ZK Compression on Solana Explained: New Era of L1 Scalability?

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Solana-based developers Light Protocol and Helius Labs introduced a new layer one (L1) scaling technology called ZK Compression in June 2024.

The technology has been lauded as a groundbreaking L1 scalability approach by many. Yet critics see ZK Compression as a layer two (L2) scaling solution under a different name.

What is ZK Compression on Solana? Let’s find out.

Key Takeaways

  • ZK Compression is expected to reduce on-chain costs on Solana “by orders of magnitude.”
  • Cost of creating 100 token accounts using ZK Compression was 5000 times cheaper, said developer.
  • Justin Bons saud ZK Compression will bring “all of the upsides of a roll-up without any downsides” to Solana.
  • Ethereum developer Ryan Berckmans said ZK Compression is “actually an L2.”
  • The introduction of ZK Compression on Solana highlighted distinctive routes taken by Solana and Ethereum towards scaling.

    What is ZK Compression on Solana?

    ZK Compression is a primitive introduced to the Solana (SOL) blockchain that is expected to reduce on-chain costs “by orders of magnitude”.

    A primitive is a low-level cryptographic algorithm that is used as a foundation or building block by higher-level cryptographic algorithms.

    According to official documents, ZK Compression will allow developers and users to store data on cheaper off-chain spaces instead of more expensive on-chain storage.

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    How does it work? To put it simply, ZK Compression is the amalgamation of two processes: compression and zero-knowledge (ZK) proofs.

    When developers use ZK Compression, they can compress account data and store only its state roots on-chain. This allows the rest of the underlying data to be stored in cheaper off-chain storage spaces.

    For context, a state root provides a single point of reference for an entire dataset.

    To ensure the integrity of the compressed state, ZK Compression uses ZK proofs to cryptographic verify state roots.

    Understanding Solana’s Account Model

    To understand ZK Compression better, we need to talk about Solana’s account model.

    Solana is a decentralized global computer that can store data. Its data storage units, known as “accounts,” can store all types of data, from executable code to token balances.

    In order to store data on Solana, a certain amount of SOL must be transferred as “rent” to the account. The amount to rent is directly proportional to the size of data stored in the account.

    Now, with the introduction of ZK Compression, creating new accounts on Solana will be cheaper “by orders of magnitude.”

    According to developer Light Protocol, the creation of 100 compressed user accounts that hold and track crypto balances (also known as token accounts) will be 5,000 times cheaper than creating 100 regular token accounts.

    Mert Mumtaz, co-founder and CEO of Helius Labs, said

    “Take an airdrop to 1,000,000 users. This today would cost over $260,000 for state alone. Now, it’s $50 — 5,200x cheaper. But a token account is just one example of this — *everything* on Solana is an account, meaning everything can be scaled.”

    Core Features of ZK Compression

    Here are the core features of ZK Compression, according to Light Protocol:

    • Minimal state cost – ZK Compression will store state on cheaper off-chain space instead of an expensive on-chain account on Solana.
    • Security – Data availability on Solana L1 will preserve security guarantees.
    • Composable – Solana will allow interaction between compressed accounts, regular accounts, and programs.

    Industry Reaction to ZK Compression on Solana

    The announcement of ZK Compression on Solana has been met with mixed reactions from the crypto industry.

    Many have lauded the technology for introducing a groundbreaking way to scale L1 blockchains, while others see ZK Compression on Solana as a L2 rollup under a different name.

    ZK Compression ‘Similar to Enshrined Rollups’, says Justin Bons

    Justin Bons, chief investment officer of Amsterdam-based crypto fund Cyber Capital, said ZK Compression has introduced a new way to scale monolithic L1 blockchains like Solana.

    According to Bons, ZK Compression will bring “all of the upsides of a roll-up without any downsides” to Solana.

    He added that the technology will allow Solana to scale without the side effects of L2 scaling, such as blockchain fragmentation, sequencer dependence, bridging, and multi-signature requirements, as seen in the Ethereum L2 ecosystem.

    Bons said that ZK Compression on Solana was a form of L1 scaling because the technology was enshrined into the L1.

    However… Ethereum Developer Calls ZK Compression “Ordinary”

    Elsewhere, Ethereum developer Ryan Berckmans called out ZK Compression developers Light Protocol and Helius Labs for spinning off a new “marketing term” and said that the product is “actually an L2.

    In a heated debate on X with Mumtaz of Helius Labs, Berckmans wrote:

    “For example, in your ZK Compression announcement, you said, “forget everything you know about L1 scaling” —  but actually the tech in the product, while cleverly leveraging Solana’s inexpensive L1 compute, is pretty ordinary stuff that has many parallels in existing and documented upcoming Ethereum scaling technologies.”

    Messari Analyst: ZK Compression Differs from L2 Rollups

    Micah Casella, senior research analyst at Messari shared his thoughts on the ZK Compression debate.

    Casella argued that ZK Compression is different from L2 scaling because in the former, transaction execution and state storage are conducted on the L1 chain.

    “With zk Rollups, execution, and state is on an ancillary chain — it just sends periodic commitments and proofs posted to the main L1,” said Casella.

    “In summary, it seems to really come down to where execution is conducted and state is located. In ZK Compression, it’s all on Solana,” added Casella.

    The Bottom Line

    The introduction of ZK Compression on Solana has yet again shone light on the distinctive routes taken by Solana and Ethereum towards scaling.

    The competition between Ethereum and Solana is now heating up. Not long ago, Ethereum held an unassailable lead against the so-called “Ethereum killers.

    But Solana has risen like a phoenix to emerge as a rival capable of challenging Ethereum’s dominance over the decentralized finance (DeFi) sector.

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    Mensholong Lepcha
    Crypto & Blockchain Writer
    Mensholong Lepcha
    Crypto & Blockchain Writer

    Mensholong is an experienced crypto and blockchain journalist, now a full-time writer at Techopedia. He has previously contributed news coverage and in-depth market analysis to Capital.com, StockTwits, XBO, and other publications. He started his writing career at Reuters in 2017, covering global equity markets. In his free time, Mensholong loves watching football, finding new music, and buying BTC and ETH for his crypto portfolio.