Zero-Knowledge (ZK) Rollups are a cryptocurrency scaling solution that offers enhanced transaction throughput at a reduced cost by carrying out computation in a more efficient manner. ZK Rollups process resource-intensive transactions and large amounts of data using an off-chain Layer-2 solution, and then they pass on the resulting (small) zero-knowledge proof to a Layer 1 blockchain (for example: Ethereum or Bitcoin) to save the final transaction states. The Zero-Knowledge Proofs provide ‘proof’ to the Layer 1 blockchain that the transactions were processed correctly without revealing the private transaction data.
ZK Rollups ‘roll up’ or aggregate many transactions into batches and processes/stores their states off-chain. They create and write comparably small zero-knowledge proofs produced for verification on the Layer 1 blockchain to be mined or verified by its validator nodes. Most of the transaction data does not have to be stored on the Layer 1 blockchain. Processing and storing large quantities of transaction data directly on Layer 1 blockchains such as Bitcoin or Ethereum would be costly due to the resource-intensive nature of blockchain transaction verification. ZK Rollup-powered systems can process transactions even using a centralized node provider and then pass the ZK proofs onto a Layer 1 blockchain to make them immutable and tamper-resistant.
ZK Rollup have their own chains that are powered and controlled by smart contracts that run on a Layer 1 blockchain. These chains are in some cases use a ‘supernode’ (which is not decentralized) to process transactions, which runs the risk of transactions being censored before they are finalized on the Layer 1 chain (the supernodes can do this by refusing to include users’ transactions in the batch of transactions that they are going to process). There are many censorship-resistant Layer 1 blockchains (for example: Bitcoin and Ethereum). However, that doesn’t stop ZK Rollup operators from censoring transactions before they are saved to the Layer 1 chain. ZK Rollups users can avoid the supernode’s censorship by submitting their transactions directly to the rollup’s smart contract.