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ETH Amsterdam - Scaling Ethereum

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ETH Amsterdam - Scaling Ethereum

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The current Ethereum network only creates a new block every 12 to 14 seconds. The growing user base increasingly strains the network leading to rising transaction fees.

Various new techniques have been created to alleviate this strain on the network. In this talk, we will compare two prominent strategies for scaling Ethereum:

1. Sidechains implement a separate blockchain with lower transaction costs allowing payments to be run separately from the main Ethereum network.

2. In contrast, Optimistic rollups sit on top of Ethereum and process bundles of transactions off-chain in a different environment.

The current Ethereum network only creates a new block every 12 to 14 seconds. The growing user base increasingly strains the network leading to rising transaction fees.

Various new techniques have been created to alleviate this strain on the network. In this talk, we will compare two prominent strategies for scaling Ethereum:

1. Sidechains implement a separate blockchain with lower transaction costs allowing payments to be run separately from the main Ethereum network.

2. In contrast, Optimistic rollups sit on top of Ethereum and process bundles of transactions off-chain in a different environment.

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ETH Amsterdam - Scaling Ethereum

  1. 1. Scaling Ethereum Sidechains, ZK-Proofs, and Optimistic Rollups Anthony Campolo QuickNode Developer Advocate
  2. 2. Problem The Ethereum network creates a new block every 12 to 14 seconds
  3. 3. Vitalik Buterin Scalability, Part 1: Building on Top (2014)
  4. 4. Joseph Poon, Thaddeus Dryja Bitcoin Lightning Network (2015)
  5. 5. Joseph Poon, Vitalik Buterin Plasma: Scalable Autonomous Smart Contracts (2017) Plasma is a proposed framework for incentivized and enforced execution of smart contracts, scalable to a significant amount of state updates per second (potentially billions)… …enabling the blockchain to be able to represent a significant amount of decentralized financial applications worldwide.
  6. 6. I - Plasma ● Child chain and root chain communication/arbitration secured by fraud proofs ● Each child chain has its own mechanisms for validating blocks ● Particular fraud proofs can be built on different consensus algorithms Joseph Poon, Vitalik Buterin Plasma: Scalable Autonomous Smart Contracts (2017)
  7. 7. I - Plasma Pros and Cons Pros ✅ ● Layer 2 operations enable lower fees and faster computation ● Reduces amount of necessary data processing on Layer 1 ● Compatible with Layer 1 scaling solutions like sharding Cons ❌ ● Paper sketches a system more than an implementation, leading to multiple implementations (Plasma MVP, Cash, and Debit) ● Funds can only be withdrawn after lengthy waiting period
  8. 8. II - Sidechains ● Separate Layer 2 chains operating independently and running in parallel to Layer 1 (Ethereum Mainnet), connected by a two-way bridge. ● Has own consensus algorithm and block parameters. Vaibhav Saini Difference between SideChains and State Channels (2018)
  9. 9. II - Sidechains Pros and Cons Pros ✅ ● Established technology ● Supports general computation Cons ❌ ● Less decentralized ● Separate consensus mechanism not secured by Layer 1 ● Quorum of validators can commit fraud
  10. 10. II - Sidechain Implementation - Polygon ● Clone of Layer 1 chain that supports transferring assets to and from Layer 1 to Layer 2. ● Layer 2 is a new blockchain with its own consensus mechanism for creating blocks. Polygon Lightpaper (2021)
  11. 11. III - ZK-Rollups ● Layer 2 scaling solution in which all funds are held by a smart contract on the Layer 1 chain, while computation and storage are performed off-chain. ● For every Rollup block, a state transition zero-knowledge proof is generated and verified by the Layer 1 chain contract. ● Mass transfer processing of hundreds of transfers is rolled into a single transaction Xavier Salleras, Vanesa Daza Zero-Knowledge Proofs in Embedded Systems (2021)
  12. 12. III - ZK-Rollups Pros and Cons Pros ✅ ● Reduced fees per user transfer ● Less data contained in each transaction ● Does not require a fraud game verification Cons ❌ ● Computing zero knowledge proofs requires data optimization for maximum throughput ● Security scheme assumes a level of unverifiable trust
  13. 13. IV - Optimistic Rollups ● ZK-Rollups prove to Ethereum that transactions are valid ● In contrast, Optimistic Rollups assume the transactions are valid and leave room for others to prove fraud. Sam Richards, Corwin Smith Optimistic Rollups (2022)
  14. 14. IV - Optimistic Rollups Pros and Cons Pros ✅ ● EVM and Solidity compatible ● More flexible than ZK-Rollups ● Data is available and secured on-chain Cons ❌ ● Limited throughput compared to ZK Rollups ● Requires both an honest majority of Ethereum validators and at least one aggregator that does not censor transactions
  15. 15. IV - Optimistic Rollup Implementation #1 - Arbitrum ● Alice and Bob will engage in a back- and-forth protocol, refereed by an L1 contract, to resolve their dispute with minimal work required from any L1 contract. ● Arbitrum's approach is based on dissection of the dispute. Arbitrum White Paper (2018)
  16. 16. IV - Optimistic Rollup Implementation #2 - Optimism ● State commitments published to Layer 1 without direct proof of commitment validity. Considered pending for a period of time, a "challenge window”. ● If proposed state commitment goes unchallenged for duration of challenge window (7 days), it’s considered final. ● Once commitment considered final, Layer 1 smart contracts safely accept proofs based on commitment. Paradigm Research How does Optimism’s Rollup work? (2021)
  17. 17. Citations Scalability (2014), V. Buterin blog.ethereum.org/2014/09/17/scalability-part-1-building-top/ Bitcoin Lightning Network (2015), J. Poon, T. Dryja lightning.network/lightning-network-paper.pdf Plasma (2017), J. Poon, V. Buterin plasma.io/plasma.pdf Sidechains and State Channels (2018), V. Saini hackernoon.com/difference-between-sidechains-and-state- channels-2f5dfbd10707 Polygon (2021) polygon.technology/lightpaper-polygon.pdf ZK Proofs in Embedded Systems (2021), X. Salleras, V. Daza eprint.iacr.org/2021/1382 Optimistic Rollups (2022), S. Richards, C. Smith ethereum.org/en/developers/docs/scaling/optimistic-rollups/ Arbitrum (2018) usenix.org/system/files/conference/usenixsecurity18/sec18- kalodner.pdf How does Optimism’s Rollup work? (2021), Paradigm Research research.paradigm.xyz/optimism
  18. 18. QuickNode Home Page quicknode.com Twitter twitter.com/QuickNode Events lu.ma/QuickNode Apr 25 7:30 lu.ma/qnxbuildspace Jobs jobs.lever.co/quicknode Discord discord.gg/f2jmEtmSWY
  19. 19. Slides https://www.slideshare.net/ AnthonyCampolo/eth-amsterdam- scaling-ethereum/

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