Zero-knowledge proofs (ZKPs) are cryptographic protocols that allow one party (the prover) to prove to another (the verifier) that a statement is true—without revealing any underlying information. First introduced in the 1980s by Goldwasser, Micali, and Rackoff, ZKPs have become foundational to privacy-preserving technologies in blockchain. They satisfy three core properties: completeness (if the statement is true, the verifier will be convinced), soundness (if the statement is false, the verifier won’t be fooled), and zero-knowledge (no additional information is revealed).
There are two dominant types of ZKPs in blockchain: zk-SNARKs (Succinct Non-Interactive Arguments of Knowledge) and zk-STARKs (Scalable Transparent Arguments of Knowledge). zk-SNARKs are compact and efficient but require a trusted setup, which introduces a centralization risk. zk-STARKs, on the other hand, are transparent, post-quantum secure, and do not require a trusted setup, though they tend to produce larger proof sizes.
zkSync and Starknet: Layer 2 Scaling with ZKPs
Two of the most prominent Layer 2 solutions leveraging ZKPs are zkSync and Starknet, both designed to scale Ethereum by processing transactions off-chain and submitting succinct validity proofs to the mainnet. zkSync, developed by Matter Labs, uses zk-SNARKs and emphasizes EVM compatibility, low fees, and fast finality. It supports a growing ecosystem of DeFi apps and NFTs, with zkSync Era and zkSync Lite collectively securing over $300 million in total value locked (TVL).
Starknet, developed by StarkWare, uses zk-STARKs and focuses on scalability and security without a trusted setup. It supports native account abstraction and bundles user operations into efficient multi-call transactions. While Starknet is less EVM-compatible than zkSync, it offers stronger cryptographic guarantees and is optimized for long-term scalability.
Use Cases: Privacy, Identity, and Regulatory Compliance
ZKPs are unlocking powerful use cases across DeFi, digital identity, and compliance. In DeFi, ZKPs enable private transactions where sender, receiver, and amount remain confidential—without sacrificing verifiability. Projects like Aztec Network and Zcash have pioneered this approach, allowing shielded transactions that are fully encrypted yet provably valid.
In identity, ZKPs enable zero-knowledge KYC (zkKYC), where users can prove attributes (e.g., age, residency, income) without revealing the underlying documents. This is particularly useful for decentralized finance and CBDCs, where regulatory compliance must coexist with user privacy. zkKYC models are being explored using decentralized oracle networks and self-sovereign identity frameworks.
ZKPs vs. Optimistic Rollups: Trade-offs in Layer 2 Design
While both ZK-rollups and optimistic rollups aim to scale Ethereum, they differ fundamentally in design. Optimistic rollups assume transactions are valid by default and rely on a fraud-proof window (typically 7 days) for dispute resolution. This makes them simpler to implement and more EVM-compatible, but slower in finality and vulnerable to censorship during the challenge period.
ZK-rollups, by contrast, use cryptographic validity proofs to confirm transaction correctness before posting to Ethereum. This results in faster finality (minutes), stronger security, and potential for private transactions. However, ZK-rollups are more complex to develop and often require specialized tooling. Vitalik Buterin has noted that while optimistic rollups may dominate in the short term, ZK-rollups are likely to win in the long run as the technology matures.
Enhancing Scalability and Interoperability
ZKPs also enhance scalability by enabling rollups—bundled transactions that are verified in bulk. This reduces on-chain data load and dramatically lowers gas fees. For example, zkSync can process thousands of transactions per second with fees a fraction of Ethereum’s Layer 1 costs. Starknet’s architecture further optimizes throughput by compressing user operations and leveraging native account abstraction.
Beyond scalability, ZKPs facilitate cross-chain interoperability. By generating proofs that can be verified across different chains, ZKPs help bridge fragmented ecosystems and enable seamless asset transfers and data sharing. This is crucial for building a truly interconnected Web3, where users and applications can move freely across networks without compromising security or privacy.
From Theory to Infrastructure: The ZKP Adoption Curve
As ZKPs move from academic theory to production-grade infrastructure, their impact on blockchain is becoming undeniable. From privacy-preserving DeFi to scalable Layer 2s and compliant identity systems, ZKPs are reshaping how trust, privacy, and efficiency coexist in decentralized networks. With continued innovation in zk-SNARKs, zk-STARKs, and hybrid models, zero-knowledge technology is poised to become a foundational layer of the next-generation internet.
Shogun Lin
