What is Validium? overview

Validium, rollups and similar scaling needs arise because as the popularity of Ethereum grows, the need for scalable solutions also begins to increase.
It is not surprising that the popularity of Ethreum, which has a first mover advantage in the decentralized applications (dApp) ecosystem, increased especially after the ETH merge. But as the saying goes, with great power comes great responsibility, or in Ethereum's case, scalability challenges. In this context, solutions such as Validium, aggregations, and zero-knowledge proofs have begun to increase.

Scalability here is not about Ethereum's ambition, but rather its ability to process transactions and sustain the expanding dApp community without an increase in gas fees. Every action on Ethereum comes with a fee tag, whether it's a small transfer or an NFT mint. These are gas fees that encourage behind-the-scenes validators to prioritize our transactions. As more users use the Ethereum network, transactions begin to slow down and fees rise; This is a difficult situation not only for ordinary users, but also for large corporate players and the developer community.

This has led to many different scaling solutions developed by talented groups of people around the world, each offering a unique way of providing greater scalability on Ethereum; Including companies like Polygon, Optimism and Arbitrum.

Ethereum's Scaling Options;

As Ethereum's popularity grew, the need for scalable solutions became urgent.

So why are there so many scaling solutions needed? Various solutions reduce congestion on a single node, ensuring there is no single breaking point. Ultimately, relying on a single method will not be enough to realize Ethereum's grand vision.

Scaling solutions are categorized into two parts:

On-Chain Scaling
Off-Chain Scaling

On-Chain Scaling ;

It involves changing the core structure of Ethereum.

sharing

Sharding means splitting the database. Sharding slices the Ethereum network, enabling simultaneous processing of transactions and smart contracts between shards. Imagine a workplace where workers are grouped together and each solves a part of the problem, resulting in faster answers. Ethereum has long focused on fragmentation. But as Layer 2 aggregations have become popular, the focus has shifted from sharding to an aggregation-dominated scaling approach.

Off-Chain Scaling

This is more like building an addition to your own home, adding value to your structure without altering the original structure. These methods, such as Aggregations and Status Channels, are implemented without modifying the Layer 1 Main Network. On the other hand, scaling solutions such as Sidechains, Validiums and Plasma chains exchange data with the Mainnet.

side chains

Side chains are like highways that are connected but distinct from the main city. They are similar to Ethereum parallel blockchains, they operate independently but can be synchronized when necessary. Like secondary highways adjacent to a major highway, they help relieve traffic, providing smoother journeys on the main route. They have their own consensus mechanism, which means that in the event of a security breach, the main network will not be affected. Developers can increase transaction speed and reduce gas fees by using sidechains.

However, this interdependence also brings risks. Because of this distinction, sidechains do not have the security features of Ethereum. This important clear distinction can compromise security for greater scalability, making sidechains more susceptible to vulnerabilities.

State channels

Consider having a separate express lane where two people can make a quick exchange and then finalize their business on the main road. In short, this is the state channels. They ensure that the core network does not become clogged by allowing fast, off-chain exchanges that eventually settle on the Ethereum mainnet.

Plasma

Separate but connected to the main Ethereum chain, these chains use fraud proofs, such as those used by optimistic rollups, to resolve any discrepancies or disputes.

Aggregations

It has always been crucial to seek balance between scalability and security in blockchain. Aggregations are exactly that. Aggregations process transactions away from the main (off-chain) chain but maintain transparency by sending transaction data to the main chain.

There are basically two types of aggregations: Optimistic Aggregations and Zero-Knowledge Aggregations, commonly known as zk-Aggregations. The first works on the “trust but verify” principle, assuming that every transaction is legitimate until proven otherwise. In contrast, zk-Rollups take a more proactive approach. They use advanced cryptographic proofs (ZK Snark and ZK Stark) to guarantee the validity of a transaction before it touches the main chain.

The innovation of rollups has brought Ethereum one step closer to solving the scalability trilemma and provided a glimpse into a more scalable network. However, while rollups address some scalability issues, they also highlight the constant tug of war between scalability, security, and decentralization

What is Validium?

The process towards a more scalable Ethereum did not end with these solutions. We also have Validium. By gaining insights from both sidechains and aggregations, Validium addresses not only scalability but also security and decentralization concerns.

When calculating transactions such as aggregations, Validium does not send transaction data to the main Ethereum chain. Instead, it uses Zero Knowledge Proofs (ZKPs) to verify these off-chain transactions without revealing specific details.

So how does Validium work?

When a series of transactions occur off-chain in Validium, a ZKP is generated for these transactions, which acts as an honesty certificate. However, the proof does not have any specific transaction data when sent to the Ethereum blockchain. Ethereum's primary network then cross-checks this proof, confirming the authenticity of off-chain processed transactions.

Simply put, think of Validium as a system that borrows from ZKP builds in terms of using proofs of validity, but differentiates itself by not storing data on the primary Ethereum chain.

Validium can process a large number of transactions (up to 10 thousand per second) without overloading the main Ethereum network. Multiple Validium chains can be run simultaneously.

What are the powers gained with Validium?

Scalability:

Aggregations and sidechains have limitations when it comes to scaling, primarily constrained by the data bandwidth of the Ethereum Mainnet. Validiums significantly increase throughput by reducing Ethereum's data processing load.

Security:

Valiums are safer than sidechains when using proofs of validity.

But most validiums do not work well with EVMs; This means they are generally only good for simple tasks like moving tokens or creating NFTs.

Creating an EVM compatible validium is the best of both worlds; It has the ability to provide greater scalability and security, as well as being flexible enough to perform all EVM operations and use all existing tools and applications in the EVM space. Incorporating ZKPs to verify transactions eliminates certain limitations, such as periods of difficulty, seen in other scaling solutions such as aggregations.

Real World Effects of Validium;

Developers
For developers, the zkEVM Validium model opens the door to new possibilities. They can now develop and deploy applications on Polygon with greater scalability and security assurance, similar to Ethereum, but without the high transaction fees and slow transaction times.

Decentralized Finance (DeFi)
Validium offers a convenient solution to high transaction fees and slow transaction times on DeFi platforms. The same can be said for blockchain-based games and NFT marketplaces. For example, a blockchain-based game can leverage Validium for fast in-game transactions. Similarly, NFT marketplaces can make NFT trading less cumbersome by offering a more streamlined user interface.

Supply Chain and Beyond
The supply chain industry, which requires a transparent and efficient system to track and verify the movement of goods, can also benefit from Validium's scalability and security features. Improved transaction processing capacity can streamline supply chain operations by providing real-time updates and verification.

What are the Challenges of Validium?

Data availability:

One of the main challenges facing Validium is the issue of data availability. By design, Validium processes transactions off-chain and only sends proofs of validity to the main chain. This raises questions about how to ensure off-chain data is always accessible and verifiable while improving speed. The goal is to have robust systems that guarantee the availability and accuracy of data, preserving the main features of blockchain: transparency and trust.

Becoming Widespread and Accepted:

Every new blockchain technology faces a similar problem of how to make it user-friendly and widely used. The situation is no different in Validium. Validium's benefits should not be limited to technical terms; They must be available to users. It is also important to ensure that Validium's benefits are not limited to technical jargon but translated into tangible improvements in user experience. This includes improving user experience, providing education, and outreach to ensure more people understand and use the platforms powered by Validium.

Ethereum's growth is undeniable, but its challenges are also undeniable. We need to think about how we can make blockchain easier and better for everyone at the same time. Thanks to solutions like Validium and rollups, we have a bright future ahead of us. As we work on these solutions, we are not only solving problems, but also shaping the future of online transactions.
There will be a future where using blockchain will be as easy as sending a message; We are moving towards this potential.