Saving Money on Ethereum Transaction Fees| Bankless Africa Weekly Newsletter
This is the Bankless Africa Newsletter, your one-stop plug for well-curated and up-to-date crypto and web3 news around Africa.
Gm Bankless fam! It's a new month.
There have been many exhilarating events for web3 users this week. Sui was launched on mainnet, meme coins have been generating profits for users, and some users are speculating that the bull market has started. However, high gas fees on Ethereum remain a concern, with fees reaching up to $300. Fortunately, layer 2 solutions like ZK-rollups offer a solution to this problem.
In this issue, we explore the utility of ZK-rollups.
📻 Podcast of the Week
Today’s Podcast of the week is “Sui Network: Wetin dey sup.”
Our podcast pick aired last Sunday, and it is a special pidgin session with Crossvic and Bintuparis discussing the Sui ecosystem. They discussed sui not doing an airdrop to what makes Sui a fascinating layer 1, sui presale, and many updates that many will find interesting.
Enjoy and share your thoughts on Twitter.
Contributors: Bintuparis, Vibranty, and ViFi
ZK-Rollups and Gas Fees: How to Save Money on Ethereum Transactions
High gas fees have been a persistent issue for web3 users, especially on the Ethereum network. Every user wants fast transactions with low gas fees. To address this problem, we will be discussing ZK-rollups.
In our previous newsletter, we highlighted zkSync as one of the layer 2 scaling solutions that can help reduce gas fees without compromising security, thanks to zero-knowledge technology. It leads us to the question: what exactly are ZK-rollups?
ZK-Rollup is a layer-2 scaling solution that compresses many off-chain transactions into a single one, reducing data posted to Ethereum Mainnet and easing network congestion.
Understanding ZK-Rollups better
In 2021, Ethereum transaction fees surged to more than $300 per transaction, indicating a direct correlation between gas fees and the volume of transactions and the growth of dApps on the network. ZK-rollups are designed to solve the scalability issue on the Ethereum network.
By compressing the computation and data stored on the main chain, ZK-Rollups can scale Ethereum. In turn, blockchain congestion is reduced, resulting in faster transactions with cheaper fees.
How does zk-Rollups work?
ZK-Rollups compresses multiple off-chain transactions into one transaction, verified on the main chain using a SNARK (short non-interactive argument for knowledge). The transactions are signed by users and sent to layer 2 operators, also known as sequencers, for processing and addition to the next batch. The sequencers are responsible for organising transactions into batches and transferring them to layer 1.
Thanks to this process, validation is quicker and more cost-effective. Moving from layer 2 to layer 1 is done seamlessly with ZK-rollups, as the funds have already been verified through a validity proof authenticated by the zk-rollup contract.
Moreover, ZK-rollups are not susceptible to economic attacks that affect Optimistic rollups, making them a more secure option for scaling on Ethereum.
Relationship between ZK-Rollups and Gas Fees
Transaction fees on zk-rollups are determined by the gas fee, which operates differently on layer 2. Here are some of the factors that affect gas fees.
Fixed cost for writing to the Ethereum state: zk-rollups reduces costs by grouping or batching transactions and sharing fixed costs among multiple users.
Layer 2 operator fees: This is the compensation paid to the rollup operator for the computation cost in processing transactions, and it is similar to the miner fees on Ethereum.
Calldata: zkRollups issues state data for every transaction to Ethereum as Calldata, which affects the transaction fees.
Moreover, transaction batches must be proven valid, with the proof issued by zkRollup operators. This verification requires gas on the Ethereum Mainnet. zkRollups disseminate batches of transactions from layer 1 to layer 2, producing a validity proof for each batch. This process reduces the data size of transactions, thus lowering transactions' gas fees and reducing the verification time of the transactions.
In conclusion, zkRollups offer a promising solution to the issue of high gas fees on the Ethereum network. By compressing multiple transactions into a single one, zkRollups can help reduce blockchain congestion, resulting in faster and more affordable transaction fees. Furthermore, using zero-knowledge technology, zkRollups are a secure option for scaling on Ethereum.
🥁 African Adage
Adage: When the crocodile weeps, beware of the teeth.
Meaning: Just as a crocodile sheds tears to lure its prey, web3 influencers may put on a facade of remorse or apology to draw in more victims. Therefore, newbies should be careful not to trust them too quickly and to do due diligence before investing in any advertised projects. (Share as a tweet)
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Disclaimer: This post does not contain financial advice, only educational information. By reading this article, you agree and affirm the above, as well as that you are not being solicited to make a financial decision, and you in no way are receiving any fiduciary projection, promise, or tacit inference of your ability to achieve financial gains.