zkEVMs - Aki’s Outlook on Commerciality
2023.4.7 | Melody_Taira, Lyvz
Technological differences signal divergent commercial outlooks for zk-based roll-ups and the ecosystem trends to monitor.
Behind the heated race among zk-Rollups, many articles have already summarized the technical differences among the various solutions, so we won’t reiterate them here.
Instead, let’s discuss some common knowledge, business outlooks, and more user-oriented aspects to see how these differences may lead to entirely different ecosystems.
As the highest-valued Ethereum ZK scaling solution in the private market, whose founders originated the zk-STARK cryptographic theory, StarkNet represents a technical school that has long been the industry standard. Founder Eli Ben-Sassen is even the inventor of zk-SNARKs and ZK-STARKs, which are widely used in the blockchain space.
However, we also found that in many products/protocols crucial to integrating with the wider Ethereum EVM ecosystem, the StarkNet ecosystem is still exploring more developer-friendly and mass-oriented solutions due to its technical path dependence. We believe that the StarkNet team may continue to pursue a two-pronged business strategy in the future:
On one hand, by leveraging the mature StarkNet for customized development services for large-scale ZKP-demanding projects, such as AAA productions from Web2 game studios or massive on-chain metaverse experiments by IP holders.
On the other hand, by supporting smart contract wallets (Argent X, Braavos) and Cario x Solidity developer middleware bridges (Kakarot, Wrap), StarkNet aims to enhance collaboration with the Ethereum ecosystem as a whole.
Unlike optimistic rollups (OP-rollups), which require the establishment of smart contract wallets through EIP-4337 along with the Ethereum mainnet, StarkNet supports account abstraction-based smart contract wallets on L2 from the beginning. Smart contract wallets deployed on StarkNet can utilize the encryption capabilities of built-in smartphone chips for hardware signing and multi-factor authentication while innovating at the blockchain contract level for social recovery, mobile wallet payments, and more.
Let’s imagine. A large mobile hardware company with a massive Web2 user base enters the Web3 world through a StarkNet-powered metaverse or large-scale on-chain game.
zkSync, who recently launched its zkEVM 2.0 upgrade, is one of the most highly anticipated zk-based L2 solutions, boasting an extremely high-performance ceiling while prioritizing security and user experience, with a maximum TPS potential of 20,000+.
The latest zkSync Era leverages an LLVM-based Solidity compiler, zkSync’s award-winning GPU prover, and Matter Labs’ upcoming Redshift proving system to reduce transaction fees to well below 1 cent.
zkSync Era is also dedicated to addressing blockchain data storage issues, providing an innovative zkPorter feature on top of EIP-4844, which allows users and developers to choose data availability formats based on different security requirements and.
This feature allows developers to subtly balance their development focus between high-performance validium (zkPorter) and high-security validity (zk-Rollup).
Additionally, zkSync Era introduces Hyperchains as its primary “L3” development direction, a fractal scaling solution. Hyperchains leverage LLVM-based zkEVMs (LLVM is the most mature compiler stack architecture in the world) for parallel execution but shared settlement on L1.
Anyone can deploy Hyperchains without permission, featuring a highly customizable modular zkEVM chain stack, supported by the same zkEVM engine as the main zkSync L2. Developers can choose different routes, selecting corresponding virtual machines (e.g., MoveVM), sequencer designs, and data availability (such as the abovementioned zkRollup, zkPorter, and zkValidium).
The highly customizable and modular roll-up stack launched by zkSync Era reminds us of the recent OP Stack that entered the public eye through Coinbase’s Base chain.
We believe that zkSync’s B2B development path could perhaps draw from Optimism’s experience, leveraging its large-scale user base, strong institutional supporters, and establishing a virtuous cycle of airdrop expectations and ecosystem development governance mechanisms (such as Token House, RetroPGF, etc.) with the developer community.
This approach not only promotes innovative applications beyond infrastructure, but also encourages the latest versions of existing protocols (such as traditional DeFi blue chips on L1) to start deploying on the Era platform.
From a consumer perspective, zkSync Era could potentially focus on Ethereum’s currently weaker Web3 social networking aspect within its L2 players, striving to create the strongest social networks and social graphs within the Ethereum ecosystem to attract more lightweight Web3 users.
We’ve noticed that zkSync’s Era Hyperchain has an innovation well-suited for social protocols, which can also be used to achieve high concurrency and short-lived execution environments. For example, developers can launch a Rollup to cost-effectively mint millions of fungible NFT assets within a social network, bridge these NFTs to another execution layer, and finally shut down the temporary Rollup, providing the necessary infrastructure capacity elasticity for social protocols.
Polygon’s overall strategy has always been clear, and the team has been resolute in its execution.
We see clear differentiation in competition between Polygon and other Ethereum rollups. For its social ecosystem, Polygon has become one of the two Web3 social giants alongside the BNB chain, thanks to the Lens Protocol ecosystem and Galxe. Games like Planet IX, Hunters On-Chain, and Benji Bananas also boast hundreds of thousands of monthly active wallet addresses.
Recently, Polygon zkEVM and Immutable announced a strategic partnership at the 2023 GDC conference to better serve studios and developers in creating high-quality on-chain games. According to Cumberland’s report, Polygon is expected to generate $300 million in annual revenue from non-crypto partners in the short to medium term, over ten times its current daily gas fee income of tens of thousands of dollars.
What’s unique is that Polygon has become a Web3 ambassador in traditional industries through partnerships with a large number of brands outside the blockchain industry.
Through close cooperation with Forum3, the organizer of the Starbucks Odyssey event, Polygon is expected to bring in nearly 27 million new North American blockchain users within the next year, a seismic shift for the industry’s existing user base. Polygon has also recently joined Disney’s accelerator program, integrated with Stripe’s global payment system, supported Reddit’s NFT emoticon system, and partnered with world-renowned brands like Adobe, Nike, Adidas, Mercedes-Benz, Mastercard, and Coca-Cola.
We believe that Polygon zkEVM (Hermez) can inherit the strong competitiveness of the entire Polygon ecosystem in traditional fields, integrate more closely with the Ethereum ecosystem through its zkEVM L2, and allow Web2 brands to enjoy the asset security premium brought by Ethereum L1. We are bullish on the rapid growth of gaming and social sectors within the Polygon ecosystem.
As the youngest Ethereum zk L2 solution, Scroll may be the closest zk-based L2 development team to the Ethereum Foundation, mustering one of the most powerful zero-knowledge-proof teams.
Scroll is catching up well with the progress of other zk-based rollups, based on its technological capacity and iteration speed.
Moreover, Scroll is at the forefront of decentralized design for prover networks and sequencers, especially in proposing solutions for using GPUs/ASICs to enhance computing power and decentralize verification networks.
In theory, Scroll’s EVM has a higher code compatibility ceiling compared to zkSync Era and Starkware, meaning that developers no longer need to trust new virtual machines and compilers (such as zkSync’s LLVM). This can also avoid risks associated with using intermediate code to achieve EVM compatibility during transaction execution (a current feature of Polygon zkEVM).
From day one, Scroll’s team has been deeply involved with Ethereum’s core activities, building its brand awareness and infrastructure suite, such as oracles and wallets.
While all Ethereum L1 and even L2 protocol developments can theoretically be quickly deployed on Scroll, we believe Scroll’s biggest opportunity lies in capturing the crown jewel of DeFi: decentralized central limit order book exchanges (CLOB).
Scroll’s powerful performance potential, combined with Ethereum’s mainnet’s urgent need for a secure and efficient trading environment, may lead to an explosion in such DEX protocols. We have also noticed that Web3 projects like Lens Protocol have begun experimenting with deployment on Scroll, and we look forward to more good news coming along for Scroll.