Why is it said that Ethereum may return to the PoW era?

Author: Yue Xiaoyu

Founder of Web3Caff, Gootor, put forward a very important point, and here are some further thoughts to share:

Ethereum is being zk-SNARKed, and the zk-SNARK verifier requires hardware acceleration, similar to BTC Mining's hardware dependency, so ZK Mining may become a new type of PoW.

The economic model of Ethereum may eventually evolve into a new 'hybrid Consensus' mode, with both PoS and PoW coexisting.

Next, let's take a closer look at the underlying logic of the above-mentioned concept.

1. Ethereum is being ZKified

The basic principle of ZK (Zero-Knowledge Proof) is that one party can prove to another party that a statement is true without providing any other information.

This is a very promising technology.

ZK technology is currently mainly used for scaling in the blockchain field.

V God has been promoting ZK technology, and due to V God's will and inclination, the Ethereum Foundation has also invested in various ZK projects.

However, the construction period of ZK projects is relatively long, so what ordinary users can directly perceive at present is various ZK Rollups, that is, the ZK-based Ethereum Layer2 solution.

Typical representatives include zkSync, Starknet, Polygon zkEVM, Scroll, Linea, etc.

These are all ZK technology integrated in the execution layer of Ethereum.

And ETH itself is also gradually ZK-ing.

Consensus Layer ZKification (e.g., Beam Chain Proposal): By ZKifying the verification process of Consensus operations, the Consensus process can be simplified and accelerated.

Data Layer ZK: Only store proofs instead of all transaction data, which can significantly reduce on-chain storage requirements.

By these means, the Ethereum can significantly improve the performance of its network, including transaction processing speed, cost, and privacy protection while maintaining its Decentralization and security.

The introduction of ZK technology is seen as part of ETH's long-term ecosystem expansion strategy to address higher user demand and application complexity.

2. Why does ZK need to be combined with hardware?

The above mentioned ZK has many advantages, but the biggest obstacle ZK currently faces is the performance issue of generating ZKP (Zero-Knowledge Proofs).

The operation mechanism of ZK is to make validators merge multiple transactions into a single, concise proof, and then submit the transactions to Mainnet, ultimately achieving the scalability of Mainnet.

However, ZK also has limitations because the process of generating proof is very resource-intensive in terms of time and effort.

Proof creation is typically slowed down due to the need for many complex mathematical computations, such as exponentiation, inverse operations, and bilinear pairing calculations.

Simply relying on software optimization cannot further improve performance, so it needs to be combined with hardware. By using dedicated hardware for acceleration, the proof generation speed can be increased from hours to seconds, which will be a huge improvement.

Therefore, ZK has hardware dependencies and requires dedicated chips.

As ZKP technology is increasingly used in privacy computing, blockchain scalability, and other fields, the generation speed and efficiency of ZKP have become bottlenecks, and the market demand for hardware is also growing stronger.

3. How to combine PoS and ZK Mining?

If ZK hardware acceleration is used, hardware Mining can be achieved, which introduces a new economic model.

What is ZK Mining?

Traditional PoW (Proof of Work) Mining relies on solving complex mathematical problems, while ZK hardware Mining is the ability to quickly generate ZKP.

Similar to PoW Mining, participants can compete for the speed and efficiency of generating ZKP, and the participant who first generates a valid proof will be rewarded.

How does PoS and ZK specifically combine?

In the PoS system, validators are responsible for validating transactions and proposing new Blocks. ZK proofs can be used to prove the correctness of a Block or a series of transactions, enhancing security and lowering verification costs.

Validators generate ZKPs as additional proof of their work while performing their PoS duties. Validators who successfully generate and submit valid ZKPs can receive additional rewards in addition to the existing Block rewards.

This can be ETH or some form of reward within the network (such as a specific Token or a portion of Gas fees).

Mainnet Block rewards can be divided into two parts, forming a layered reward system: one part of the rewards is used for traditional PoS validation, and the other part is allocated based on the contribution of Nodes in ZK proof generation.

From this, it can be seen that ZK can be used as an enhancement for PoS validation, and ZK Mining can be used as an extension of PoS stake.

In addition to staking ETH to earn PoS rewards, stakers can also earn additional rewards by participating in ZK-related work. For example, stakers can run ZK proof generation nodes, provide computing resources to support the application of ZK technology.

However, this is just a possibility. If we want to integrate ZK technology into the existing PoS mechanism of Ethereum, we need to modify or expand the current PoS protocol to accommodate the role of ZK proofs.

And a fair incentive model must be designed to ensure that it does not weaken the incentive effect of PoS and promotes the application of ZK technology.

4. Will ZK Mining introduce new positive externalities?

One of the most criticized aspects of Ethereum's transition from PoW to PoS is the lack of externalities introduced into this 'closed' economic system.

PoW is an externality that requires energy and hardware, thereby extending the economic activity of the blockchain to the outside of the blockchain and affecting the real world.

In the PoS system, the qualification for validating Blocks is mainly based on the amount of Tokens held (i.e. stake), with economic activity more focused on stake and internal network transactions, rather than involving extensive external industries such as Mining Rig production and the power market as in PoW.

Like PoW Mining Rig, ZK acceleration hardware requires dedicated hardware, but the issue of 'ineffective power consumption' will be dropped because PoW is about solving mathematical problems to compete for block rights, while ZK Mining generates valid proofs to verify transactions, without requiring different Nodes to do repetitive ineffective work.

5. AI and ZK share Computing Power

Furthermore, there will be a ZK Computing Power market, and even the possibility of sharing AI Computing Power and ZK Computing Power.

There may be a comprehensive computing service integration platform on the market, supporting the computing needs of AI and ZK tasks.

Users can handle AI tasks that require high-performance computing and tasks that require ZK proof generation on the same platform.

The protocol level can also be integrated: create a smart contract or protocol, so that AI Computing Power providers can also participate in the generation of ZK proofs, or use ZK technology to verify the results of AI calculations.

Computing Power can also be dynamically allocated: Computing Power resources can be dynamically allocated according to task requirements. For example, when AI tasks require low Computing Power, these resources can be used to generate ZK proofs, and vice versa.

6. ZK, the leading player in hardware acceleration

Currently, Cysic is the leading project in the ZK hardware acceleration track.

Cysic focuses on designing and manufacturing Application-Specific Integrated Circuits (ASIC), Field-Programmable Gate Arrays (FPGA), and GPU acceleration solutions to accelerate the generation process of ZKP.

Cysic has designed two hardware products:

ZK Air: A lightweight ZK device, with a size close to a laptop power adapter, computing power equivalent to 10 RTX 4090 GPUs, suitable for individual users.

ZK Pro: More powerful devices, equivalent to 50 RTX 4090 GPUs in performance, designed for large-scale ZK projects such as zkRollup and zkML.

In addition to the hardware, Cysic also provides a trap CUDA library that supports a variety of ZKP systems such as Plonky2, Gnark, Halo2, RapidSnark, etc. These libraries can greatly improve performance and increase it by at least 50% compared to Open Source frameworks.

At the same time, Cysic has an ecosystem, Cysic Network, which is mainly designed to integrate and manage community computing resources, connect ZK project party, computing power providers, and community validators, forming a reliable computing power network.

Simply put, Cysic Network is a ZK Mining Pool and SaaS platform.

Currently, Cysic has collaborated with multiple zkRollup projects, demonstrating the practicality and market demand of its products.

In addition to Cysic, there is another very distinctive project to mention: Scroll

I didn't expect that Scroll, which is notorious for 'alienating the crowd' and 'infamy', is very advanced in ZK hardware acceleration.

Compared with other ZK Rollup projects, Scroll can be said to take a different approach, starting from hardware and forming its own competitive barrier by developing dedicated ZK acceleration hardware GUP, which is also Scroll's biggest differentiation competitive advantage.

Just looking at this point, Scroll is indeed a hardcore project.

However, the positioning of Scroll and Cysic is different: for Scroll, hardware acceleration is part of its Layer2 overall solution; while Cysic is dedicated to providing hardware acceleration services for the entire ZKP ecosystem.

7. Summary

Finally, summarize the content of this article:

Ethereum is ZK-ing: Ethereum is implementing scalability and enhancing privacy by introducing Zero-Knowledge Proof (ZK) technology, which has been applied in the consensus layer and Data Layer to improve network performance.

ZK requires hardware acceleration: Due to the high computational cost of generating Zero-Knowledge Proofs, hardware acceleration (such as ASICs, FPGAs) is considered a necessary means to improve efficiency.

The combination of PoS and ZK Mining: A new economic model is proposed, which integrates ZK Mining as an extension of PoS. Stakers obtain additional rewards by providing ZK computational power, forming a coexistence of PoS and PoW.

ZK Mining introduces a new positive externality: compared to PoW, ZK Mining may reduce invalid energy consumption, but still requires specialized hardware, bringing incentives for hardware production and technological innovation.

AI and ZK computing tasks may share hardware resources to form a comprehensive computing service market.

Market-leading projects: Cysic and Scroll are leaders in the ZK hardware acceleration field, with the former focusing on providing hardware for the ZK ecosystem, and the latter incorporating it as part of its Layer2 solution.

Finally, the ZK hardware acceleration track has begun to emerge. With the further ZK-ization of Ethereum, ZK hardware acceleration will become even more important and may even reverse the economic model of Ethereum. It is worth our continuous follow-up on this track.