The blockchains of today don’t scale for real-time use cases. Fees and latency are still too high for multiplayer games that require sub-200-millisecond tick-rates or micropayments where even minuscule gas fees are prohibitive. Folks are attempting to solve this with rollups, which are touted as the panacea to all our problems, but they help up to a point. Sequencers have to validate and order transactions across the entire L2, and users have to pay gas for every transaction. We must solve the last mile of blockchain scaling, and we can learn from how cloud computing did it: push it to the edges. State channels allow users to transact instantaneously at virtually no transaction fee by ‘localizing computation’. They keep transaction execution off-chain and only submit an on-chain state update when needed. They’re not a general scaling solution, but they’re suited for scenarios where the user set is constrained or bound to infrequently change (e.g. online games, cross-exchange trading, and dark pools).

What makes our state channel construction unique with respect to other implementations is privacy. Inside of a normal state channel, all data is public among participants. Even worse, if there’s a dispute, participants’ private data is leaked on-chain. With our zk state channel, participants can keep inputs private, and in case of a channel dispute no data is leaked. The cumulative state of a session is represented as a single recursive zk proof that users pass between each other off-chain. Solving privacy for real-time use cases is urgent: currently most on-chain games can be easily manipulated. Player data, like map location or player strategy is submitted in the open to the L1/L2 and visible to competing players who can use this information to subvert the game or copy a user’s unique gameplay. With zk state channels users can enjoy a seamless UX without giving up their custody and privacy, and without having to resort to more centralized chains.

If we think of how the topology of internet communication has progressed over the last 10 years we see a massive acceleration in the frequency and size of transmitted data. High Frequency stock market trading, video and music streaming, and the proliferation of online games are all contributors, and there will certainly be other applications we can’t yet predict. With that there’s an expectation that applications work seamlessly in realtime. At the same time, the need for immutability of digital value and information is only going to increase as the traditional institutions around us are eroded of value and legitimacy. zk state channels will be the valve through which realtime digital applications gain immutability.

If you’re interested, follow our work here:

https://github.com/ycryptx/zk-state-channel

Or reach out on Telegram: @ycryptx