L1 Interop: A Path To Scaling Ethereum’s Liquidity
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ZKsync Blog > Introducing the Elastic Chain...
Published Jul 2, 2024
Introducing the Elastic Chain
TLDR: Today, ZKsync unveils the Elastic Chain — an ever-expanding network of ZK rollups, secured by math and natively interoperable under a uniform, intuitive UX. Ethereum’s rollup-centric roadmap successfully reduced transaction fees, but fragmented liquidity and user experience. The recent ZKsync 3.0 upgrade solves this by enabling native, trustless, low-cost interoperability between the chains powered by ZK Stack, Ethereum’s most performant ZK rollup framework.
Introduction
The ZKsync 3.0 protocol upgrade, released on June 7, 2024, marks a historic transformation for ZKsync. This upgrade, the most complex to date, reconfigures the ZKsync L1 bridge into a shared router contract to support the expanding network of interoperable ZK Chains. ZKsync Era, the first chain of the ecosystem, will soon be joined by more than 20 new ZK Chains currently being built on the ZK Stack and planning to launch in 2024.
ZKsync 3.0 thus transforms from a single Ethereum L2 into The Elastic Chain. This vision, first introduced as “Bridgeless Hyperchains” at SmartCon 2022 and further elaborated in the “Introduction to ZK Chains” post, is now becoming reality.
This post outlines the problem with scaling today, recaps the Elastic Chain vision, and offers a comparative overview of the existing landscape of chain-of-chains.
Problem: Multi-Chain Is Broken
While blockchains and Ethereum-aligned rollups have achieved impressive cumulative throughput capacity, this progress came with a massive deterioration in user experience, capital efficiency, and network integrity.
Consider the experience of bridging USDT onto Binance Smart Chain. You have to search for a reliable bridge, send your USDT, and hold your breath as you wait for the transactions to confirm – only to realize that this was not enough, and now you need to find a way to buy BNB to pay for gas fees, and bridge that too.
If this experience sounds painfully familiar, multiply it by 20, roughly the number of rollups with more than $100M in TVL, and you get a picture of where we are today.
Third party bridges have emerged to facilitate cross-chain asset transfers, but operating a bridge is a cybersecurity nightmare. The three largest hacks in crypto have all involved bridge defaults, with over two billion dollars lost.
Even if centralized bridges were perfectly secure, they are very capital-intensive to operate because they require liquidity on every integrated chain. These costs are passed down to users through substantial fees, reaching up to 1-2% of the transaction value. This problem will only get worse over time. As the number of independent blockchains (L1s or L2s) as well as optimistic rollups grows, the capital that needs to be available in these bridges will have to grow quadratically.
All of this can be solved using the power of ZK.
The Elastic Chain Vision
ZKsync 3.0 — the elastic chain — is an infinitely extensible network of ZK Chains (rollups, validiums and volitions), secured by math and seamlessly interoperable with a uniform intuitive UX.
In economic terms, elasticity refers to the ability to increase supply proportionally in response to rising demand. In the context of blockchains, similar to the internet, a perfectly elastic architecture allows a blockchain to expand capacity limitlessly by adding new instances to match capacity for usage. As more users join and transactions increase, the system can continue scaling without compromising performance, verifiability, or decentralization.
The elastic chain embodies this type of architecture, enabled by recursive ZK proofs that expose 2 remarkable properties: unlimited parallelism for proof generation and constant-time verification of the computational outcome.
From the technical point of view, the elastic chain is a federation of autonomous ZK Chains, interconnected natively at the protocol level, forming a zone of free movement for users and crypto-assets.
From the user perspective, it’s a united multi-chain ecosystem that feels and behaves like a single chain.
The elastic chain is designed to be:
- Easy to use. Users can use one address across many chains. Only a single signature is required to transact with any user or smart contract in the ecosystem, and with fast confirmations. Transaction fees can be paid in any liquid token or can be completely free having been sponsored by the dApp.
- Low-cost. Cross-chain transactions cost roughly as much as similar transactions within a single ZK Chain. The number of chains and their capacity can be increased limitlessly without affecting transaction pricing.
- Secured by math. All transactions are verified and enforced by Ethereum without honest majority assumptions. In the long run, all transactions are verified by every user with a smartphone.
Elastic Chain Architecture
ZK technology alone is not enough to implement an elastic chain. You can’t just put a jet engine on a propeller plane, and you can’t simply patch a ZK proof on a legacy multichain ecosystem to fix it. A dedicated architecture must be created with ZK capabilities in mind to prevent liquidity fragmentation. ZKsync was designed from the ground up to make this vision a reality.
Overview
At a high level, the network is comprised of several key components:
- The ZK Router forms the foundation of the ZK Chain network. Implemented as a series of smart contracts on Ethereum, these components are responsible for managing the state of the network, handling chain registrations, facilitating certain critical interactions, and maintaining the shared liquidity for the network.
- Another component, known as ZK Gateway, is deployed as a piece of middleware between Ethereum and the ZK Chains, and facilitates full interoperability between ZK Chains. It also provides faster finality for low latency cross-chain bridging, and optimizes network interactions with Ethereum by combining proofs and state data.
- The ZK Chains themselves; fully customizable autonomous rollups, validiums, or volitions, built using the ZK Stack framework. They operate fully independently, while interconnected through the ZK Gateway and the L1 smart contracts.
Together, these core components ensure that ZK Chains can interact and transact with each other efficiently, inheriting the security of Ethereum, and forming a network that can scale horizontally without compromising on the core properties that make blockchains so powerful.
ZK Gateway
A key component we are introducing today is the ZK Gateway. It helps ZK Chains settle seamlessly to Ethereum. This means the chains can submit their proofs and data to Ethereum via the Gateway for the following advantages:
- Proof composition: across batches and across chains, reducing L1 verification costs.
- State diff compression: for small batches sent to the Gateway, which can forward the data to L1 in large efficient batches.
- Faster Finality: Used for low latency cross-chain bridging, by verifying the proofs of chains, and stopping them from equivocating, reinforced by significant validator stakes. No ZK Chain needs to trust another.
- Liveness: Each ZK Chain's liveness is managed independently by its validators. The Gateway does not affect it, chains can leave it as they wish.
- Censorship Resistance: Cross-chain forced transactions will be much cheaper than normal L1 censorship resistance, putting it within reach for all users.
ZK Chains are not required to use the ZK Gateway; they can settle directly to Ethereum and can choose to leave the ZK Gateway network if desired. ZK Chains can switch between using the ZK Gateway and directly settling to Ethereum at any time without affecting the security of their chains.
The ZK Gateway will be operated by a decentralized, trustless set of validators, to ensure resilience and reliability of the network. The participation in this decentralized validation process requires an ERC20 token. ZKsync network governance will designate a token for this purpose (for example, it could be the ZK token).
The validators will charge a fee to facilitate bridging, as well as a fee for every byte of state diff data posted to the ZK Gateway. This gives validators an incentive to join the ZK Gateway, as their revenues can grow exponentially over time, as more and more of the value transactions move onchain. At the same time, settling data on the ZK Gateway will be cheaper than settling directly on the Ethereum network, thanks to the recompression service provided by the validators. This is why most of the ZK Chains will likely opt in.
Elastic Chain User Experience
To users, the Elastic Chain looks and feels like a single blockchain that fulfills the original promise of crypto UX. Users can onboard with one-tap via FaceID or Passkeys (no seed phrases!), use their crypto-assets or tap into liquidity freely across any smart contract on any ZK chain (say goodbye to bridging and fragmentation!), achieve the composability that blockchains uniquely enable (asynchronously but fast and cheap enabled by the new Ethereum Multi-Chain Address (EMCA) standard), and enjoy customized experiences thanks to the power of modular smart accounts. Elastic Chain empowers users to use the applications they know and love without needing to know where they live, all while gaining the benefits of network effects of all ZK chains.
To better understand how this works, let's walk through an example: imagine a user wants to earn $BONSAI as a reward from a Lens-powered application and receive yield by being a liquidity provider. Instead of requiring users to download a wallet, identify what network they need to connect to, and bridge assets, Elastic Chain re-imagines this flow to make it simple and delightful for users:
- User visits the Lens-powered application and creates an account with their FaceID in one tap.
After the user has earned $BONSAI, the user visits the DeFi application that offers the best yield (regardless of which ZK chain it lives on) and begins earning in one click.
Elastic Chain in Comparison
Since this vision was first announced at SmartCon 2022, initially called “Bridgeless Hyperchains,” several teams started working on their version of a “chain-of-chains” network. The most applicable comparables are Optimism Superchain and Polygon AggLayer.
Below are recent results comparing ZKsync Era, Polygon zkEVM, and OP Mainnet, which used the AMM test to measure throughput using token swap transactions on a Uniswap V2-style AMM pool as an apples-to-apples comparison of different chains.
Elastic Chain Ecosystem
A large number of teams, companies, governments, and institutions are already building their own ZK Chains. By the end of 2024 more than 20 chains are expected to be live and operational on mainnet. Follow @zksync on X for the latest news and announcements coming this summer.
Start Building on the Elastic Chain
ZK Stack is a developer-friendly modular framework that makes it easy to customize & deploy interoperable ZK blockchains on the Elastic Chain. Interested in learning more about ZK Stack or ready to launch your own ZK Chain? Check out our ZK Stack Guide. Looking for more information? DM @zksync on Twitter/X.
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Disclaimer: The information in this blog is intended to be used for educational, illustrative, and inspirational purposes only. It does not constitute professional advice, nor serve as an endorsement or recommendation. Please note that the information provided does not constitute legal or financial advice, and should not be relied upon as the basis for any decisions. Features and concepts described in this blog that have not yet been deployed or implemented will be subject to input and approval from the ZKsync community and relevant stakeholders.
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