Ethereum Gets an Upgraded Scaling Testnet – And It’s Actually Years Ahead of Schedule

The full article can be found from:

https://www.coindesk.com/tech/2022/02/24/ethereum-gets-an-upgraded-scaling-testnet-and-its-actually-years-ahead-of-schedule/

The zkEVM test network will be the first of its kind and could change the Ethereum scaling landscape in the near future.

Ethereum is up 6% today while Bitcoin was up only 1.25%. Ethereum is expected to outperform over the next 6 months as we get closer to the ETH 2.0 UPGRADE at which time Ethtereum will become deflationary.

zkSync, a protocol responsible for implementing Ethereum scaling platforms, accomplished the unexpected yesterday, announcing the test network release of an Ethereum Virtual Machine compatible Zero-Knowledge rollup (zkEVM) years ahead of schedule.

The EVM is the environment in which all Ethereum wallets and contracts live and is responsible for defining the rules of the chain from block to block. The new test network is the first implementation of a ZK rollup capable of running the full Ethereum environment and will provide great insight into how capable zero-knowledge technology is at scaling blockchains.

Over the past couple of years, Ethereum rollups have taken two different directions in scaling the base layer, categorized as Optimistic and Zero-Knowledge. Both technologies have seen some level of adoption, with Arbitrum being the most notable Optimistic chain and DyDx taking advantage of ZK technology for its leveraged trading application. Like DyDx, ZK rollups have historically focused on offering a single type of application per chain, because the full Ethereum environment that offers customizable smart contracts would be too computationally extensive.

Until now, trade-offs tended to favor Arbitrum and Optimism; now zkSync has the opportunity to level the playing field. Optimistic Rollups are currently able to offer a single, composable environment in which users can use applications ranging from NFT marketplaces like OpenSea to lending protocols like Aave on mainnet. zkEVM would create a similar end experience for users, with cheaper transaction fees and nearly immediate finality, removing the need for the two-week withdrawal periods associated with Optimistic rollups.

ZK rollups are more computationally extensive and put a burden on nodes looking to solve zero-knowledge validity proofs, but they are able to post network state to Ethereum for a fraction of the cost of even Optimistic Rollups. At the time of writing, a trade on a decentralized exchange would cost users on Ethereum’s base layer just over $90, while Loopring and zkSync users would pay between $0.45-$0.68.

Bringing fees down on the Ethereum network years ahead of schedule is very good news for Ethereum.

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