Besides Fraxchain, which other projects are attempting Hybrid Rollup?

Author: 0xFacai, Jaleel, BlockBeats

Editor: Jack, BlockBeats

On June 16th, Frax Finance, a stablecoin protocol using hybrid algorithms, announced the launch of Fraxchain, an Ethereum Layer2 network that natively supports all Frax assets. Fraxchain will adopt a hybrid rollup scaling solution that combines OP Rollups and ZK Rollup to achieve better scalability, faster finality, and enhanced security against competitors. This has attracted a lot of attention from the crypto community.

Actually, this kind of fusion Rollup idea is not something new. As early as July 2022, Kelvin Fichter, the core developer of Optimism, developed the Optimism Bedrock architecture and tweeted about this mixed approach, stating that "Optimistic Rollup currently has advantages over similar products like ZK, and Bedrock aims to make seamless transition between Optimistic and ZK possible". Based on this topic, he also discussed with Vitalik Buterin, the co-founder of Ethereum.

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

With more and more participants joining the competition for layer 2 scaling, the Rollup fusion scaling approach is increasingly being applied. In addition to Optimism, there are multiple teams researching and experimenting with Hybrid Rollups. What are Hybrid Rollups? Why choose Hybrid Rollups? Which teams are developing in this field? BlockBeats provides analysis and organization in this article.

Hybrid Rollup is a type of Rollup that combines the technologies of Optimistic Rollups and ZK Rollups using a hybrid approach. This approach maximizes the optimization of product functionality, allowing for the best possible Product-Market Fit (PMF), which is the alignment of a product with its target market.

To understand what Hybrid Rollup is, it is necessary to first understand what Optimistic Rollup and ZK Rollup are respectively.

First of all, Rollup is one of the Ethereum scaling solutions, which transfers the computation and storage of transactions on the Ethereum mainnet (Layer1) to Layer2 for processing and compression, and then uploads the compressed data to the Ethereum mainnet to expand Ethereum's performance.

Essentially, users do not send transactions to L1 miners, but rather send them to Rollup servers to execute transactions outside of 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 are typically programmable, so they need to support smart contract (SC) languages for developers to develop DApps. However, due to the incompatibility of privacy and EVM (Ethereum Virtual Machine), Solidity cannot be directly used to develop privacy-type DApps. This requires a customized smart contract language to support the writing of public and private contracts. Of course, since it is necessary to maintain different types of state trees, VM module adaptation is required.

Rollup typically runs on the second layer, while also having the flexibility to run on the third layer.

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

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

Optimistic Rollup literally means optimistic Rollup. It optimistically assumes that the data synchronized to Layer1 is correct. If someone thinks 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 fraudulent proof, which ensures that the data finally synchronized to Layer1 is valid.

Hybrid is a solution that combines two Rollup approaches, supporting more contract types, including public, private, and mixed contract types. For developers, they can freely choose contract types based on their own needs, and for users, they also have a high degree of freedom to freely choose transaction types in mixed contracts.

The following chart simply depicts the positioning and functions of Hybrid Rollup. Currently, there are multiple projects dedicated to building in this direction. Although the technical details of each project may differ, they all share a common vision: to bring more possibilities, higher security performance, more real-world scenarios, and more daily users to the blockchain industry.

Related reading: "OP+ZK, Hybrid Rollup: Will it become the ultimate future of Ethereum's scalability?"

Which teams are trying Hybrid Rollup?

OP+ZK's Rollup technology may sound distant to us, but in fact, many well-known encryption protocols and projects have already tried in this field. In addition to Frax Finance, the L2 network of Fraxchain that was recently announced, many top teams have also developed their own products. BlockBeats has briefly sorted out these protocols and projects.

Frax Finance

BlockBeats previously reported that on June 16th, Frax Finance, a hybrid algorithm stablecoin protocol, announced the launch of an Ethereum Layer2 network called Fraxchain. The network will focus on creating a smart contract platform that emphasizes decentralized finance, and all Frax assets will receive native support on Fraxchain. Sam Kazemian, co-founder of Frax Finance, revealed that Fraxchain is likely to be launched by the end of this year, according to The Block.

Additionally, Sam Kazemian, the founder of Frax Finance, recently revealed on the "Flywheel DeFi" podcast that unlike most second-layer scaling solutions on the market, Fraxchain will adopt a hybrid rollup scaling solution that combines OP Rollups and ZK Rollups. This means that Fraxchain will be built on the Optimistic rollup architecture and integrate zero-knowledge proofs, aiming to achieve better scalability, faster finality, and enhanced security against competitors.

It is worth noting that the network will use Frax stablecoin 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 FXS governance tokens.

Metis

BlockBeats previously reported that on March 3rd of this year, MetisDAO, which focuses on L2 construction, stated in a blog post that Metis, an Ethereum Layer 2 network, is developing a hybrid Rollup based on Optimistic Rollup (OPR) and Zero-Knowledge Proof (ZKP), combining the scalability of Optimistic Rollups with the security of ZK Rollup. 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 large portion, which is enough to prove the importance that Metis attaches to it.

Metis Network's Hybrid Rollup Workflow

Aztec

BlockBeats previously reported that on May 4th, Aztec announced the launch of a public and private hybrid zkRollup network, which will continue to use the name Aztec. Its feature is the ability to execute public and private smart contracts in one environment, which will help expand the design choices for developers on the 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 optional rather than a default requirement. Its goal is to extend Ethereum with the ability to have 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 institutions for compliance purposes when necessary.

Aztec also states that the team is currently completing basic contract deployment and is expected to establish a local test network before the third quarter of 2023, with users expected to access a mature public test network before the beginning of 2024.

Polygon

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

In fact, as early as 2019, Ernst & Young released the initial version of Nightfall. Unlike other zk solutions, Nightfall is a privacy-focused rollup, which Ernst & Young positioned as "one of the most prominent privacy solutions on Ethereum." Specifically, every transaction on Nightfall includes privacy, which means 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 reason why more emphasis is placed on the privacy of transactions is because EY's target customers are enterprises. Initially, Nightfall attempted to build the first enterprise-level blockchain directly on Ethereum, but eventually found that privacy on the Ethereum mainnet was too expensive, so it switched to L2 and ultimately chose to collaborate with Polygon.

Mina

The development team of Mina, a lightweight blockchain protocol, O(1) Labs, has submitted a proposal to Optimism (now renamed as OP Mainnet) to apply its zero-knowledge proof technology based on MIPS zkVM to OP Stack fraud proof. The MIPS function allows the use of a general-purpose language to write applications in addition to the local high-performance snarkyJS.

In addition, Optimism completed the mainnet Bedrock upgrade at 2:50 am on June 7th Beijing time. The upgrade not only reduces transaction fees, shortens system delays, and improves node performance, but also makes seamless integration between Optimistic and ZK possible.

Why choose Hybrid Rollups?

Using a hybrid architecture of "Optimistic + ZK Rollups" can maximize the advantages of both. This means that not only can the Optimistic Rollup architecture be retained, which is EVM compatible, but also the universality of zero-knowledge proofs can be maximized to enhance security. Its effectiveness proof can clearly ensure the correctness of off-chain transactions and prevent operators from executing invalid state transitions.

ZK Rollup can improve throughput because zero-knowledge proofs eliminate the need for additional data, and each transaction only retains the minimum required. This greatly increases throughput and reduces Ethereum congestion.

In addition, ZK Rollup also brings additional benefits, namely improved transaction speed and faster attainment of finality.

By implementing zero-knowledge proofs on the Optimistic Rollup architecture, the final confirmation time for transactions will be reduced from 7 days to approximately 4 hours. There are typically two types of time involved, confirmation time and final confirmation time. Optimistic Rollup provides faster confirmation time, however, the premise for Optimistic Rollup is that all transactions are valid from the beginning, hence the need for a 7-day buffer period, meaning that it takes 7 days to fully confirm a transaction. This 7-day window is left for validators to submit fraud proofs (if necessary). With the combination of zero-knowledge proofs, as long as the prover generates the proof and the verifier approves it, the validity of the transaction can be confirmed more quickly.

Funds can be extracted from L2 without delay, which also means that fusion-type Rollups will bring higher capital efficiency to users.

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