Polygon just made an audacious move — it tapped zero-knowledge (ZK) technologies, a cryptographic breakthrough, to scale Ethereum as the network prepares its biggest upgrade ever.
On July 20, Polygon open-sourced the code for zkEVM, its Layer 2 rollup that uses zero-knowledge technology. The rollup, a Layer 2 chain offering low-cost and high speed Ethereum transactions, is fully compatible with Ethereum Virtual Machine (EVM) smart contracts. Polygon describes it as “the first EVM-equivalent ZK L2.”
Same as Ethereum
“You can build on Polygon zkEVM the same way you would on Ethereum,” Polygon wrote in a blog post. “You can deploy any Ethereum smart contract. Any tooling that works with Ethereum will work on Polygon zkEVM.”
Polygon added that a testnet for zkEVM will soon be live.
Polygon’s existing Proof of Stake sidechain represents a total value locked of $1.8B, according to DeFi Llama. Its native token, MATIC, is the 12th-largest crypto asset with a capitalization of nearly $7B, according to CoinGecko.
Scalability has long been Ethereum’s largest hurdle in its quest to become the settlement layer for the internet of value. While Ethereum can currently process 10 transactions per second, its developers hope to scale the network so it can handle up to 10M transactions each second and support the online economic activity of the entire globe.
Bobby Ong, co-founder of CoinGecko, told The Defiant that zkEVM solutions are critical to help scale Ethereum and are “a sorely needed addition to support the next bull cycle.”
“It seems like these three teams are in competition to launch first as there is definitely a first-mover advantage to gaining market share. It will be exciting times to see how these teams compete against each other!” he said.
Low Cost Layer 2
Rollups have emerged as the current leading solution for scaling Ethereum. They work by bundling together transactions executed on a low-cost Layer 2 network, which are then submitted in batches for validation on Ethereum’s base layer. In a recent appearance on The Defiant Podcast, Justin Drake of the Ethereum Foundation estimated that rollups could scale the network by up to 100x.
Arbitrum and Optimism, the top two Layer 2 scaling solutions by total value locked (TVL), both leverage optimistic rollups. These rollups assume transactions are accurate but allow network participants to contest them, with validators found to be submitting inaccurate transactions at risk of losing significant collateral.
By contrast, zero-knowledge tech offers enhanced speed and privacy, with just the time and date at which a transaction occurred published to the blockchain and only counterparties able to access further data. A December blog post from Ethereum chief scientist, Vitalik Buterin, described ZK rollups as a vital component of Ethereum’s scaling roadmap for the coming years.
Polygon revealed zkEVM on the same day that development teams Matter Labs and Scroll announced their own EVM-equivalent rollups powered by zero-knowledge proofs. The notion of “EVM equivalence” was pioneered by Optimism with its Bedrock upgrade in May.
Scroll also announced it is looking for external testers to participate in the pre-alpha testnet for their own zkEVM-based rollup on July 20. The solution is being developed in partnership with the Ethereum Foundation.
Matter Labs claimed that its newly announced zkEVM rollup, zkSync 2.0, is actually “the first zkEVM rollup,” tweeting that the solution will be launched on mainnet in 100 days.
According to L2beat, zkSync’s first iteration is currently the sixth-largest rollup with $64M locked on the network. Although zkSync is EVM-compatible, it is not fully EVM equivalent, meaning developers working with Solidity — Ethereum’s native programming language — may need to make changes to their code required to deploy on the network.
Cam Crossley, an analyst at web3 venture studio NotCentralised, highlighted the increasing competition between development teams to launch the first ZK-rollup boasting full compatibility with the Ethereum Virtual Machine.
Crossley emphasized the ease with which Ethereum developers can deploy existing code to rollups offering full EVM-equivalence, noting that rival ZK-based rollups that only offer partial EVM-compatibility have struggled to gain market share.
“While StarkWare launched their universal zk rollup, StarkNet, earlier in the year, the primary barrier to entry here has been convincing developers to learn Cairo, Starkware’s newly-developed programming language. As a result, StarkNet currently secures [less than] $1M of TVL,” Crossley told The Defiant.
Crossley added that optimistic rollups are “hindered by slow withdrawals that usually take several days to settle on L1 Ethereum.”
Competition between the teams working on ZK-rollups is heating up, with Polygon co-founder, Mihailo Bjelic, dismissing Polygon’s rivals’ claims of EVM-equivalence. He tweeted that Scroll only supports a portion of opcodes, and criticized the lack of open-source code for zkSync 2.0 stating “we don’t know much.”
Toghrul Maharramov, a senior researcher at Scroll, hit back, tweeting that Polygon zkEVM is not a zkEVM. ”Ignore the marketing, ask to see the code,” he said.
Last August, Polygon announced a strategic pivot and $1B allocation toward researching and developing zero-knowledge scaling solutions. Polygon merged with ZK scaling solution Hermez in a deal worth $250M that same month, with the project now culminating in the release in zkEVM.
Polygon also unveiled a hybrid ZK and Optimistic rollup in partnership with ‘big four’ financial services firm Ernst & Young in May, and launched an identity solution based on zero-knowledge technology in March.