Blockchain Technology: Solana’s ZK Solves Cost and Scalability Issues

Solana introduced zero-knowledge (ZK) compression, a cutting-edge technology that minimizes transaction costs by up to 5,000 times and improves scalability while preserving the interoperability of Solana’s Layer 1 (L1) network.

Let’s explore why it is considered the next significant development in the blockchain ecosystem.

ZK compression reduces costs

Light Protocol AND Helius Laboratories they created a feature called ZK Compression on the Solana network. Millions of users and developers can build large-scale applications without the usual burdensome costs and scalability constraints by compressing their state on-chain.

Developers and users can choose to compress their state on-chain, reducing state costs by orders of magnitude while preserving the security, performance, and composability of Solana L1 compression.​ZK

ZT technology achieves this through “state compression”, which allows users to do so store various types of data in a low-cost Solana-based registry instead of an expensive account to reduce the costs associated with creating tokens and accounts.

Store a hash of data off-chain for verification to minimize storage costs and ensure data integrity.

Light Protocol claims that through ZK compression, the price of creating a 100 byte file Program Derived Address (PDA) decreased 160 times: from $SOL 0.00001 to $SOL 0.0016.

PDA accounts are like smart contracts. They are critical for data storage and management of Solana-based dApps.

Solana token accounts also benefit from it. For example, the expenses associated with managing 100 token accounts decrease From $SOL 0.2 to just $SOL 0.0004a 5,000-fold cost reduction.

Also the founder of Helius Labs, Mert Mumtaz highlighted on X that prices for large-scale operations like launches in the millions could plummet from $260,000 to $50.

These drastic cost reductions apply to all aspects of the Solana ecosystem because each Solana-based entity is treated as an account for international scaling. This way, much less data is added to the state of the chainsaving on storage costs.

Economically scalable without obstacles L2

Implementing ZK compression on L1 has advantages beyond cost minimization. Developers and users can now scale and build any application on Solana without the need for additional layers.

Unlike Layer 2 (L2) solutions, ZK Compression does not require a governance token, chain ID switch, or a security board. Instead, it maintains high performance in an existing system while eliminating the need for central authorities.

While some users on an L2 without all the things people complain about the L2.’

Wrap

From the beginning of 2023, Solana’s TVL increased by 20805.71% from $210 million to $44 billion, showing significant growth in the network’s DeFi activity.

ZK Compression brings Solana’s vision of being “The Financial Computer” one step closer to reality because it allows developers to create dApps and DeFi projects without high costs and capacity limitations.

In particular, these architectural differences will not impact Solana APIs because they won’t change the way developers work with the network. Rather, it will save them transaction and implementation costs.

Solana is ready to attract more businesses and developers who want it create large-scale blockchain projects through ZK, which could lead to wider adoption and innovation on the network, especially if Solana ETFs are on the horizon.

Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile and high-risk asset class.

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