Author: Sunny, TechFlow
Guest: Shumo, Founder and CEO of NEBRA
Scaling Ethereum is one of the major advances in the Web3 industry in 2024. Generally, scaling solutions are divided into two categories: L1 scaling and L2 scaling, each of which demonstrates its advantages in different development areas.
L2 scaling can be done using either optimistic (op) roll-ups or zk-rollups. Op roll-ups assume transactions are valid by default and only verify them when challenged, while zk-rollups use zero-knowledge proofs to verify all transactions off-chain before committing to the main chain. In this space, Base leads the way in the use of op roll-ups, while Scroll is one of the leaders in zk-rollups.
Earlier this year, Ethereum founder Vitalik Buterin expressed on Twitter his high expectations that zk-rollups will become the ultimate solution for Ethereum scaling in the next decade.
To further clarify the definition of zk-rollups and their mechanisms, we can point out that they involve the data availability layer (DA), the settlement layer and their corresponding proofs - state proof and consensus proof. Since zk-rollups need to verify the validity of all transaction data, the state transition of transactions and the final state of transactions need to be stored on the chain, which gives rise to the aforementioned two layers.
Before achieving the “ultimate goal” of scaling, Vitalik also emphasized: “To get to this point, a lot of infrastructure and optimized provers are required…”
Therefore, the goal of today’s discussion is to gain insights from a L2 scaling startup called NEBRA, understand the problems NEBRA is working on solving, and how zk-rollups infrastructure can be integrated to achieve this “end goal”.
The current cost of generating a zk proof is $50, which is clearly far from the ultimate goal. Therefore, we invited Shumo, the founder of NEBRA, to discuss how he solved the cost problem through zero-knowledge proof aggregation.
The interview dives into Shumo’s journey to founding NEBRA, his philosophy on decentralization that he gleaned from years of industry experience, and how NEBRA differentiates itself from competing solutions like EigenLayer and Polygon’s aggregation layer through its focus on cryptography and mathematical expertise.
Highlights
The ultimate value of blockchain is that it can promote coordination between people in different countries around the world and eliminate barriers between individuals. A basic understanding is that coordination is inherently costly.
Scaling blockchains via zk-rollups boils down to two main functions: data availability (or publication) and settlement.
Where state proofs are required, data availability is critical to verifying state transitions - it ensures that the data required to verify state changes is always available.
Where proof of consensus is required, settlement involves reaching consensus on the state of data after a transaction occurs.
Zero-knowledge proofs and verifiable computation allow us to verify the correctness of state transitions without re-executing costly state transition functions.
We firmly believe that zero-knowledge proof-based settlement will become the mainstream method within the next decade.
We believe that proof of settlement is one of the most pressing challenges facing blockchains, closely followed by solving the data availability (DA) problem. Our strategy involves the recursive generation of zero-knowledge proofs - either Fourier proofs or aggregating thousands of proofs. This enables all of these proofs to be merged into a single commit on Ethereum. As a result, the cost of proving settlement could be reduced by a factor of ten or more. This is at the core of what NEBRA is developing.
Unlike platforms that may rely on economic games (such as EigenLayer), our approach is based on pure mathematics and cryptography.
Although EigenLayer provides important value, it is also an important strategy to avoid coordination as much as possible and rely entirely on cryptographic solutions without introducing unnecessary trust assumptions.
The idea behind NEBRA is to leverage Ethereum’s existing mature infrastructure — the result of years of community effort and development — to enhance security and functionality, rather than creating unnecessary coordination layers.
Launching your own Layer 1 chain primarily provides the advantage of capturing sorter revenue or miner extractable value (MEV), which will directly increase your protocol revenue.
Philosophical Thinking Behind the Creation of NEBRA
TechFlow: Can you briefly introduce yourself? What is your experience like from starting as an academic to joining Algorand to now focusing on expanding Ethereum infrastructure?
Shumo Chu:
I got my PhD from the University of Washington, and my research area is formal methods and database systems. This includes theoretical research on programming languages and practical applications in distributed systems and database systems. I first became interested in blockchain because I read the Bitcoin white paper, and then I organized a seminar on Bitcoin and cryptocurrency at the University of Washington in 2018.
After graduating from my PhD, although I didn't have a clear plan for my future career, I was sure that I didn't want to work for a big company like Microsoft, Google or Facebook. So I chose to join Algorand, a cryptocurrency startup with a high reputation in the academic community. Algorand was founded by Silvio Micali, a Turing Award winner and professor at MIT. Although the team was excellent, I soon found that the company's culture did not match the grassroots, slightly rebellious spirit that I thought cryptocurrency should have. Algorand chose to work with big banks, which was somewhat contrary to my understanding of the spirit of cryptocurrency.
After working at Algorand, I returned to academia as a teaching assistant professor at UC Santa Barbara, where my research direction shifted to cryptography, specifically zero-knowledge machine learning (ZKML). I co-authored an early paper on ZKML, which was a new start in my academic career. But my passion for entrepreneurship led me to co-found Manta Network, an initial project focused on privacy-preserving blockchains that later evolved into a more user-friendly tool, Manta.
Last July, I left Manta to found NEBRA, a research and development organization focused on advancing the future of zero-knowledge technologies. This experience, from academia to entrepreneurship, sums up my journey in the field of blockchain and cryptography.
On the passion for embodying the spirit of anarchism
TechFlow: You mentioned the anarchist movement and felt that Algorand lacked the grassroots spirit of Ethereum. Can you elaborate on why Ethereum is more in line with the spirit of social movements? Is it because it has a greater network effect than Algorand?
Shumo Chu:
Our project is not just about technology, but more importantly, it is about cultivating a community and realizing the founder's vision. Look at Vitalik Buterin's experience. Although he studied cryptography in depth during college and worked with Canada's top cryptographers, he was ultimately attracted to Bitcoin. Not only did he participate deeply in the Bitcoin community, he also worked as an editor of Bitcoin Magazine, investing a lot of effort in it and truly practicing what he preached. But when he realized that Bitcoin could not fully realize his ideals, he founded Ethereum.
This highlights a key principle: Cryptocurrency is not just about maintaining the status quo. It is actually a profound affirmation of individual freedom that challenges traditional ways of making money and government intervention. In my career, I have witnessed various blockchain booms, including IBM's Hyperledger. But these permissioned blockchains eventually fell into obscurity, which illustrates a key point: blockchain technology is inherently opposed to central government control. It represents a social movement that advocates for maintaining individual freedom despite government intervention.
Blockchain founders like Vitalik have also discussed this aspect publicly, emphasizing that blockchain is rooted in cypherpunk ideas and is a tool for social change. Although central bank digital currencies (CBDCs) are technically feasible, they ignore the fundamental spirit of blockchain as a counter to government power.
It is this critical misunderstanding that prevents Algorand and similar projects from truly capturing the essence of the cryptocurrency movement.
Building the Ethereum Ecosystem: Coordination as the Ultimate Goal
TechFlow: Before we talked about NEBRA, you mentioned the goal of building a peer-to-peer cash system that is resistant to governments, seemingly hoping for a future with governance rather than government control. Generally speaking, Ethereum is valued for its smart contracts, which enable decentralized applications, while Bitcoin is seen as "digital gold" due to its decentralized nature, but its transaction speed is slow. Considering Ethereum's role in shaping the next generation of the Internet and finance, can you share your thoughts on both systems? In addition, despite the fact that there are many other networks to choose from, why did you choose to focus on Ethereum after leaving Algorand?
Shumo Chu:
I agree with the points you mentioned. It is true that Bitcoin exists as a store of value, but it does not have the ability to build a coordinated system. The real value of blockchain lies in its ability to help people from all over the world work together and eliminate friction between individuals in different countries. In order to do this, a strong smart contract platform is essential, and it is not enough to just transfer tokens. Ethereum performs well in this regard, and it embodies the most basic value of this industry: decentralization.
While Bitcoin may be better than Ethereum in terms of decentralization, from a practical point of view, Ethereum is the first choice for developing meaningful projects. Its combination of decentralization and widespread adoption is unmatched by any other blockchain.
We should not only focus on technical indicators such as transaction speed or network latency. Ethereum focuses more on decentralization, which is in line with the core values of the entire industry. In addition, the community is actively improving Ethereum through second-layer solutions and exploring how to expand the system without changing the underlying protocol, such as using modular data layers like Celestia.
At NEBRA, our main focus is on developing the settlement layer. Essentially, blockchain technology consists of two main functions: data publication (or data availability) and settlement. We are focusing on improving Ethereum's settlement capabilities, which is very consistent with our goals and a natural extension of our involvement.
What is NEBRA? How does NEBRA scale Ethereum?
NEBRA: The difference between settlement and data availability
TechFlow: Can you explain the difference between "settlement" and "data release" in Ethereum? It seems that data release may be the temporary storage of data, while settlement is the confirmation and recording of transaction status. What is the difference between these two processes, and what is their respective importance in the Ethereum ecosystem?
Shumo Chu:
Indeed, you already understand the core concept and no further explanation is needed. Data availability is crucial for proving state changes - it ensures that the data required to verify the state change is always accessible.
Settlement, on the other hand, focuses on the process of reaching consensus on the state of data after a transaction occurs.
Imagine starting from a specific state "A", and the smart contract specifies how the state should transition. The question then becomes: how do we verify that a transaction is correct? The ultimate solution lies in zero-knowledge proofs and verifiable computing techniques. These techniques allow us to prove the correctness of state transitions without having to re-execute those expensive state transition functions.
The computational power of Ethereum can be compared to a fifth grade calculator. This metaphor reveals the limitations we are dealing with. Our goal is to scale Ethereum in a way that preserves its decentralized and trustless nature while maintaining the underlying security guarantees. This is the main focus of our current efforts.
TechFlow: How does NEBRA balance decentralization, scalability, and security?
Shumo Chu:
At the core of our approach is the use of zero-knowledge proofs. We verify state conditions without re-executing them. To understand the significance of NEBRA’s approach, it is important to first understand concepts like ZK-EVM and ZK second-layer solutions — which use Ethereum as a settlement layer for zero-knowledge proofs. We firmly believe that zero-knowledge proof-based settlements will become mainstream in the next decade, mainly because of their many advantages. They maintain security without sacrificing decentralization and provide privacy protection. For example, one of our major customers, Worldcoin, uses our technology to provide privacy protection for its users’ identities.
We believe that proof of settlement will be one of the biggest challenges facing blockchains after solving the data availability problem. Our strategy involves recursively generating zero-knowledge proofs - either Fourier proofs or aggregating thousands of proofs. This allows all of these proofs to be aggregated into a single commit on Ethereum. As a result, the proof cost of settlement could potentially be reduced by a factor of ten or more. This is exactly what NEBRA is working on.
Recursive zero-knowledge proof generation and proof aggregation: what do they mean for supporting ZK-EVM and ZK layer-2?
TechFlow: Can you simplify the concept of “proof aggregation” for the less technically savvy? Also, please explain at which layer NEBRA operates?
Shumo Chu:
The specific concept of "proof aggregation" is not the point. The key is to understand what this proof is: it can be a concise signature, or a small piece of encrypted data that is used to prove the validity of the state transition function. The benefit of this kind of proof is that it is very short. However, the process of verifying a proof is still expensive, and it currently costs up to $50 to verify a proof on Ethereum. At NEBRA, our goal is to reduce this cost to $5 in the short term and further to 0.5 cents in the long term. Reducing costs is our core value proposition and the main reason why our service is so important.
We reduce costs without sacrificing trust. Unlike some platforms that may rely on economic games (such as the Eigen layer), our approach is based entirely on mathematics and cryptography.
Is Eigen Layer a competitor to NEBRA?
TechFlow: Do you see the Eigen layer as a competitor to NEBRA?
Shumo Chu:
Our relationship with other teams in this space is not about competition, but more about how to scale Ethereum and help developers build protocols in different ways. This topic is very layered. I don't think of us as competitors. In fact, there are areas where we can cooperate. Although these teams are all working to scale Ethereum by adding additional economic assumptions, it remains to be seen whether these strategies will work.
At NEBRA, our approach is unique. Our goal is to leverage Ethereum’s inherent security features to enable developers to do more without any strings attached. We believe this strategy is the most sustainable in the long run.
TechFlow: Given your deep background in mathematics and zero-knowledge proof research, and Eigen Layer’s focus on settlement coordination, how do you think your development paths will intersect in the future?
Shumo Chu:
The discussion of how to scale and enhance blockchain technology is a complex topic. A fundamental insight is that coordination itself is costly. Sometimes consensus mechanisms, economic security, or other forms of coordination are needed despite the high costs. The appeal of blockchain is that it can facilitate trustless transactions and reduce the friction usually associated with coordination. For example, when transferring Bitcoin, you don’t need to worry about the stability of the government; Bitcoin’s resilience even without a government shows the profound benefits of this technology.
Eigen Layer is developing a coordination layer, which I think is very valuable. However, we must admit that not all problems can be solved by zero-knowledge cryptography alone, such as the double-spending problem.
Ideally, in scenarios where zero-knowledge cryptography is applicable, the use of coordination mechanisms is minimized. Coordination is costly. Take the reinvestment mechanism of Eigen Layer as an example: participants reinvest their ETH to earn returns. But we have to think about the source of these returns, which come from the income of the protocol deployed on Eigen Layer. As the investment amount increases to billions, the required returns will also increase, and if this is not sustainable, participants may withdraw their investment. Therefore, if a protocol must use a coordination mechanism, it should only be used when absolutely necessary.
If more efficient techniques such as zero-knowledge techniques can be utilized, then this approach should be prioritized. This discussion is very in-depth. The Eigen Layer provides great value, but it is also important to avoid coordination as much as possible and rely entirely on cryptographic solutions.
TechFlow: Now I understand, it seems that we need to use both coordination and cryptographic proofs. Can you elaborate?
Shumo Chu:
Systems should avoid using coordination as much as possible; we should try not to introduce additional layers of coordination.
NEBRA’s broad user base: zero-knowledge rollups, zero-knowledge applications, data availability layers, zero-knowledge coprocessors
TechFlow: Can you elaborate on the scenarios where zero-knowledge proofs are used and who are the potential customers of NEBRA that can streamline operations without the coordination process?
Shumo Chu:
To put it bluntly, our potential customer base is very broad. Specifically:
First, ZK rollups. We can significantly reduce their proof storage costs, by about an order of magnitude.
Second, ZK applications, such as Worldcoin, and especially those working on building privacy-preserving digital identities, will benefit greatly.
The third category is various infrastructure projects, such as the data availability (DA) layer. Such projects often need to publish proofs on Ethereum, and we can help them reduce the related costs.
The fourth category is the so-called ZK coprocessor. Among our current partners, ZK coprocessors such as Lagrange and Brabus are listed. In the future, the use of ZK coprocessors and ZK virtual machines may become more widespread.
We see ourselves as a general purpose protocol for anyone looking to do settlement on a ZK-proof based chain, which makes NEBRA an even more ideal choice.
We expect that over the next three to five years, there will be increasing optimization of on-chain operations.
TechFlow: NEBRA's goal is to use ZK proofs to create a universal settlement layer. But you mentioned that the Eigen Layer is used in scenarios that require coordination, and this cost is reasonable. Can you clarify under what circumstances a project may only need ZK proofs and not Eigen Layer, and when both may be necessary?
Shumo Chu:
This topic touches on the subtleties of computer science, specifically regarding the concept of "primitiveness" in computational frameworks. The basic principle is that if a process can be fully described in mathematical language, then zero-knowledge proofs apply. However, certain problems, such as double spending, fundamentally require consensus mechanisms, which are a form of coordination.
We need to distinguish between specific coordination mechanisms, such as Eigen Layer's approach, and other approaches to consensus. For example, shared sequence protocols such as Espresso or Astra, or custom consensus algorithms developed by Celestia, are alternatives to Eigen Layer. When discussing data availability, Eigen Layer provides a solution, but platforms like Celestia pursue their own unique consensus-based strategies.
The discussion should not just be about NEBRA vs. Eigen Layer. Rather, it should focus on when coordination is needed and when it can be avoided. Coordination through consensus mechanisms is critical to preventing double spending, ensuring strong proof guarantees, and maintaining censorship resistance. The definition of censorship resistance is inherently subjective and involves whether information can be included or excluded.
Given that Ethereum already provides a strong consensus layer, I advocate leveraging Ethereum to handle coordination tasks. By adding ZK proofs on top of Ethereum, we can create more efficient systems. The philosophy of NEBRA is to leverage Ethereum's existing infrastructure - the result of years of community effort and development - to enhance security and functionality, rather than creating a redundant coordination layer. Our goal is to innovate within Ethereum's existing framework and build more complex systems using ZK proofs without the need for additional coordination mechanisms.
The Challenges of Zero-Knowledge Proofs as a Scaling Solution
TechFlow: What are the main challenges in reducing the settlement costs of zero-knowledge proofs tenfold or even a hundredfold in the future?
Shumo Chu:
The challenges of reducing costs are many, but they can be mainly divided into several aspects.
First, there are challenges in cryptography. Zero-knowledge proofs are relatively expensive, and although we have made great progress in technology over the past decade, the development of zero-knowledge is still in its early stages. We still have a lot of work to do and a lot of room for improvement.
Second, from the perspective of application developers and users, adopting zero-knowledge technology is more complicated than not adopting it. You can see that platforms like Arbitrum and Optimism are able to build and deploy optimistic rollups faster than teams doing ZK rollups. However, I firmly believe that the adoption of zero-knowledge technology will accelerate, which will increase the speed of development. I believe that in the future, it will be simpler to build with zero-knowledge than with traditional technology, even though our proof system is inherently difficult to design. This is the second major challenge.
The third challenge is market education. Since we are still early in the zero-knowledge space, many people do not understand the benefits of using zero-knowledge. For example, users may not initially care about what the underlying technology is. It is critical to educate developers about zero-knowledge technology and tell them why this technology exists and why they should use it to bring more scalable solutions to Ethereum and other blockchains. These are the three major challenges in my opinion.
TechFlow: Given the research, adoption, and engineering challenges, how do you address them all simultaneously? Beyond your competitors, you emphasize that NEBRA focuses on pure technology and mathematics, while others focus on consensus. What entities in the industry are doing similar work to NEBRA?
Shumo Chu:
We have no direct competitors, but the closest thing to our work is Polygon's Aggregation Layer (AG layer). We are both working on perfecting aggregation technology, and while we take different perspectives, there are some similarities in using mathematical aggregation proofs and scaling blockchain technology. However, there are also some key differences between us.
First of all, Polygon's AG layer mainly serves the Polygon ecosystem, but the application of zero-knowledge technology goes far beyond that. There are many ZK rollups and ZK virtual machines outside the Polygon ecosystem, such as Score, Caseync, Stackware, Zero, and Sync SP. Our goal is to create a unified layer, which may also include cooperation with Polygon's AG layer. This allows us to work from a more neutral position, and because of our neutrality and lack of dependence on Polygon, we are able to work with a wider range of partners. This is one of our main differences.
The second difference is our focus. Polygon's AG layer focuses on ZK rollups, while our focus extends beyond ZK rollups to ZK applications. We already have some large ZK applications as our customers, such as Worldcoin, which shows that we have a wider range of applications than Polygon's AG layer.
While there are some other minor differences in technology and performance metrics like speed and ubiquity, those distinctions may become less important in the big picture. Fundamentally, it is our broader scope and neutral stance that sets us apart.
TechFlow: What are the advantages of your multi-layer zero-knowledge settlement solution compared to existing cross-chain bridge solutions?
Shumo Chu:
The core problem is that existing bridge solutions rely on insecure cryptographic primitives like multi-signature, which is basically putting all your funds in the control of five people you know nothing about. If they decide to collude, you could lose everything. So the fundamental problem with bridges is that their security assumptions are highly questionable.
In the long term, our goal is to introduce trustless bridging technology to the industry. However, this is not our current focus. Currently, we are mainly focused on the settlement side. Bridging is just one way to transfer funds, and our goal is to achieve cost-free interoperability and effectively reduce settlement costs.
NEBRA 与 Roll-up-as-a-Service
TechFlow: As more and more applications launch their own chains, you, as an expert focused on expansion, must have unique insights into this development. Can you share the benefits and considerations of launching a chain specifically for an application?
Shumo Chu:
This is a very good question and I would love to share my thoughts.
When considering whether to launch a blockchain for your own application, it is critical to understand the trade-offs involved. One major advantage of launching your own chain is the ability to earn serialization revenue or miner extractable value (MEV), which directly generates revenue for your protocol. For example, if I launch a DeFi application on my own blockchain, all MEV will become revenue for the protocol. These revenues can be distributed to the founding team, token holders, etc., significantly driving the development of the project. This is a pretty straightforward choice.
On the other hand, launching an application provides composability, which greatly improves the user experience. If you are not on your own chain, users usually need to use a bridge when they want to interact with other applications or use DeFi components - this, as I mentioned before, makes me very uncomfortable because of security issues and ultimately makes the user experience worse.
This is a fundamental trade-off. But things may change with the development of shared settlement layers like NEBRA, which can make the bridging experience much smoother. While it may not be as seamless as operating on a single chain, it represents a significant improvement.
In the past, most people chose to develop applications due to the complexity of launching a blockchain. But with the emergence of service providers like AltLayer, Gelato, Kadera, and Conduit making the process easier, we may see more people choose to launch their own chains. I would not be surprised if there are thousands of ZK rollups by the end of this year.
As NEBRA, our mission is to support this transition by making it easier and more cost-effective to launch your own chain, with the goal of increasing interoperability and efficiency.
Additional discussion on scaling solutions: Is sharding obsolete?
TechFlow: You mentioned that Ethereum may face an existential crisis with the emergence of numerous Layer 2 solutions, which may affect the composability of the network. Some people support sharding rather than Layer 2. What do you think about this?
Shumo Chu:
The argument that the blockchain ecosystem has become too fragmented due to the launch of multiple Layer 2 solutions is not entirely correct, but there is some truth in it. It is true that the ecosystem has become more diverse as more Layer 2 solutions are introduced. But through technologies like NEBRA, we can expect to achieve almost the same level of interoperability in the long run.
A key point of contention is the effectiveness of sharding. Early on, people like Vitalik Buterin and Carl Beekhuizen, now co-founder of Optimism, proposed a sharding solution called Plasma. Despite high expectations, Plasma ultimately failed to work as expected, which prompted the community to look to other scaling solutions, especially rollups. Although rollups have their challenges, I firmly believe that they are the right direction forward. We should focus on developing better protocols to integrate Layer 2 solutions, rather than redesigning sharding mechanisms that have not been successful in the past.
Take, for example, Polkadot’s approach to sharding. Observing the current state of Polkadot can provide some valuable insights. While criticisms of Layer 2 solutions may have some merit, dismissing them outright ignores the fact that we are unlikely to find more efficient alternatives.
More reading:
https://www.nebra.one/
https://gelato.network/blog/what-are-zero-knowledge-zk-evms
https://lu.ma/ovsa2xjy?pk=g-z28jvuqWEZn3Ft4