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DeFi Is Betting Big on ‘Zero Knowledge’ — Is the Technology Ready?

<div id="highlights-block_62d78acb6e6e0" class="highlights">
 <ul>
 <li>Polygon is taking a multi-side approach to scaling Ethereum with zkEVM, the first rollup with EVM-equivalence</li>
 <li>“Besides The Merge, this is the second-biggest event in terms of technology in the ecosystem in general,” Polygon co-founder Mihailo Bjelic said</li>
 </ul>
 
</div>



When it comes to scaling Ethereum, Polygon has taken an everything-and-the-kitchen-sink approach.&nbsp;



Its logo may be a hexagon, but Polygon already maintains seven discrete teams building an interrelated web of products.



Three of those teams, Hermez, Zero and Miden, have worked together to create zkEVM — a zero-knowledge proof-based rollup which achieves equivalence with the Ethereum virtual machine (EVM), which the Polygon team defines as EVM specification-level compatibility. 



That means developers can easily deploy applications written in Solidity — Ethereum’s smart contract language — and take advantage of the ecosystem’s robust developer tools, just as they do on the Ethereum mainnet.



The move Wednesday, at the Ethereum Community Conference in Paris, heralds the imminent launch of a zkEVM testnet, a goal set by the Hermez team at the same conference a year ago.



“It’s been a long journey — I can talk in personal terms — this has been the project of my life,” said Jordi Baylina, technical lead at Polygon Hermez, during the group’s #PolygonTuesdays weekly Twitter space, last week. “Scaling Ethereum, scaling blockchains, has been the dream since at least 2015 if not before.”



Rollups based on zero-knowledge proofs have several advantages over the optimistic rollups which are already up and running, such as Optimism and Arbitrum — the two largest by total value locked.



Zero-knowledge rollups combine many layer-2 transactions into one — which settle on Ethereum as a validity proof. While computationally intensive, zero-knowledge rollups are much faster and more scalable.



“It makes Ethereum almost technically or theoretically infinitely scalable,” Polygon’s Sandeep Nailwal said during the Twitter space, adding that in contrast to other solutions, only Ethereum itself is needed. “It has network effects. It has developers. It has users, so you know we can take Web3 to the next stage of growth,” he said.



Other projects are working on EVM-compatible or EVM-equivalent zero-knowledge rollups, such as Scroll and Matter Lab’s zkSync, but Polygon has a significant funding edge thanks to its <a href="https://cms.blockworks.co/polygon-closes-450m-raise-led-by-sequoia-india/" target="_blank" rel="noreferrer noopener">$450 million raise in February</a>.



A closed testnet of Polygon’s zkEVM should be available within two weeks with a public permissionless testnet to follow a few weeks later, Polygon co-founder Mihailo Bjelic told Blockworks. The product is expected to reach the Ethereum mainnet by year&#8217;s end. Major Web3 applications such as <a href="https://cms.blockworks.co/tag/uniswap/" target="_blank" rel="noreferrer noopener">Uniswap</a> are planning to deploy on zkEVM.



“A future configuration of off-chain data availability will be able to reduce the fees further,” Bjelic said.



<h3 class="wp-block-heading">Polygon Avail envisions sovereign rollup chains</h3>



While zkEVM is “a proper old-school rollup,” Bjelic said, potentially significant efficiency gains are possible by using an off-chain data availability solution, such as Polygon Avail.



Avail is an entirely new blockchain focused on data availability that fits into a framework for scalability known as “modular” — as opposed to monolithic, such as Ethereum is today, where execution, data availability and settlement all occurs on the same layer.



In a rollup, 70% to 85% of the cost is attributed to storing Ethereum call data, Avail lead Anurag Arjun told Blockworks.&nbsp;



“That component can move to Avail,” he said.



Doing so would transform zkEVM into what’s known as a validium.



“Everyone is really looking for lower transaction fees, if the security can be maintained,” Arjun said. “You will see every rollup — at least in my opinion — will have a rollup version and a validium version.”



ZkEVM is a likely candidate for upgrading the existing Polygon <a href="https://cms.blockworks.co/proof-of-work-vs-proof-of-stake-whats-the-difference/" target="_blank" rel="noreferrer noopener">proof-of-stake</a> chain — the Ethereum-aligned sidechain using the MATIC token that was Polygon’s first foray into Ethereum scaling.



“That’s probably the end goal,” Bjelic said.&nbsp;



A team at Polygon is working on a way to migrate the entire proof-of-stake chain into a future version of the zkEVM in a way which would not require dApp developers or users to take any action. But such a solution is still about a year away.



“Polygon is a multichain ecosystem. We believe there will be probably thousands such chains built on top of Ethereum,” Nailwal said, stressing the open-source nature of all the company’s development efforts. “Cryptography must be open to be safe…Whatever we are building is for the public good and everything will be open source and will be in the public domain.”



This story was updated on July 20, 2022, at 11:31 am ET.



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