The Rollup - Unifying the Modular Ecosystem with Union Build - Revelo Intel

The Rollup – Unifying the Modular Ecosystem with Union Build

In this episode of The Rollup, which took place on March 11, 2024, Robbie, Andy, and Karel discuss composability, interoperability, and ZK technology. Read our notes below to learn more.

Background

  • Robbie (Host) – Merkle Tree Maxi, Co-Founder of The Rollup
  • Andy (Host) – zkProof Maxi, Co-Founder of The Rollup
  • Karel (Guest) – Co-Founder of Union
  • Union – A hyper-efficient zero-knowledge infrastructure layer for general message passing

Web3 Development Philosophy

  • Karel says that he moved towards web3 where developers have greater control over what they build. The goal of web3 is to create a world computer with predictable interactions, trustlessness, and verifiability, particularly crucial for finance applications.

Composability in Web3 Finance

  • Karel says that composability allows for combining simple contracts to create complex financial products, driving innovation within DeFi. The security level consistency across protocol interactions enables seamless composability essential for DeFi growth.
  • He adds that challenges such as scalability limitations and censorship risks arise with a single global computer model in web3.
  • Karel says that composability lacks guarantees when moving outside pure mathematical blockchain spaces. Current composability involves third-party intermediaries due to lacking guarantees and security. Lack of atomic execution leads to broken states, requiring off-chain solutions.
  • Karel says that asynchronous systems lack atomic execution, leading to broken states and reliance on off-chain architecture. The challenge lies in making asynchronous as secure as synchronous for successful modular integration.

Future Vision: Scalable Interoperability

  • Karel says that they aim to enable thousands of chains and protocols to interact seamlessly. He emphasizes permissionless connectivity for startups regardless of size or funding level.
  • He adds that startups must integrate securely with trustless connections while mitigating potential vulnerabilities. Avoid fragmented security approaches by establishing consistent standards across messages for enhanced system integrity.

Security and Consensus Verification

  • Karel says that smart contracts on Ethereum need to operate at the highest security level to ensure trustlessness. Developers must assess each smart contract individually for security guarantees rather than integrating any contract with the same level of security.
  • He adds that consensus verification is crucial for achieving desired guarantees, inheriting underlying layer-1 security guarantees. Zero-knowledge proofs are essential for proper consensus verification, ensuring scalability by minimizing block space allocation.
  • Karel says that scalability in a network with numerous rollups requires efficient communication between apps at a minimal cost. Asynchronous composability can be as effective as synchronous through hyperscaling enabled by permissionless infrastructure.
  • He adds that making value-based decisions on supporting different chains is vital for an interoperable protocol’s success. Choosing interoperable protocols like IBC supports seamless connections between app chains while avoiding proprietary solutions.

Adoption of the IBC Protocol

  • Karel says that Union opts for IBC as a core protocol due to its alignment with industry standards and substantial growth in monthly volume. By aligning with leading standards like IBC, Union aims to support developers’ diverse needs across various ecosystems efficiently.

Intents and Modular Future

  • Karel says that the goal is to create a future where gas fees align with security costs, enabling broader access to banking services through crypto.
  • He emphasizes the objective of reaching trillions in volume to bank everyone or at least provide crypto banking services, highlighting the importance of horizontal scalability.

Decentralization Spectrum

  • Karel says that single signature systems rely on trusting a single party for relaying transactions but pose significant security risks if compromised.
  • He adds that multi-signature systems involve multiple parties collaborating for transaction validation but may still be vulnerable due to known relationships among participants.

Consensus Verification and State Verification

  • Karel says that consensus verification leverages underlying validators’ security without introducing new decision-making entities, offering robustness against attacks.
  • He adds that state verification represents the gold standard by combining validators as a settlement layer with ZK rollups for fraud prevention but faces limitations in supporting diverse products currently.
  • Karel says that a single ZK proof can interact with multiple chains concurrently. Blocks consist of various sections like transaction states and validator information. Blob space in blocks refers to gas usage affecting state growth. Connecting chains through zero-knowledge-proofs (ZKPs) incurs gas costs but offers aggregation benefits for scalability.
  • He adds that settling ZKPs on-chain precedes bundling them for enhanced efficiency. Aggregating ZKPs leads to infinite scalability and streamlined inter-chain communication.

Seamless Composability via ZK Technology

  • Karel says that direct calls between chains enhance composability without intermediary risks. Aggregated proofs enable cross-chain data inclusion and validation across interconnected systems.
  • He adds that ZK technology guarantees trustless permissionless interoperability with aligned states.
  • Karel says that off-chain transactions incur minimal costs compared to on-chain. ZKPs aim to elevate off-chain costs and lower on-chain expenses for optimization. Generating proofs efficiently allows for cost-effective verification in a single proof.
  • He adds that creating a circuit for 10,000 ERC20 transfers costs similar to 10 transfers. Users benefit from reduced gas fees, enhancing protocol sustainability. More funds can be allocated back into the protocol or trading activities due to cost savings.
  • Karel says that asynchronous composability provides immediate or next-block results. Intermediate limbo states are avoided with good asynchronous composability. Synchronous composability requires locks for successful transactions but may lead to potential failures.
  • He adds that achieving atomicity across rollups involves ensuring the simultaneous success or failure of transactions. Additional costs may arise due to the need for more locks in synchronous scenarios.

Proof of Proof Mechanism

  • Karel says that synchronous composability within decentralized sequencer networks is discussed, highlighting the need for asynchronous solutions to bridge different ecosystems. Asynchronous composability is a crucial driver due to its support for diverse products, contrasting with synchronous solutions that limit flexibility.
  • He adds that synchronous composability within sequencer groups is acknowledged, but asynchronous communication remains essential between distinct sequencer groups.

Practical Implementation and Community Engagement

  • Karel explains the initial state focus on settling multiple ZKPs for specific chains based on cost-effectiveness.
  • He adds that they will expand beyond the Cosmos ecosystem due to the demand for resilient networks accessible globally, leading to integration efforts across various platforms.

Discussion on Scalability and Single Slot Finality

  • Karel says that connecting to Ethereum also connects to other networks like Scroll, showcasing scalability. Polygon‘s aggregation layer allows users to pay once for a connection and access multiple services for free.
  • He adds that single-slot finality ensures immediate block finalization upon production, crucial for synchronous composability. Ethereum lacks single-slot finality, leading to occasional block reorganizations causing delays in transactions.
  • Karel says that transactions are immediately confirmed upon submission, enhancing user experience. Ideal for bridging protocols as it eliminates risks associated with block reorganizations.
  • He adds that many chains lack single-slot finality due to initial implementation complexities. Implementing on Ethereum is challenging due to existing systems but progress is promising with BLS signatures.
  • Karel says that latency differences between block times can be managed by choosing proof generation intervals.

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Show Information

  • Medium: Youtube
  • Show: The Rollup 
  • Show Title: Modular March EP 1: Unifying the Modular Ecosystem with Union Build
  • Show Date: March 11, 2024