: ZK Rollups are helping to make Ethereum’s decentralized vision a reality.

• Zero-knowledge (ZK) technology is a cryptographic tool that allows blockchain networks to prove the authenticity of their operations in the most efficient way.
• ZK tech is expected to revolutionize sectors from gaming to payments, and from digital identity to enterprise solutions.
• ZK rollups and zkEVMs are bringing Ethereum’s vision of a decentralized web into focus.

In 2015, the Ethereum protocol proposed a vision for a decentralized world computer capable of rearchitecting a free and open internet – removed from the whims and constraints of centralized entities. With the goal of realizing its full potential, Ethereum has been the foundation for the development of Web3. Among the most promising solutions to scale the network for mass adoption are systems using zero-knowledge (ZK) technologies.

ZK tech is an innovative cryptographic tool that allows blockchain networks to prove the authenticity of their operations, using the fewest possible steps, all while reducing costs, increasing throughput capacity, and expanding potential use cases far beyond what is currently possible. The advantages of ZK technology have not gone unnoticed, with many industry participants projecting that it would take more than a decade to build a performant, EVM-compatible ZK rollup. Fortunately, it took considerably less time than that.

The Ethereum Merge in 2022 was instrumental in transitioning the network from proof-of-work (PoW) to the more efficient proof-of-stake (PoS), and the development of ZK tech is a part of Ethereum’s longer-term vision. In order to truly trust the outputs of a ZK-powered tool, source-available code for every component is required to verify its inputs. This, in turn, will allow the application of ZK tech to be transformational for Web3 development.

Given the potential of ZK technology, it is expected to revolutionize myriad sectors, from gaming to payments, and from digital identity to enterprise solutions. In the payments industry, for example, ZK’s ability to increase throughput and security, while reducing fees, could take DeFi and consumer payments to the next level. Similarly, for blockchain gaming applications to match the volume of users seen in the mainstream gaming sector, ZK rollups will be essential for processing the hundreds of thousands, if not millions, of micro-transactions that a typical blockchain game would require.

In addition, enterprise users have been wary of the security issues presented by decentralized networks and their perceived lack of oversight and accountability. Zero-knowledge technology is the very thing that will deliver accountability to decentralized networks without submitting to arbitrary oversight. Its implementation will provide the kind of security that enterprises need to interact with decentralized blockchains, while also being applied to digital identity, providing a decentralized, privacy-first means for users to verify their credentials and identity without ever revealing personal information.

In response to the collapse of the FTX exchange, Vitalik proposed a ZK-based solution for preventing future FTXs. A cryptocurrency exchange could use Zero-Knowledge proofs to demonstrate solvency by publishing a proof of reserves. This would allow an exchange to confirm it has the liquidity to cover customer withdrawals without revealing the sensitive business information contained therein.

The potential of ZK technology is vast, and with its ability to increase throughput and security, reduce fees, and expand potential use cases, its adoption is likely to be widespread. This is especially true as the development and application of ZK tech adheres to the core ideals of Web3, with transparency chief among them. With its growing potential, 2023 promises to be the year ZK tech truly starts to take off.