Besides Fraxchain, what other projects are trying Hybrid Rollup?

Authors: 0xFacai, Jaleel, BlockBeats

On June 16, the hybrid algorithm stablecoin protocol Frax Finance announced the launch of an Ethereum Layer 2 network called Fraxchain, which will natively support all Frax assets. It is reported that Fraxchain will adopt a hybrid rollup scaling solution that combines OP Rollups and ZK Rollups, aiming to achieve better scalability, faster finality, and enhanced security against competitors, attracting considerable attention from the crypto community.

In fact, this integrated rollup concept is not new. Back in July 2022, Optimism core developer Kelvin Fichter developed the Optimism Bedrock architecture and tweeted about this hybrid idea, stating that "Optimistic Rollups currently have advantages over ZK counterparts, and Bedrock aims to enable a seamless transition between Optimistic and ZK." He discussed this topic with Ethereum co-founder Vitalik Buterin.

Following Kelvin Fichter's thoughts, Ethereum co-founder Vitalik Buterin also expressed his views: combining Optimistic Rollups with ZK Rollups, governance is only used to resolve bugs between the two. The process is: 1) publish the block, 2) wait for a 24-hour fraud challenge period; 3(a) if there is no challenge, publish ZK SNARK for final confirmation; 3(b) if a challenge occurs, decide based on 2 of the 3 options (challenge game, ZK SNARK, and governance).

As more participants join the Layer 2 scaling competition, this rollup hybrid scaling idea is increasingly being applied. In addition to Optimism, several teams are also researching and experimenting with Hybrid Rollups. What are Hybrid Rollups? Why choose Hybrid Rollups? Which teams are developing in this field? BlockBeats analyzes and organizes this in the article.

What is Hybrid Rollup?

Hybrid Rollup is a hybrid rollup concept that combines Optimistic Rollups and ZK Rollups to maximize product functionality, thereby finding the best product-market fit (PMF).

To understand what Hybrid Rollup is, one must first understand what Optimistic Rollup and ZK Rollup are.

First, Rollup is one of the Ethereum scaling solutions that transfers the computation and storage of transactions on the Ethereum mainnet (Layer 1) to Layer 2 for processing and compression, and then uploads the compressed data to the Ethereum mainnet to enhance Ethereum's performance.

Essentially, users do not send transactions to L1 miners but to Rollup servers, executing transactions outside the Ethereum main chain. However, these Rollups will publish transaction data to the Ethereum main chain. When transactions are published to the main chain, they inherit the security properties of L1. Rollups typically have programmability, so they need to support smart contract (SC) languages for developers to build DApps. However, due to the incompatibility of Privacy with EVM (Ethereum Virtual Machine), Solidity cannot be directly used to develop privacy-type DApps. This requires a customized smart contract language to support both public and private contract writing. Of course, maintaining different types of state trees requires VM module adaptation.

Rollups typically operate on the second layer while having the flexibility to operate on the third layer.

According to different schemes for ensuring the validity of compressed data (i.e., data correctness), Rollups can be divided into ZK Rollups and Optimistic Rollups.

ZK Rollup is a rollup solution that uses zero-knowledge proofs, where ZK stands for zero knowledge. The difference from other Rollups is that ZK Rollup uses zkSNARK algorithms (a type of zero-knowledge proof algorithm) to compress data and ensure security.

Optimistic Rollup, literally understood as optimistic Rollup, optimistically assumes that the data synchronized to Layer 1 is correct. If someone believes that the synchronized data is incorrect (i.e., there is fraudulent behavior), they can issue a challenge during the challenge period. Therefore, this proof method is also called fraud proof, ensuring that the data ultimately synchronized to Layer 1 is valid.

Hybrid is a solution that combines the two types of Rollups, supporting more contract types, including public, private, and hybrid contract types. For developers, it allows for free choice of contract types based on their needs, and for users, it provides high freedom to choose transaction types within hybrid contracts.

The following chart simply depicts the positioning and functionality of Hybrid Rollup. Currently, several projects are known to be building in this direction. Although the technical details of each project vary, they all share a common vision: to bring more possibilities, higher security performance, more real-world scenarios, and more everyday users to the blockchain industry.

Related reading: “OP+ZK, Will Hybrid Rollup Become the Ultimate Future of Ethereum Scaling?”

Which teams are trying Hybrid Rollup?

The OP+ZK Rollup technology may seem far from us, but in fact, many well-known crypto protocols and projects have already made attempts in this field. In addition to Frax Finance, which recently announced the L2 network Fraxchain, many top teams have also developed their own products. BlockBeats has briefly summarized these protocols and projects.

Frax Finance

BlockBeats previously reported that on June 16, the hybrid algorithm stablecoin protocol Frax Finance announced the launch of an Ethereum Layer 2 network called Fraxchain, which will focus on creating a smart contract platform with an emphasis on decentralized finance, and all Frax assets will be natively supported on Fraxchain. Frax Finance co-founder Sam Kazemian revealed that Fraxchain is likely to launch by the end of this year.

Additionally, Sam Kazemian recently revealed during the podcast "Flywheel DeFi" that, unlike most Layer 2 scaling solutions on the market, Fraxchain will adopt a hybrid rollup scaling solution that combines OP Rollups and ZK Rollups, meaning that Fraxchain will be built on the Optimistic rollup architecture and integrate zero-knowledge proofs, aiming for better scalability, faster finality, and enhanced security against competitors.

Notably, the network will use Frax stablecoins and Frax Ether (Frax liquid staking derivatives) to pay transaction fees. Some of the fees generated in this Layer 2 network will be burned or redirected back to the Ethereum mainnet to be allocated to holders of the FXS governance token.

Metis

BlockBeats previously reported that on March 3 of this year, MetisDAO, focused on Layer 2 development, stated in a blog post that the Ethereum Layer 2 network Metis is developing a hybrid Rollup based on the combination of Optimistic Rollup (OPR) and zero-knowledge proofs (ZKP), which will combine the scalability of Optimistic Rollups with the security of ZK Rollups. At the same time, Metis stated that developing this new architecture will be one of its top priorities and that the technology will be open-sourced.

In the 2023 roadmap released by Metis Andromeda, Hybrid Rollup occupies a significant portion, demonstrating Metis's emphasis on it.

Workflow of Hybrid Rollup in the Metis network

Aztec

BlockBeats previously reported that on May 4, Aztec announced the launch of a public and privacy hybrid zkRollup network, which will continue to use the Aztec name. Its feature is the ability to execute both public and private smart contracts within one environment, which will help expand developers' design choices on that chain.

Aztec allows for the execution of smart contract logic in both public and private ways while still inheriting the security advantages of Ethereum. On Aztec, privacy is an option rather than a default requirement. Its goal is to scale Ethereum, providing privacy function calls, transaction privacy, and user anonymity while keeping all data public. This allows users to protect sensitive information from being leaked while still being able to share this information with relevant authorities for compliance purposes when necessary. Aztec also stated that the team is currently completing the deployment of basic contracts and expects to establish a local testnet before the third quarter of 2023, with users likely to access a mature public testnet before early 2024.

Polygon

In May of last year, Polygon established a partnership with global professional services and technology company Ernst & Young (EY) and released the Nightfall 3.0 version. Polygon Nightfall is essentially an Optimistic Rollup that utilizes zk encryption to protect privacy, with the most prominent feature being the effective combination of the core concept of Optimistic Rollup with the zero-knowledge (ZK) cryptography commonly used in ZK-Rollups, thus achieving a fusion of scalability and privacy.

In fact, as early as 2019, EY announced the initial version of Nightfall, and what sets it apart from other zk solutions is that Nightfall is a privacy-focused rollup, which EY positions as "one of the most prominent privacy solutions on Ethereum." Specifically, every transaction on Nightfall includes privacy, meaning that if Alice sends an asset to Bob, others will not be able to see what the asset is, how much value it contains, or where it went.

The emphasis on transaction privacy is because EY's target clients are enterprises. Initially, Nightfall aimed to build the first enterprise-grade blockchain directly on Ethereum, but later found that having privacy on the Ethereum mainnet was too expensive, so it shifted to Layer 2 and ultimately chose to collaborate with Polygon.

Mina

The lightweight blockchain protocol Mina's development team O(1) Labs has submitted a proposal to Optimism (renamed OP Mainnet) to apply its zero-knowledge proof technology based on MIPS zkVM to OP Stack fraud proofs, where MIPS functionality allows for high-performance snarkyJS and also permits the use of general-purpose languages to write applications.

Additionally, Optimism completed the mainnet Bedrock upgrade at 2:50 AM Beijing time on June 7, which not only reduces transaction fees, shortens system latency, and improves node performance but also enables seamless integration between Optimistic and ZK.

Why choose Hybrid Rollups?

Adopting a "Optimistic + ZK Rollups" hybrid architecture maximizes the advantages of both, meaning that it not only retains the Optimistic Rollup architecture, which is EVM compatible, but also maximizes security through general-purpose zero-knowledge proofs. Its validity proofs can clearly ensure the correctness of off-chain transactions while preventing operators from executing invalid state transitions.

ZK Rollups can increase throughput because zero-knowledge proofs eliminate the need for additional data, retaining only the minimum required for each transaction. This significantly increases throughput and reduces congestion on Ethereum.

Moreover, ZK Rollups bring additional benefits, such as improved transaction speed and faster finality.

By implementing zero-knowledge proofs on the Optimistic Rollup architecture, the time for transaction finality will be reduced from 7 days to about 4 hours. There are typically two types of time: confirmation time and finality time. Optimistic Rollups provide faster confirmation times; however, the premise of Optimistic Rollups is that all transactions are initially assumed to be valid, thus requiring a 7-day buffer period, meaning that transactions need to be confirmed for 7 days before achieving complete transaction finality. This 7-day window is left for validators to submit fraud proofs (if needed). By combining zero-knowledge proofs, as long as the prover generates the proof and the validator approves it, the validity of the transaction can be confirmed more quickly.

The ability to withdraw funds from L2 without delay also means that hybrid Rollups will bring higher capital efficiency to users.