As zero-knowledge (ZK) technology advances in addressing mainstream use cases, the community supporting this transformative tech is gaining significant momentum. The recent zkDay Istanbul event, attended by over 1,200 ZK developers, community members, and enthusiasts, including Ethereum co-founder Vitalik Buterin, demonstrated the growing interest and dedication to developing ZK solutions.
Against the backdrop of this vibrant community, industry experts gathered to explore the challenges and opportunities surrounding layer 1 (L1), layer 2 (L2), and ZK-rollups. In an exclusive interview conducted at zkDay Istanbul, industry experts such as Nick White from Celestia, Viv Ford from Aleo Blockchain, Misha Komarov from Nil Foundation, Natasha Carter from Mina Foundation and Kenny Li from Manta Network provided insightful perspectives on the critical issues shaping the future of cryptocurrency adoption and development.
The discussion centered on the significance of L1, L2, and ZK technologies for crypto adoption, their challenges, and how projects can attract developers and new users effectively.
CT: Why do you think L1, L2 and ZK-rollups are important for crypto adoption?
Nick White (Celestia): ZK-rollups are significant for crypto adoption because they enable faster, more secure bridging between rollups. Additionally, they hold the potential for proof aggregation, where the state transitions of multiple rollups are consolidated into a single proof, which I envision as the ultimate solution for settlement and bridging.
Viv Ford (Aleo): L1 blockchains face scalability limitations, leading to slow transaction speeds and high fees, which impedes mainstream adoption. L2 solutions address these challenges by handling transactions off-chain or on sidechains, significantly reducing costs and enhancing transaction speeds. ZK-rollups further improve privacy by employing cryptographic techniques to keep transaction details confidential.
In essence, L1, L2, and ZK-rollups tackle specific issues, making cryptocurrency more practical for various use cases and fostering broader adoption.
Misha Komarov (Nil Foundation): I’d say the primary reason for that is that cryptocurrency necessitates neutral credibility and security. This is the foundation of Ethereum. The distinction is that the majority of existing applications demand either lower transaction fees than Ethereum currently provides or enhanced transaction throughput. This is what L2s and certain ZK-rollups offer us.
CT: What challenges do L1, L2 and ZK-rollups face in their quest to improve scalability, security, and decentralization?
Nick White (Celestia): The challenge ZK-rollups face is that they still exhibit high proving costs or proving times depending on the proof system. However, with the rapid pace of innovation in the space, these issues are being addressed and reduced significantly.
Viv Ford (Aleo): Balancing scalability, security, and decentralization in the realm of cryptocurrency is a complex endeavor. L1 blockchains encounter scalability limitations, potentially leading to centralization as they strive for increased transaction speeds. L2 solutions rely on the stability of L1 blockchains while introducing potential security vulnerabilities. ZK-rollups offer enhanced security but demand impeccable cryptography.
Achieving decentralization while scaling remains a challenge; faster block times can jeopardize decentralization. L2 adoption and compatibility can be sluggish, and educating users and developers about these intricate aspects presents a significant challenge. It’s an ongoing journey of innovation and adaptation!
Misha Komarov (Nil Foundation): Rollups have yet to attain credible security, beginning with the implementation of fraud proofs, whether optimistic fraud proofs or ZK fraud proofs. ZK-rollups have yet to achieve adequate performance to make them suitable for high-load applications. Moreover, they have yet to reach competitive transaction costs, making them suitable for micro-transactions.
All of these limitations are primarily hindered by prover performance and data availability costs in the case of ZK-rollups.
CT: Can you describe in layman’s terms what your company is and what solutions it provides?
Nick White (Celestia): Celestia is a modular blockchain network that empowers Web3 to become significantly more scalable and flexible for developers. It achieves this scalability by employing a novel technology called “data availability sampling,” which ensures that the layer 1 network seamlessly scales with the increasing number of users. This is crucial because it eliminates the constraint of fixed block capacity, enabling seamless network expansion as more users join.
Additionally, Celestia enhances flexibility by facilitating the creation of custom blockchains, known as rollups, equipped with diverse components. This modularity empowers developers to combine and adapt these elements to build solutions tailored to specific use cases, ranging from DeFi and gaming to social applications and beyond. Celestia aims to establish the groundwork for the next-generation infrastructure that ushers in the broadband era of Web3.
Viv Ford (Aleo): Aleo is a layer 1 blockchain, which means it is not built on top of any other blockchain, such as Ethereum or any other existing chain. It is a focused layer 1 blockchain specifically designed for private applications and decentralized private computations.
The core idea behind developing a layer 1 blockchain like Aleo stemmed from the realization that while Ethereum offers programmability and C-cash provides privacy, there was a missing element that combined both: a secure and private execution environment for decentralized applications. Additionally, true privacy requires a fundamental approach that integrates privacy from the ground up. Upon examining existing layer 2 and 1 Ethereum solutions, we concluded that they did not provide true inherent privacy and lacked this ground-up approach. Thus, we embarked on the creation of a new layer 1 blockchain, Aleo, that prioritizes both programmability and privacy, ensuring a secure environment for decentralized applications (DApps).
Misha Komarov (Nil Foundation): Attracting developers is primarily about demonstrating that they will have a sizeable user base if they build on your platform. That’s the first step. There are two primary approaches to achieving this. One approach is to clearly articulate a viable business model and ensure its stability. That’s how Polygon and we, as well as any well-structured ecosystem foundation, do it. Another approach involves amassing significant liquidity, making developers gravitate to your platform. That’s essentially Ethereum’s strategy, and it’s something I believe many players are capable of achieving. These are the two main methods, so choose the one that best suits you.
Natasha Carter (Mina Foundation): Mina Protocol is a ZK-native layer 1 blockchain that utilizes ZK-proofs as its core technology. It employs recursive ZK technology to ensure it’s exceptionally lightweight, lightning-fast and scalable.
Kenny Li (Manta Network): Manta Network is the modular blockchain for ZK applications. Manta Pacific is the modular L2 ecosystem for EVM-native ZK applications and DApps that aspire to deliver the lowest cost and optimal user experience. By harnessing Manta’s Universal Circuits to enable ZK-as-a-Service and Celestia’s data availability for modularity to minimize gas fees, Manta Pacific provides the ideal environment for ZK-powered applications. Manta Pacific is deployed as one of the largest OP Stack rollups and will evolve to zkEVM using Polygon CDK.
CT: How do you attract developers to your company?
Nick White (Celestia): First, you need to have a compelling product that addresses the needs of developers and satisfies users. Similar to Jeff Bezos’ observation that consumer behavior remains consistent while technology evolves, users consistently seek faster, cheaper experiences. Celestia aligns with this mindset, striving to provide infrastructure that empowers developers to create user-centric applications. Modular design is a key innovation that resonates with developers, enabling them to build more efficient and engaging experiences.
Beyond the product itself, effective communication is crucial. Explaining complex technology in a clear and concise manner is essential, especially in an industry saturated with noise. Using the term “modular” helps Celestia effectively communicate its unique value proposition, capturing the interest of developers and clearly outlining its innovative approach.
Viv Ford (Aleo): By providing developers with convenient and user-friendly resources, we aim to facilitate a deeper understanding of fundamental concepts such as zero-knowledge proofs (ZKPs) and domain-specific languages (DSLs) that are relatively easy to learn for existing coders with experience in programming languages like Python or TypeScript. Our goal is to encourage developers intrigued by the potential of ZKPs but don’t necessarily want to delve into the intricacies of writing complex circuits to explore the possibilities of creating private applications without requiring in-depth knowledge of ZKP mechanisms.
Misha Komarov (Nil Foundation): The only way to attract developers is to demonstrate that they will have a user base if they build on your platform. There are two primary approaches to achieve this. One way is to clearly articulate a viable business model and ensure its stability. That’s how Polygon and other ecosystem foundations operate. Another approach is to amass significant liquidity, which will draw developers to your platform. That’s the strategy employed by Ethereum, and it’s something I believe many projects can achieve. Ultimately, the choice depends on your preferences.
Natasha Carter (Mina Foundation): We have many opportunities for builders to participate in the Mina ecosystem through grants programs specifically designed for the Mina community. One of the most recent initiatives is Mina Navigator, which offers up to six million Mina tokens to individuals who contribute to the builder grant program. We also provide various other avenues for community involvement, and we are committed to fostering a thriving ecosystem that showcases the best of ZK development.
CT: How can blockchain companies incentivize users to adopt their apps or products? What advice would you provide?
Nick White (Celestia): End users just want to use the thing. But I think there’s a lesson in there about simplifying the value proposition to end users within a specific application, like D5. For example, you could focus on the idea of being your own bank or having sovereignty and control over your money directly. So, you can apply that lesson, but I don’t know if the modularity or a lot of things that Celestia does translate to the end-user yet.
Viv Ford (Aleo): Users will come if you provide them with a good experience. So, as long as the experience is good and you’re addressing a need that makes sense, then the user will show up. We’re at a strange stage where people think they can simply purchase user acquisition, but the truth is that users will come if you’ve created a convenient and positive experience for them, and they will stay because they get something out of it.
So, for developers to the user kind of a line, I think the big thing is to ask yourself: Hey, are you fixing something in the world that you want to be fixed? Is there any likelihood that other people will want to use this high? And then, is that experience enjoyable?
Misha Komarov (Nil Foundation): It’s all about figuring out the answer to the question “why?”. So, it’s like product-market fit is something that you cannot buy. As they say, you can’t buy two things in life: love and product-market fit. Therefore, you cannot buy product-market fit, but once you’ve found it, just keep refining and iterating.
Natasha Carter (Mina Foundation): Accessibility is one of the most effective methods for attracting users. Ensuring developers building on Mina have access to the necessary documentation to create the best ZK applications for users is essential. Additionally, it is crucial to provide users with a positive user experience when utilizing these applications. For example, ZK IDs and gaming can significantly enhance people’s lives by granting them greater control over their privacy and information.
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