Author: OurNetwork
Compiled by: TechFlow
This issue focuses on Zero-Knowledge Proofs, one of the most important yet least understood technological breakthroughs in our industry. In this issue, we explore zero-knowledge’s growth, adoption, network health, and competitive dynamics at both the application and infrastructure level.
Why this matters:
In order for crypto applications to achieve true mainstream adoption around the world, the blockchains they rely on must become more scalable and efficient. For Ethereum, the world's largest first-layer blockchain, and its community, this has led to a strategy of actively embracing second-layer scaling solutions. L2s like Optimism, Arbitrum, and Base were the first wave of innovation in this space, and today they have become the main platforms for crypto users and applications, locking billions of dollars in value and having millions of active addresses.
Meanwhile, zero-knowledge proofs (ZKPs) represent another important breakthrough in scaling solutions that can theoretically outperform existing infrastructure and support a wide range of new applications. Although this area is still in its infancy, we believe it deserves our attention due to the rapid progress it has made in a short period of time.
While it’s still early, on-chain data supports the thesis that cryptocurrencies are undergoing a major shift toward zero-knowledge proofs (ZKPs), first in ZKP applications and then in ZKP-enabled infrastructure such as Rollups. I’d like to especially thank the NEBRA and OurNetwork teams, as well as core data contributors Jackie (Dune) and Brandyn (OurNetwork), without whose support none of this would be possible. We are now demonstrating this shift through data.
Quick Links: Dune Dashboard | Contributing Library | Nebra
① ZKP: Industry Health
Total spending on Zero-Knowledge Proofs for Layer 2 solutions has exceeded $60 million.
Total Settlement Fees (TSF) paid by ZKP projects to Ethereum L1 exceeded $60.4 million, showing significant adoption over time. TSF peaked at $15 million in December 2023. In the past 30 days, TSF for Ethereum L1 for ZKP verification was only $150,000, reflecting the progress of the field in optimizing technology costs.
Dune - @nebra
Active addresses using ZKP continued to increase in 2023 and 2024, peaking at 7.6 million in March of this year. Although active addresses fell to 4.8 million in July 2024, a yearly low, the average for the year was 6.4 million, more than doubling the monthly average of 3.2 million active addresses in 2023, despite the overall summer downturn in the market.
Dune - @nebra
More than 1.5 million proofs were accumulated last month, but the number of ZK proofs settled on L1 blocks has declined in 2024, with the number of proofs settled on L1 reaching a peak of 189,280 in December 2023.
Dune - @nebra
This trend is mainly due to a slight drop in demand (active users), but more importantly to technological advances, with zkRollups adopting new techniques such as proof aggregation to reduce the number of proofs and TSF.
② ZKP: Project Trends
Linea generated 23.2 million ZKP transactions from 5.5 million users
Linea is becoming a “successful” chain in terms of ZKP user adoption. In the past 30 days, this L2 topped the list with 1.77 million unique active addresses, followed by zkSync with 1.3 million and Scroll with 950,000.
Dune - @nebra
In December 2023, Linea’s L1 spending on ZKP surged to $12.8 million, accounting for nearly 85% of all projects’ spending on ZKP that month, still a record high for payments, mainly due to Linea’s Voyage XP program. More recently, in 2024, Scroll began to lead TSF payments to L1, and is expected to further reduce costs in a planned upgrade on August 21st.
Dune - @nebra
③ ZKP: Infrastructure and Applications
Infrastructure uses ZKP 250 times more than applications
To date, 16.6 million addresses have triggered ZKP transactions through infrastructure, especially zkRollups, while only 62,780 addresses have triggered ZKP transactions through applications.
Dune - @nebra
There are several key reasons for this stark contrast. First, in August 2022, OFAC sanctioned Tornado Cash, a key application that uses ZKP for privacy protection. This made it illegal for US citizens to use Tornado Cash, resulting in a decrease in the use of ZKP in applications. Second, the cost per ZKP transaction at the infrastructure layer is significantly lower than the application layer - Linea's 30-day average cost per transaction is $0.00034. Although the average cost per transaction of the most expensive ZKP infrastructure, Polygon zkEVM, is $0.03, this is still far lower than the cost per transaction of the top ZKP applications.
Dune - @nebra
As the dust settles on OFAC sanctions, there has been a resurgence in the use of ZKP applications. Tornado Cash remains a relatively cheap ZK application in terms of cost per transaction, with a 30-day average of $1.0. While this is not an entirely like-for-like comparison due to L1’s higher fees, Tornado transactions are still ~33x more expensive than Polygon zkEVM and ~3,300x more expensive than Linea.
Dune - @nebra
④ ZKP: Macro Trends
The top five Optimistic Rollups still dominate zkRollups in terms of active addresses, with a ratio of 4; however, zkRollups are close to balancing the number of active addresses with Ethereum L1 this year
Active addresses for the top five Optimistic Rollups have grown this year, from 3.8 million in January 2024 (actually lower than zkRollups’ 4.8 million) to over 17.8 million. While many zkRollup chains are still to be launched, it’s worth noting that these solutions have attracted more than half of Ethereum L1’s addresses in each full month — as of July, zkRollups still account for 13% of Ethereum L1 and the top five optimistic Rollups market share in terms of active addresses.
Dune - Nebra
In the last month, zkRollup’s Linea ranked third among L2s with 1.8 million active addresses. Base leads all L2s with 11.5 million active addresses, followed by Arbitrum with 5.8 million.
Dune - Nebra
As L2 adopts more efficient ZKP-related technologies, the proportion of gas fees accounted for by ZKP contract calls has actually dropped to 0.14% of the 30-day rolling average. This is about 100 times the largest peak on record, which occurred in December 2023, when ZKP transactions accounted for more than 14% of Ethereum's total gas fees twice.
Dune - @nebra
ZK Proof: The Future of Proof Singularity Brought by NEBRA
The key technology for expanding the zero-knowledge proof (ZKP) blockspace is proof aggregation, which combines multiple proofs from different sources into a recursive proof to prove the validity of these proofs (i.e., aggregate proof).
Nebra
Proof aggregation protocols like NEBRA UPA significantly increase bandwidth and reduce the cost of on-chain zero-knowledge proofs. For example, in the current version of NEBRA UPA, the verification cost of Groth16 proofs is reduced from 300,000 gas to 18,000 gas, a cost reduction of more than 15 times. This is similar to how data availability protocols such as 4844, Celestia, EigenDA, and Avail reduce the cost of data availability.
Furthermore, proof aggregation enables what Vitalik Buterin calls “proof singularity”, where each block contains only one aggregated proof. Proof aggregation is not only used to reduce the cost of on-chain ZKP verification, but also enables native interoperability and shared settlement between zkRollups.
NEBRA's launch of UPA and its future Rollup operating system on the Ethereum mainnet marks an important breakthrough in the entire ZK field. With the advent of the proof singularity, the future of ZK and blockchain will be brighter. Imagine if proofs could be aggregated, Ethereum would save more than $39 million in costs!
Dune - @nebra
concept:
Zero Knowledge Proofs allow arbitrary computations to be verified with small cryptographic proofs and provide privacy protection. Applications and infrastructure generally use zero knowledge proofs in two ways:
- Protecting Privacy
- Verifiable computing and scalability
- Nebra
Nebra
In these cases, zero-knowledge proofs are generated through a combination of user-specific data and public on-chain data. These proofs are then verified on-chain in order to execute some subsequent business logic.
Privacy protection application:
In terms of data flow, when zero-knowledge proofs are used in privacy-preserving applications, the generation of proofs needs to be done on the client side to avoid leaking sensitive user information (such as private keys). In these applications, the user-controlled client (whether a browser or an application running on a mobile phone) submits proofs directly to the blockchain.
Example:
ZK-based identity solutions, such as Worldcoin
Privacy-preserving financial applications, such as tornado.cash and railgun
Extended solution:
When zero-knowledge proofs are used for scaling, the generation of the proofs usually does not require the user's sensitive data. Therefore, proof generation can be delegated to more powerful servers or public clouds. Some scaling solutions utilize GPU acceleration to improve the throughput and latency of proof generation.
Example:
zkRollups, such as zkSync, Polygon zkEVM, Scroll, Starkware, and Linea
zkCoprocessors, such as Succinct, RISC Zero, Axiom, Brevis, and Lagrange
Methodology:
Through this dashboard, we are measuring three key metrics:
Total Settlement Fees (TSF): refers to the total amount of ETH paid by a user or scaling solution to verify a zero-knowledge proof on-chain. These fees can usually be broken down into cryptography-related precompiles that call the EVM (more on this later).
Number of on-chain transactions: The number of transactions that verify the zero-knowledge proof.
Number of active users: The number of users using ZK proofs.
How do we measure?
We implemented queries on Ethereum’s Dune index data to obtain gas expenditures for ZKP verification. By identifying the correct contract and transaction calling methods, we identified the relevant internal calls (see the annotated data methodology in this section). These expenditures mainly come from calling the following precompiles:
Nebra
