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Scalability Challenges in Web3 Development

For years, web3 developers have faced challenges in making their systems scalable. Initially, new technologies tend to launch in a monolithic fashion, where everything is included in a single stack. However, as these technologies mature, specialization and optimization of different aspects of the stack become crucial for enhancing scalability.

The Shift Towards Modular Blockchains

This trend is now evident in blockchain technology. Each layer in the stack is being optimized in a modular fashion, enabling web3 developers to adopt these modular solutions to reduce costs and improve efficiency. For example, execution is increasingly handled by L2s like Arbitrum and Optimism, which offer higher throughput and lower fees compared to Ethereum’s L1. Similarly, the data availability layer is being optimized by modular projects such as Celestia and EigenDA.

Specialization and Optimization

As the web3 ecosystem matures, it is becoming clear that the future lies in specialization and optimization at each layer of the stack. Allowing specialized teams to perfect different components of the stack can achieve levels of scalability and cost-efficiency that were previously unattainable with monolithic designs.

ZK-Rollups: The Key to Blockchain Scalability

The journey to scalability becomes clearer with the rise of ZK-based technologies like zero-knowledge rollups (ZK-rollups). ZK-rollups have emerged as an optimal scaling solution because they use zero-knowledge proofs (ZKPs) to validate transactions without revealing sensitive information. More importantly, they can validate transactions faster and with minimal gas fees.

With a ZK-rollup L2 chain, many transactions are batched together on the L2 and then sent to the L1 as a single transaction. This aggregated transaction also contains cryptographic proof, which can efficiently verify the entire batch.

ZK-rollups submit the batched transaction along with state data to the underlying L1 for verification, ensuring all transactions are valid while providing immediate finality.

Challenges in Proof Verification

Currently, the biggest challenge for ZK-systems is the efficient verification and settlement of ZKPs. “Proof verification” is a crucial step to ensure a ZKP is cryptographically valid, required for ZK-rollups to settle transactions on the L1.

Unlike optimistic rollups, which rely on fraud proofs and have a challenge period of up to seven days, ZK-rollups offer immediate finality. This significantly increases transaction throughput and maintains stronger security guarantees without a lengthy challenge period.

Modular ZKP Verification: A Solution

Modularity can extend beyond the base layer. Just as Celestia handles data availability on a dedicated blockchain, a standalone chain can manage the proof verification process for ZK-rollups. This approach allows ZK-rollups to focus on execution and user experience, while an independent chain handles proof verification in parallel.

This method reduces costs by more than 90% and makes them more stable over time. Instead of depending on volatile Ethereum gas prices, ZK-rollups can offload proof verification to another layer, avoiding these fluctuations.

Moreover, this modular proof verification layer can integrate the latest cryptographic innovations quickly, bypassing the constraints of Ethereum L1. This means innovations can be implemented within weeks instead of years.

Broader Applications of Modular Proof Verification

Modular proof verification can be applied to other ZK technologies, including any dApp relying on zero-knowledge proofs. By standardizing the most expensive step in building systems using ZKPs, all blockchains can benefit, moving us closer to a scalable and interoperable future.

Future of Web3 Without Modularity

If we consider the projected growth of web3, the cost of proof verification for ZK-rollups is expected to skyrocket. It’s estimated that $47 million was spent on proof verification for ZK-rollups on Ethereum in 2023. By 2028, the market could be worth $1.5 billion or more, and by 2030, decentralized applications alone could generate 90 billion proofs.

Without innovation in proof verification, scaling ZK technology to a billion users will be extremely challenging. Modular proof verification can reduce the cost of verifying a single proof from around $20 to approximately $1.80, unlocking new frontiers of innovation in web3.

As more zero-knowledge proofs are generated, they will also need verification. Adopting a modular approach to ZKPs is a logical step as the web3 landscape becomes more modular.

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