A bit of a shorter post this week, but I felt compelled to write about what felt like a pretty big week for a few of the topics I’ve kept one eye on - Zero-Knowledge Roll-ups, Side-chains and EVM compatibility.

Yes, to some, that’s going to sound like gobbledegook.

My goal of the post is to untangle what’s been going on and why this is important in the crypto world.

zkEVM 101:

…Soooo, what are we talking about again? Some definitions to start:

• Rollups are layer two (L2) scaling solutions, in that they work above the Ethereum “layer one” to make Ethereum-based transactions affordable and fast. The two most popular types of rollups are optimistic rollups and zero-knowledge (or ‘zk’) rollups.

• EVM-compatibility (Ethereum Virtual Machine) allows any project to plug into Ethereum’s infrastructure. This makes development way easier and you’re piggybacking on something with a large safety net.

• Optimistic rollups - this gives the benefit of the doubt that the transactions in the roll-up are valid. This can be risky as you’re assuming that there are no nefarious actors trying to submit fraudulent transactions.

• Zk-rollups (zero knowledge) - this is basically Ethereum’s end game. This is like proving you know the solution, without giving away the actual answers (e.g. we used a Wordle analogy in a previous newsletter).

zkEVM’s combines zero-knowledge roll-ups AND EVM-compatibility.

This is cool because developers can develop and launch smart contracts and integrate directly with Ethereum - but with much faster speeds and lower costs.

What’s the big deal with ‘zk rollups’?

Zk rollups are incredibly efficient and secure, but they haven’t been able to offer EVM compatibility. This reduces the likelihood that developers will build stuff using the technology, because it’s a TON of extra effort.

This sort of leveling up will help zk rollups become more accessible while increasing security for users.

What was announced last week?

1. On July 18th, the Scroll team unveiled a pre-alpha testnet for its zk rollup;

2. On July 20th, zkSync builders Matter Labs reveals zkSync 2.0

3. AND on the same day, Polygon introduced an open-source implementation for the Polygon zkEVM - this makes writing code and using tooling much easier - it’ll be like writing the same code for Ethereum, but on the Polygon blockchain.

Conclusion:

We will likely see many more companies and blockchains implement a ZkEVM solution - this helps broaden access for EVM compatibility (using Ethereum’s infrastructure) and leverages the zero-knowledge rollup approach (for privacy and speed purposes) to create a more effective solution.

💬 One Quote

We must persist to reach the highest peaks and receive the treasure we seek.

📚 Interesting Resources of the Week

Sam Bankman-Fried lays out some potential use cases worth paying attention to - these include:

1. Payments

2. Market structure

3. Social Media

I’m excited for the payments takeover - in the West, we don’t suffer as much from this, but certainly in other parts of the world, sending money is an unnecessary painful experience.

🔗 What I miss about working at Stripe 

I resonate with Stripe’s ethos and the author does a good job of articulating the Stripe magic that’s been lost.

🥳 Crypto has a Use Case

Napkin Math is one of my favorite newsletters - Evan lays out a case for how Braintrust, a decentralized freelance marketplace, is a better value proposition than the current incumbents (Fiverr, Upwork etc).

Until next time

I hope you enjoyed this week’s (shorter!) edition - I'd love it if you shared it with a friend or two.

Got feedback? Reply to this email or tweet at me and let’s chat.

Fahim