Zero-knowledge modularity can help to scale web3

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For years, web3 developers have been struggling to make their systems scalable. When new technologies come onto the scene, they often start out as monolithic, with everything in a single stack. However, as these technologies mature, they become more specialized, with different companies developing different aspects of the stack to increase scalability.

This is now happening with blockchains. Each layer in the stack is optimized in a modular manner, and web3 developers are adopting these modular solutions to reduce costs and increase the efficiency and sustainability of their systems.

For example, execution is increasingly being handled by L2s like Arbitrum and Optimism, which provide much higher throughput and lower fees than execution on Ethereum’s L1. Similarly, the data availability layer is being optimized by modular projects like Celestia and EigenDA.

As the Web3 ecosystem matures, it’s becoming increasingly clear that the future lies in specialization and optimization at every layer of the stack. By allowing expert teams to perfect different components of the stack, we can achieve levels of scalability and cost-effectiveness that simply aren’t possible with monolithic designs.

ZK-rollups as the end game for blockchain scalability

When you factor in the rise of ZK-based technologies like zero-knowledge aggregates, the journey to scalability really starts to become clear.

ZK-rollups have emerged as the optimal scaling solution for blockchains because they use zero-knowledge proofs (ZKPs) to verify transactions without exposing sensitive information, but most importantly, if built with the right tools, they can verify transactions faster and with minimal gas fees. A perfect example of this is zkVerify, a tool we built for exactly this purpose.

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

ZKPs are expensive and computationally intensive

Currently, the biggest hurdle for ZK systems is to efficiently verify and place ZKPs. “Proof verification” is a necessary step to ensure that a ZKP is cryptographically valid and is required for ZK aggregates to place transactions in L1.

Optimistic rollups do not require proof verification because they rely on a different proof system called proofs of fraud. All transactions are assumed to be valid by default, and to ensure security, there is a challenge period where anyone can provide proof of fraud if they detect invalid transactions. However, the challenge period can last up to seven days, which slows down the finality of transactions. Despite this drawback, optimistic rollups have become the most popular blockchain scaling solution today.

On the other hand, ZK-aggregates send the aggregate transaction along with the state data to the underlying L1 for verification. L1 verifies the chain of evidence and updates the state of the aggregate, ensuring that all transactions are valid and provide instant finality. This approach significantly increases transaction throughput and maintains stronger security guarantees without the need for a long challenge period.

Modular ZKP verification is the solution

Fortunately, modularity can extend beyond the base layer. The same modular approach that significantly improves L1 chains like Ethereum can also be applied to ZK-rollups.

How does this work in practice? Similar to how Celestia handles data availability on a private blockchain, a standalone chain can handle the proof-of-stake verification process for ZK-aggregates (and, in general, all systems based on ZKPs) while still being able to resolve those aggregates on the main L1 chain.

By outsourcing proof verification to a modular provider, ZK-rollups can focus solely on execution and user experience. The proof verification chain runs in parallel with the ZK-rollup while remaining an independent chain.

This approach reduces costs by over 90% and makes it more stable over time. Instead of a cost structure tied to Ethereum (ETH) gas prices (which can be volatile and unpredictable), ZK-rollups can offload proof-of-concept verification to another layer without these fluctuations.

Additionally, this modular proof-of-proof layer can be updated beyond the current limits of Ethereum L1, which has certain restrictions on the types of precompilations you can use. Simply put, this means that a modular proof-of-proof service can integrate the latest cryptographic innovations in a matter of weeks, whereas these updates may take years to become available on Ethereum.

Modular proof-of-concept verification can also be applied to other ZK technologies, including any dApp that relies on zero-knowledge proofs. That’s the beauty of a modular solution: it can be used in any system that needs it.

By standardizing the most expensive step in building systems using ZKP, all blockchains can benefit from it and we can move one step closer to a scalable and interoperable future.

So what happens if there is no modularity?

Looking at the projected growth of web3 in the coming years, the cost of proof verification for ZK-rollups is expected to increase rapidly.

At Horizen Labs, we estimate that $47 million will be spent on proof-of-proof for ZK-rollups on Ethereum in 2023, and the entire proof-of-proof market is projected to be worth $1.5 billion or more by 2028. By 2030, it is estimated that 90 billion proofs will be generated by decentralized applications alone.

The most expensive step in ZK-rollup, proof verification, must be renewed, otherwise it will be extremely difficult for ZK technology to scale to a billion users. There is no reason for ZK-rollups and ZK-based applications to incur such expense, and we should not place unnecessary demands on blockchains that hinder their development.

With modular proof verification, the cost of verifying a single proof can drop from around $20 (considering the Groth16 proof scheme, a gas price of 30 gwei, and an Ethereum price of $3000) to around $1.80. These tremendous cost savings will unlock new frontiers of innovation in web3, including new ZK applications, Bitcoin ZK aggregates, proof systems, and more. Any ZK-based chain or application can benefit from delegating proof verification to a modular solution.

As more zero-knowledge proofs are produced in Web3, these proofs will also need to be verified. And as the entire Web3 landscape becomes more modular, it makes sense to apply this approach to ZKPs as well.

Rob Viglione

Rob Viglione is the co-founder and CEO of Horizen Labs, the development studio behind leading web3 projects such as zkVerify, Horizen, and ApeChain. Rob served several years in the U.S. Air Force and was deployed to Afghanistan, where he supported intelligence efforts for the Special Operations Task Force. During this time, he developed an early interest in Bitcoin, recognizing its potential benefits for countries with unstable economies. Rob is deeply interested in web3 scalability, blockchain efficiency, and zero-knowledge proofs. His work focuses on developing innovative solutions for zk-rollups to increase scalability, create cost savings, and improve efficiency. He holds a PhD in finance, an MBA in finance and marketing, and a BS in physics and applied mathematics. Rob currently serves on the Board of Directors of the Puerto Rico Blockchain Trade Association.