This report analyzes the current discourse surrounding ZK rollups in the L2 scaling space. It examines how ZK technology is positioned as a contender in the L2 scaling competition. Furthermore, the report compares and contrasts the offerings of various ZK rollup projects, which is then used to create a framework to determine which ecosystems have the greatest likelihood of success.
With Ethereum abandoning its sharding based-scaling roadmap, for a rollup centric-roadmap the crypto market has largely agreed to a consensus that future Ethereum scaling will come from a mix of general purpose and app-specific rollup projects. While Ethereum, a ‘monolithic’ blockchain is the core-focus of the rollup thesis other upcoming chains built on a ‘modular’ architecture (Celestia), also plan to develop a robust ecosystem of rollups with them
In this piece we aim to look at ZK rollup landscape and identify projects that are best positioned to win this budding market. Since, the monolithic base layer + rollup execution layer based blockchains are currently under research and early development, we will largely focus on ZK rollups building on Ethereum
To date some the major ZK projects have received billions of dollars in combined funding and significant attention from the market
Some numbers for context:
net sector = $1.4 bn~
If we look at the state of Ethereum L2 market, the combined TVL across all Optimistic & ZK rollups, Plasma, Validium solutions is equivalent to $3 bn~ (estimated based on data from L2beat, Defi Lama and Arbiscan). This is roughly equal to 5% of all TVL across different blockchains as per data from DeFi Lama. At present roughly 80%~ of the rollup TVL belongs to Arbitrum and Optimism, which are both Optimistic rollups. However, this does not imply that ZK based rollups are inferior to ORs, infact much of the success of the current ORs can be attributed to market timing. Optimistic rollups launched at a time when most new users were basically priced out of using the main Ethereum chain with gas costs as high as 30$ per send txn
1.) TVL share across all rollup solutions 2.) TVL split across ZK based rollups Source: [L2beat.com](<https://l2beat.com/scaling/tvl>)
This implies two main points: