Last week, Solana launched a new technology called “ZK Compression”, which is said to reduce Solana’s state cost and allow Solana to improve network scalability without L2. This is simply a slap in Ethereum’s face that I won.
Solana co-founder Anatoly Yakovenko also appeared to emphasize that "all executions of this technology occur on L1 and are ordered by L1 validators." Justin Bons, founder and CIO of Cyber Capital, believes that "this obviously puts Solana far ahead of ETH in terms of actual L1 scalability, solving one of Solana's biggest survival problems."
Is the Ethereum community "broken"?
Blockchain has a "trilemma", that is, it is difficult for a distributed network to balance decentralization, security, and scalability. On the basis of maintaining the first two, in order to improve scalability, Ethereum chose to outsource its execution layer business to L2.
From the initial plasma to the current rollup, L2 has indeed solved Ethereum's scalability problem, making Ethereum an "asset of everything". However, this choice has also brought an unexpected state of chaos to Ethereum. As L2 gradually fragments, Ethereum's own value capture ability has been gradually weakened. On June 29, the Ethereum mainnet gas fee even dropped to 1 Gwei.
Not long ago, the debate between Ethereum and Solana also focused on L2. It can be said that the L2 solution was a big gamble for Ethereum. However, this dilemma was solved by Solana. Ethereum believers naturally could not easily accept this reality and questioned the "L1 nature" of ZK Compression.
Among Ethereum’s L2 solutions, Validium’s mechanism is very similar to zkRollup, and all its transaction validity is enforced using zero-knowledge proofs. The main difference is that data availability in zkRollup is on-chain, while Validium remains off-chain.
For this reason, when Mert Mumtaz, CEO of Solana ecosystem development platform Helius, said that ZK Compression data is kept off-chain, the Ethereum community regarded it as validium. Among them, CEHV partner Adam Cochran firmly stated that ZK Compression is Solana's L2 solution, and he believes that "one day, the Solana crowd will realize that what they have built is a good rollup based on L2 functionality/validity, not a whole chain."
Even though Anatoly emphasized that “all execution happens on L1 and is ordered by L1 validators,” Adam insisted that ZK Compression could not be L1.
The Solana community responded with a meme, mocking Ethereum believers for claiming to be experts without doing serious research. Mert even named ZK Compression ZK validium out of spite.
Solana Airdrop Costs 5,200 Times Cheaper
ZK Compression is a blockchain expansion solution jointly launched by Solana ecosystem development platform Helius and Solana ecosystem privacy project Light Protocol. According to Helius CEO Mert Mumtazt, ZK Compression will be performed directly on L1 without L2, which will greatly improve the scalability of the Solana network, "and take a step towards building a financial computer - an unstoppable, global, atomic state machine synchronized at the speed of light."
According to the ZK Compression documentation, the technology is a new primitive built on Solana that enables developers to build applications at scale. Developers and users can choose to compress their on-chain states, reducing state costs by orders of magnitude while maintaining the security, performance, and composability of Solana L1.
ZK Compression works through a process called state compression, allowing developers to use Solana's cheaper ledger space instead of more expensive account space to store certain types of data. "Hashes" or "fingerprints" of off-chain data are stored on-chain for verification using "sparse state trees."
A purely technical explanation may be too complicated, but to put it simply, this technology reduces Solana’s state cost.
In Solana, technicians face two costs - computational cost and state cost. Solana already has cheap computational power, but state is expensive. Allocating accounts, paying rent, and scaling with users have proven to be huge obstacles for Solana developers, and ZK Compression solves this problem.
Mert used the cost of airdrops as an example. Assuming an airdrop is made to 1,000,000 users, the state cost would be reduced from over $260,000 to $50, which is 5,200 times cheaper.
In order to make the L1 nature of the technology more convincing, Mert named Ethereum founder Vitalik on Farcaster and asked him to comment on the technical principles of ZK Compression. Vitalik also responded seriously and said that the technology is more like a stateless client architecture.
Vitalik interprets ZK Compression into 3 main points, first, you have a new class of accounts, for which only the hash of their state is stored on-chain; second, to interact with these accounts, you need to write a TX that specifies the pre-state hash and post-state hash of N accounts and provides a validity proof (assuming this means ZK-SNARK); third, the new state is required to be public (this makes sense, otherwise you can randomly send someone a sum of money and their account will be inaccessible. You can get around this and make it a Ut xo system, but that would be a significant limitation).
In addition to the interpretation, Vitalik also raised questions about the document. On the one hand, it was the 128-byte validity proof mentioned in the document, and on the other hand, it was whether the public content included transaction content.
Later, Vitalik expressed his doubts again. He thought that the figures claimed by ZK Compression were like that if done separately each time, the cost of verifying SNARK would be higher than the cost of doing some small actions and hash operations (such as token transfers). The benefits of ZK rollup come from "one" SNARK wrapping "many" transactions.
But Vitalik's question was not responded to, and his initial description of ZK Compression as a "stateless client architecture" gave Solana's supporters more confidence that the technology is L1.
Will Rollup be the perfect match for Solana?
Solana has been looking for value for its network. The valuation logic of the altchains that emerged from the last bull market is not exactly like Bitcoin and Ethereum. Due to the cheap block space, it is difficult for the corresponding coin prices to rise significantly. However, Solana is still focusing on compression technology and constantly reducing its costs, which is a huge challenge to the appreciation of SOL to a certain extent.
Even taking into account Moore’s Law, even if hardware continues to improve in performance and Solana is optimized for this hardware progress, this does not mean that Solana will be able to handle the world’s demand, but Solana will manage better than other chains in terms of reliance on composability and low latency.
Unlike Ethereum, the Solana mainnet is not intended to be a "B2B chain"; it has always been and always will be a consumer chain. Building distributed systems at scale is extremely challenging, and Solana has the best potential to become the shared ledger for the world's most valuable transactions.
As for rollups, Solana rollups will be mostly abstracted from end users.
From an ideological point of view, Ethereum's rollup is top-down, that is, the Ethereum foundation and leaders decide that the best way to scale is through rollup, and then start supporting various Layer2 after the CryptoKitties incident. At Solana, demand comes from the bottom up, from app developers with significant user adoption. As a result, most current roll-up plays are marketing plays that are more narrative-driven than user-need driven. This is a significant difference that could lead to a different rollup future than Ethereum.
But the state compression that ZK Compression enables for Solana, combined with Firedancer, multiple concurrent leaders, asynchronous execution, and an ecosystem of thousands of developers, undoubtedly gives Solana a real chance for crypto.