Key points:

  • Validiums are scalable solutions for Ethereum that process off-chain transactions using zero-disclosure proofs to ensure their validity.

  • Validiums enable efficient transaction processing by engaging operators to batch process and verify transactions, reducing on-chain data storage and gas fees.

  • While offering benefits such as increased transaction speed and privacy, validiums also face challenges such as data availability risks and potential centralization issues. 

Introduction

Blockchain technology has improved significantly over the years, but scalability remains one of the key challenges. In this article, we'll take a look at validiums, how they work, and how they can improve Ethereum's scalability.

What are validiums?

Validiums are Ethereum scaling solutions that use off-chain data availability and computation to process transactions more efficiently. Unlike zero-disclosure rollups (zk-rollups), which keep some data onchain, validiums keep transactions off-chain using zero-disclosure proofs disclosure (ZKP) to check their validity.

How do validiums work?

Validiums work by executing transactions outside the Ethereum mainnet, using smart contracts on Ethereum to ensure transaction validity and integrity. Let's look at some of the key aspects of validiums.

Transactions

When a user wants to make a transaction using validium, he sends it to the operator. Operators are nodes that are responsible for executing transactions on the validium blockchain. It can be one organization or a group of organizations selected through the proof-of-stake system (PoS). 

The operator collects transactions in a batch and processes them offchain. Once the batch is ready, the operator uses a special system called a confirmation scheme to create proof that the transactions were completed correctly.

Obligations of the state

Validium's state (a record of all accounts and their balances) is like a large tree known as the Merkle Tree. The root of this tree, called the state root, is like a fingerprint that represents the entire state. This state root is stored on Ethereum. 

As the operator processes transactions, it updates the state root to reflect new account balances and states. They then send this new state root, along with proof that everything was done correctly, to the Ethereum mainnet. 

Unlike zk-rolls, validium block producers do not need to publish all transaction details on Ethereum. If Ethereum verifies the confirmation, the new state is accepted and the validium is updated.

Making deposits and withdrawals

Users can deposit their funds from Ethereum to validium by sending ETH or other tokens through a dedicated Ethereum contract. The contract transfers this deposit to the off-chain validium and credits the user's off-chain account. 

When withdrawing funds back to Ethereum, users send a withdrawal request to the operator. The operator includes the request in the batch, and once the batch is verified on Ethereum, users can withdraw their funds.

Compatibility of validiums with EVM

Simple programs 

Validiums are effective for simple applications such as token swaps and payments because they can quickly process many transactions without having to store all data on the Ethereum mainnet. This makes them ideal for applications where transactions are simple and do not require complex calculations. 

Problems with smart contracts 

Smart contracts are applications that run on the blockchain and often contain complex operations. Validiums have problems with them because proving that complex operations have been performed correctly requires more computing power. This makes it difficult for validiums to support the wide range of functions that smart contracts can offer. 

Potential solutions

Some projects are working on making validiums more compatible with the capabilities of Ethereum smart contracts. One approach is to create special versions of programming languages ​​such as Solidity (used to write Ethereum smart contracts) that are optimized for validiums. However, this can be a limitation as it may not support all the features of the regular Ethereum programming environment.

Advantages of validiums

Efficiency

Validiums can process up to 9,000 transactions per second (TPS), offloading data storage and computation from the Ethereum mainnet. This is very important for applications such as decentralized exchanges (DEX), where speed and economy are important.

Cost reduction

Validiums can significantly reduce gas fees by not publishing on-chain transaction data, allowing users to benefit from lower transaction costs.

Enhanced security

With off-chain data storage, validium can offer increased privacy for transactions and an additional layer of security without compromising scalability.

Validity problems

Data availability risks

The dependence of validiums on the availability of off-chain data also creates risks. If operators or data availability managers hide transaction data, it may not be possible to obtain the necessary evidence to withdraw user funds.

The risk of centralization

The need for specialized equipment to obtain proofs of validity can potentially lead to centralization. If only a few organizations can afford the necessary resources, they can dominate the network, undermining its decentralized nature.

Results

Validiums are scaling solutions designed to enhance the Ethereum network by processing off-chain transactions while ensuring transaction integrity through zero-disclosure proofs. By removing the limitations of on-chain data storage, validiums can improve transaction throughput, which is an important step in solving the blockchain scalability problem.

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