Key Points
Validiums are scaling solutions for Ethereum that process off-chain transactions and use zero-knowledge proofs (ZKP) to guarantee their validity.
Validiums enable efficient transaction processing through operators that pool and validate transactions, reducing on-chain data storage and gas fees.
Although they provide advantages such as greater speed and privacy in transactions, validiums also face challenges, such as data availability risks and possible centralization issues.
Introduction
Over the years, blockchain technology has improved significantly, but scalability remains one of the main issues. In this article, we will explore what validiums are, how they work, and how they can improve Ethereum's scalability.
What are validiums?
Validiums are scaling solutions for Ethereum that use off-chain computation and data availability to process transactions more efficiently. Unlike zero-knowledge rollups (zk-rollups), which store some data on-chain, validiums keep transactions off-chain. chain while using zero-knowledge proofs (ZKP) to verify their validity.
How do validiums work?
Validiums operate by executing transactions outside of Ethereum's mainnet and utilize smart contracts on Ethereum to ensure their validity and integrity. Let's look at some of the main aspects of validiums.
Transactions
When a user wants to make a transaction using a validium, he sends it to a trader. Operators are nodes responsible for executing transactions on the validium network. They can be a single entity or a group of entities chosen through a Proof of Stake (PoS) system.
The operator collects transactions in a batch and processes them off-chain. Once the batch is ready, the operator uses a special system called a preflight circuit to create proof that the transactions were carried out correctly.
State commitments
Imagine the state of the validium (the record of all accounts and their balances) as a large tree, known as a Merkle tree or Merkle tree. The root of this tree, called the state root, is like a fingerprint that represents the state of the system in its entirety. This state root is stored on Ethereum.
When the operator processes transactions, it updates the state root to reflect the new account balances and states. They then send this new root state along with proof that everything was done correctly to the Ethereum mainnet.
Unlike zk-rollups, block producers in a validium do not need to publish all transaction details on Ethereum. If Ethereum verifies the proof, the new state is accepted and the validium is updated.
Deposits and withdrawals
Users can deposit their Ethereum funds into a validium by sending ETH or other tokens to a special contract on Ethereum. The contract communicates 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 a batch, and after the batch is verified on Ethereum, users can withdraw their funds.
Validiums and EVM compatibility
Simple applications
Validiums are efficient for simple applications such as token swaps and payments as they can quickly process many transactions without needing to store all the data on the Ethereum mainnet. This makes them ideal for applications where transactions are simple and do not require complex calculations.
Challenges with smart contracts
Smart contracts are programs that run on the blockchain and often involve complex operations. Validiums face difficulties with these operations, as proving that complex operations were performed correctly requires more computational power. This makes it more difficult for validiums to support the wide range of functionality that smart contracts can offer.
Potential solutions
Some projects are working on ways to make validiums more compatible with Ethereum's smart contract capabilities. One approach is to create special versions of programming languages like Solidity (used to write smart contracts on Ethereum) that are optimized for validiums. However, this can be limiting as it may not support all the features of the standard Ethereum programming environment.
Benefits of validiums
Efficiency
Validiums can process up to 9,000 transactions per second (TPS) by offloading data storage and computational demand from the Ethereum mainnet. This is crucial for applications like decentralized exchanges (DEXs), where speed and cost-effectiveness are important.
Cost reduction
Validiums can significantly reduce gas fees by not publishing transaction data on-chain, allowing users to benefit from lower transaction costs.
Enhanced security
By storing data off-chain, validiums can offer greater privacy for transactions and an additional layer of security without compromising scalability.
Challenges of validiums
Data Availability Risks
Validiums depend on the availability of off-chain data and this also introduces risks. If operators or data availability managers withhold transaction data, it may be impossible to generate the evidence needed to withdraw users' funds.
Centralization risks
The need for specialized hardware to produce validity proofs can lead to centralization. If only a few entities are able to afford the necessary resources, they could dominate the network, compromising its decentralized nature.
Final considerations
Validiums are scalability solutions designed to enhance the Ethereum network by processing off-chain transactions and ensuring transaction integrity through zero-knowledge proofs (ZKP). By addressing the limitations of on-chain data storage, validiums can improve transaction throughput, marking an important step towards solving the blockchain scalability problem.
Further reading
What is ZkEVM and how can it improve the Ethereum ecosystem?
Optimistic Rollups vs. Zero-Knowledge Rollups: what are the differences?
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