main ideas

  • Validiums are scaling solutions for the Ethereum chain that process transactions off-chain using zero-knowledge proofs to ensure their authenticity.

  • Validiums enable efficient transaction processing by leveraging operators to aggregate and audit transactions, reducing on-chain data storage and processing fees.

  • While offering advantages such as faster transactions and improved privacy, Validiums also face some challenges such as data availability risks and potential concerns of centralization.

the introduction

Blockchain technology has improved greatly over the years, but scalability has remained one of the major issues. In this article, we will explore Validiums solutions, how they work, and how they can help overcome the scalability problem on the Ethereum chain.

What are Validiums?

Validiums are scaling solutions for the Ethereum chain that use data availability and off-chain computing to process transactions more efficiently. Unlike zero-knowledge aggregators that store some data on-chain, Validiums keep transactions off-chain while using zero-knowledge proofs (ZKP) to validate them.

How do Validiums work?

Validiums work by executing transactions outside of the Ethereum mainnet, leveraging Ethereum's smart contracts to ensure their authenticity and integrity. Let's review some of the key aspects of Validiums' solutions.

Transactions

When a user wants to make a transaction using the Validium solution, they send it to one of the operators, i.e. the nodes responsible for executing transactions on the Validium chain, and can be a single entity or a group of entities chosen through the Proof of Stake (PoS) system.

The operator groups the transactions into a batch and processes them off-chain, and once the batch is ready, the operator uses a special system called a proof circle to create proof that the transactions were executed correctly.

Status Obligations

Imagine the state of Validium (the record of all accounts and their balances) as a large tree known as a Merkle tree, and the root of this tree, called the state root, is like a fingerprint representing the entire state, and this state root is stored on Ethereum.

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

Unlike zero-knowledge aggregators, block producers in Validium do not need to publish all transaction details to Ethereum, and when Ethereum verifies the proof, the new state is accepted and the Validium solution is updated.

Deposit and Withdrawal Operations

Users can deposit their funds from Ethereum to Validium by sending ETH or other tokens to a private contract on Ethereum, and the contract sends this deposit to Validium off-chain and credits it to the user's off-chain account.

When withdrawing funds to Ethereum, users submit a withdrawal request to the operator, the operator includes the request in a payment, and once the payment is verified on Ethereum, users can withdraw their funds.

Validiums and their compatibility with the Ethereum Virtual Machine (EVM)

Simple uses

Validiums solutions are effective for simple uses such as token exchanges and payments, as they can process many transactions quickly without having to store all the data on the Ethereum mainnet, making them ideal for uses where transactions are straightforward and do not require complex calculations.

Challenges with Smart Contracts

Smart contracts are programs that run on the blockchain and often involve complex operations, and Validiums solutions are difficult to handle because proving that complex operations were performed correctly requires a greater amount of computing power, making it difficult for Validiums to support the wide range of functionality that smart contracts can provide.

Possible solutions

Some projects are working on ways to make Validiums more compatible with Ethereum's smart contract capabilities, one way is to create special versions of programming languages ​​like Solidity (used to write Ethereum smart contracts) that are optimized for Validiums solutions, but this can be a bit limiting as it may not support all the features of the regular Ethereum programming environment.

Advantages of Validiums

Efficiency

Validiums solutions can process up to 9,000 transactions per second (TPS) by offloading data storage and computation from the Ethereum mainnet, which is critical for applications like decentralized exchanges (DEXes) where speed and cost-effectiveness are critical.

Reduce cost

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

Enhance security

With off-chain data storage, Validiums can provide enhanced transaction privacy and an additional layer of security without compromising scalability.

Validiums Challenges

Data availability risks

Validium's reliance on off-chain data availability also carries some risks, as if operators or data availability managers withhold transaction data, it may not be possible to generate the proof needed to withdraw user funds.

Centralization risks

The need for specialized hardware to produce health proofs can lead to centralization, and if only a few entities can afford the necessary resources, they may dominate the network, undermining its decentralized nature.

Closing thoughts

Validiums are scalability solutions designed to improve the Ethereum network by processing off-chain transactions while ensuring transaction integrity through zero-knowledge proofs. By addressing the limitations of on-chain data storage, Validiums solutions can improve transaction throughput, representing an important step towards solving the blockchain scalability problem.

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