Blockchains were developed to circumvent authority with a censorship-resistant decentralized system. In such a system, processes of exchanging, storing and verifying information take place through many devices and humans. They are highly complex and, while they bring us great benefits of transparency, immutability and decentralization, the notions of privacy and scalability are still hurdles to go by before we can see any programmable blockchain going mainstream. This is where Zero-Knowledge (ZK) proof comes in play as a combination of composability, privacy and immutability.

In this article, you’ll find a brief definition of Zero Knowledge Proofs (ZKps), understand their benefits and how they solve the above-mentioned issues and dive into the answers coming so far around Ethereum, the leader in decentralized applications and users.

ZK Succinct Argument of Knowledge (SNARK) is a proofing method where one party can prove to another party that a given statement is true without revealing any specific underlying information. The proof can be verified quickly, even if the underlying computation is lengthy. Most cypherpunks and mathematicians consider ZKps to be the most powerful cryptographic breakthrough of the last decade.

How are ZKps implemented and why?

So far, on-chain transactions are slow because of the size and number of blocks that can be processed. This scalability issue is presently solved by different approaches issuing from various teams in the rollup / cross-chain cosmos. Rollups bundle transactions together off chain - which enables enhanced computation for cheaper fees, but in a more centralized way - before sending them back to the execution layer and immutable ledger of the blockchain. They require a fraud-proof mechanism to ensure that we can trust what has happened off chain and during the bridging to the main chain. Hence rollups have longer validation periods and larger vulnerability surfaces which exposes them to hacks (knowing that around $2B exploits have already occurred in the rollup and the bridging ecosystem to date).

However, trustlessness is the convention with ZK rollups. ZKps can solve both Scalability and Privacy issues. Scalability - by taking and verifying off the chain the blocks that are too long, generating a proof and sharing it instead of asking for the network to proceed with the full block. And Privacy - as one can prove the right to transfer assets without revealing all the links detailing which assets were received.

What are the benefits of ZK adoption?

ZK tech is so formidably innovating that it requires unique math mastery to get around the polynomials behind it. There are brilliant teams and massive funding around ZK tech, and - although they are not quite ready yet - the horizon is bright. ZKps are so remarkable that Satoshi acknowledged in 2010 that "a much better, easier, more convenient implementation of Bitcoin would be possible" (Hello, Zcash). Moreover, to my knowledge, today all decentralized blockchain communities are looking into implementing ZKps in one way or another, and the term "ZK Ethereum" has been spotted in Eth roadmap discussions. Yet, current ZK-based blockchains like Minaprotocol, Algorand or AlephZero lack adoption and the blooming dapp ecosystem and liquidity that come with it. Although this might change, it explains why many ZK builders are looking to be fully compatible with Ethereum's virtual machine (EVM). 

Some ZK solutions are already in use on Ethereum Layer 2. They provide great products such as dYdX on Starknet which enables margin spot and perpetual trading, and Argent wallet / Argent X on zkSync which enables social recovery and a user-friendly DeFi experience on mobile / browser (ETH 2 staking, Yearn& Aave integration), the latter being highly recommended to onboard crypto-curious friends!

In sum, ZK adoption means:

• Cheaper fees • Fewer security assumptions

• Quicker and more private transactions • Better UX

ZK projects compatible with Ethereum’s virtual machine (ZK EVM)

Vitalik Buterin indexed ZK EVM project integrations into four tiers, showcasing Ethereum's capabilities and name-dropping some hot protocols to keep an eye on.

Tier 1: Fully Ethereum Compatible 

These do not change any part of Ethereum to generate proofs, as they use the same consensus layer and data structure. As Ethereum was not originally conceived around ZK proofs, in the short to medium term they are not to be implemented directly on layer1, but it would be easy to integrate them through rollups to scale Ethereum by migrating the execution client in the rollup. Yet, at present, it takes a lot of time to generate ZK proofs on such settings, and finer engineering is needed. There are OpenSource Teams from Privacy & Scaling Explorations (PSE) that are currently working on this.

Tier 2: Quite EVM-Equivalent

Tier 2 ZK projects would be almost fully compatible with all applications and generate ZK proofs a bit faster, only by raising gas fees for specific operations or by removing parts of the Ethereum stack that are too hostile to ZK proofing (be it because of data structure or block receipt structures). 

Tier 3: Almost EVM-Equivalent

On a transitional stage to Tier 2, Tier 3 projects verify most of the EVM code generating proof faster. They however rely on a different EVM code internal logic as they are removing Ethereum precompiled contracts that are ZK-phobic. Hence, some applications cannot run on such ZK-EVM. Scroll and Polygon Hermes are currently in this tier, working to shoot compatibility issues and get to Tier 2.

Tier 4: High-Level Language Equivalent

The smart contract source code is compiled in a language that is more compatible with ZK logic. This enables very fast ZK proof generation but unveils more incompatibility problems as many dapps and Ethereum's core debugging infrastructure rely on EVM code. Here come zkSync (which claims to achieve Tier 2 EVM compatibility in Q4), the grandiose Starknet, and the secrecy-focused Aztec!

It won’t take too long until we see fully achieved ZK-rollups and flourishing ZK-powered blockchain ecosystems. The above Tiers have their trade-offs and exploring them is very healthy for blockchain research as the composability of opensource software and communities will retain the best of all these creations. As developments in ZK proofs and the blockchains infrastructure continue, what we are about to witness will be revolutionary.

The Zero Knowledge Dawn

"The privacy of some information is what gives us an advantage over our adversaries." Goldwasser S., Micali S., and Rackoff C (1985)

The Crypto ethos comes from optimism and many believe building public, decentralized and transparent systems will lead to a fairer world. They expect the existing hegemonies and free market to embrace the new transparent tools for the greater good; and hope that regulations won't go against it. Yet the conflict between old and new paradigms is a recursive tale, and the attacks on decentralized applications and privacy-enhancing protocols have already started.

Now that the ZK pandora's box is open, the ZKp-enabled secrecy is a powerful weapon against censorship forces and mass surveillance. The era of anonymous smart contracts has commenced and, with it, the promise for more freedom, vaster spaces for democratic movements and more equal communities.

Share if you liked it and follow me for more articles on what is new in crypto! 

Thank you for your feedback!

Sources and references:

http://www.shirpeled.com/2018/09/a-hands-on-tutorial-for-zero-knowledge.html

https://www.shirpeled.com/2018/10/a-hands-on-tutorial-for-zero-knowledge_2.html

https://vitalik.ca/general/2021/01/26/snarks.html

https://vitalik.ca/general/2021/01/26/snarks.html

https://ethereum-magicians.org/t/a-rollup-centric-ethereum-roadmap/4698

https://vitalik.eth.limo/general/2022/08/04/zkevm.html

https://dl.acm.org/doi/10.1145/22145.22178

https://polynya.medium.com/understanding-ethereums-rollup-centric-roadmap-1c60d30c060f

https://bitcointalk.org/index.php?topic=770.msg8637#msg8637

Blockchains were developed to circumvent authority with a censorship-resistant decentralized system. In such a system, processes of exchanging, storing and verifying information take place through many devices and humans. They are highly complex and, while they bring us great benefits of transparency, immutability and decentralization, the notions of privacy and scalability are still hurdles to go by before we can see any programmable blockchain going mainstream. This is where Zero-Knowledge (ZK) proof comes in play as a combination of composability, privacy and immutability.

In this article, you’ll find a brief definition of Zero Knowledge Proofs (ZKps), understand their benefits and how they solve the above-mentioned issues and dive into the answers coming so far around Ethereum, the leader in decentralized applications and users.

ZK Succinct Argument of Knowledge (SNARK) is a proofing method where one party can prove to another party that a given statement is true without revealing any specific underlying information. The proof can be verified quickly, even if the underlying computation is lengthy. Most cypherpunks and mathematicians consider ZKps to be the most powerful cryptographic breakthrough of the last decade.

How are ZKps implemented and why?

So far, on-chain transactions are slow because of the size and number of blocks that can be processed. This scalability issue is presently solved by different approaches issuing from various teams in the rollup / cross-chain cosmos. Rollups bundle transactions together off chain - which enables enhanced computation for cheaper fees, but in a more centralized way - before sending them back to the execution layer and immutable ledger of the blockchain. They require a fraud-proof mechanism to ensure that we can trust what has happened off chain and during the bridging to the main chain. Hence rollups have longer validation periods and larger vulnerability surfaces which exposes them to hacks (knowing that around $2B exploits have already occurred in the rollup and the bridging ecosystem to date).

However, trustlessness is the convention with ZK rollups. ZKps can solve both Scalability and Privacy issues. Scalability - by taking and verifying off the chain the blocks that are too long, generating a proof and sharing it instead of asking for the network to proceed with the full block. And Privacy - as one can prove the right to transfer assets without revealing all the links detailing which assets were received.

What are the benefits of ZK adoption?

ZK tech is so formidably innovating that it requires unique math mastery to get around the polynomials behind it. There are brilliant teams and massive funding around ZK tech, and - although they are not quite ready yet - the horizon is bright. ZKps are so remarkable that Satoshi acknowledged in 2010 that "a much better, easier, more convenient implementation of Bitcoin would be possible" (Hello, Zcash). Moreover, to my knowledge, today all decentralized blockchain communities are looking into implementing ZKps in one way or another, and the term "ZK Ethereum" has been spotted in Eth roadmap discussions. Yet, current ZK-based blockchains like Minaprotocol, Algorand or AlephZero lack adoption and the blooming dapp ecosystem and liquidity that come with it. Although this might change, it explains why many ZK builders are looking to be fully compatible with Ethereum's virtual machine (EVM). 

Some ZK solutions are already in use on Ethereum Layer 2. They provide great products such as dYdX on Starknet which enables margin spot and perpetual trading, and Argent wallet / Argent X on zkSync which enables social recovery and a user-friendly DeFi experience on mobile / browser (ETH 2 staking, Yearn& Aave integration), the latter being highly recommended to onboard crypto-curious friends!

In sum, ZK adoption means:

• Cheaper fees • Fewer security assumptions

• Quicker and more private transactions • Better UX

ZK projects compatible with Ethereum’s virtual machine (ZK EVM)

Vitalik Buterin indexed ZK EVM project integrations into four tiers, showcasing Ethereum's capabilities and name-dropping some hot protocols to keep an eye on.

Tier 1: Fully Ethereum Compatible 

These do not change any part of Ethereum to generate proofs, as they use the same consensus layer and data structure. As Ethereum was not originally conceived around ZK proofs, in the short to medium term they are not to be implemented directly on layer1, but it would be easy to integrate them through rollups to scale Ethereum by migrating the execution client in the rollup. Yet, at present, it takes a lot of time to generate ZK proofs on such settings, and finer engineering is needed. There are OpenSource Teams from Privacy & Scaling Explorations (PSE) that are currently working on this.

Tier 2: Quite EVM-Equivalent

Tier 2 ZK projects would be almost fully compatible with all applications and generate ZK proofs a bit faster, only by raising gas fees for specific operations or by removing parts of the Ethereum stack that are too hostile to ZK proofing (be it because of data structure or block receipt structures). 

Tier 3: Almost EVM-Equivalent

On a transitional stage to Tier 2, Tier 3 projects verify most of the EVM code generating proof faster. They however rely on a different EVM code internal logic as they are removing Ethereum precompiled contracts that are ZK-phobic. Hence, some applications cannot run on such ZK-EVM. Scroll and Polygon Hermes are currently in this tier, working to shoot compatibility issues and get to Tier 2.

Tier 4: High-Level Language Equivalent

The smart contract source code is compiled in a language that is more compatible with ZK logic. This enables very fast ZK proof generation but unveils more incompatibility problems as many dapps and Ethereum's core debugging infrastructure rely on EVM code. Here come zkSync (which claims to achieve Tier 2 EVM compatibility in Q4), the grandiose Starknet, and the secrecy-focused Aztec!

It won’t take too long until we see fully achieved ZK-rollups and flourishing ZK-powered blockchain ecosystems. The above Tiers have their trade-offs and exploring them is very healthy for blockchain research as the composability of opensource software and communities will retain the best of all these creations. As developments in ZK proofs and the blockchains infrastructure continue, what we are about to witness will be revolutionary.

The Zero Knowledge Dawn

"The privacy of some information is what gives us an advantage over our adversaries." Goldwasser S., Micali S., and Rackoff C (1985)

The Crypto ethos comes from optimism and many believe building public, decentralized and transparent systems will lead to a fairer world. They expect the existing hegemonies and free market to embrace the new transparent tools for the greater good; and hope that regulations won't go against it. Yet the conflict between old and new paradigms is a recursive tale, and the attacks on decentralized applications and privacy-enhancing protocols have already started.

Now that the ZK pandora's box is open, the ZKp-enabled secrecy is a powerful weapon against censorship forces and mass surveillance. The era of anonymous smart contracts has commenced and, with it, the promise for more freedom, vaster spaces for democratic movements and more equal communities.

Share if you liked it and follow me for more articles on what is new in crypto! 

Thank you for your feedback!

Sources and references:

http://www.shirpeled.com/2018/09/a-hands-on-tutorial-for-zero-knowledge.html

https://www.shirpeled.com/2018/10/a-hands-on-tutorial-for-zero-knowledge_2.html

https://vitalik.ca/general/2021/01/26/snarks.html

https://vitalik.ca/general/2021/01/26/snarks.html

https://ethereum-magicians.org/t/a-rollup-centric-ethereum-roadmap/4698

https://vitalik.eth.limo/general/2022/08/04/zkevm.html

https://dl.acm.org/doi/10.1145/22145.22178

https://polynya.medium.com/understanding-ethereums-rollup-centric-roadmap-1c60d30c060f

https://bitcointalk.org/index.php?topic=770.msg8637#msg8637