Ethereum’s economic model may eventually evolve into a hybrid Consensus model, with both PoS and PoW coexisting.
Author: Yue Xiaoyu
Web3Caff founder Gootor has put forward a very important point, and here are some further thoughts to share:
ETH is ZK-ing, and the ZK prover requires hardware acceleration, just like BTCMining, so ZK Mining may become a new type of PoW.
The economic model of Ethereum may eventually become a new ‘hybrid Consensus’ mode with the coexistence of PoS and PoW.
Next, let’s take a closer look at the underlying logic of the above-mentioned concept.
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1, ETH 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 additional information.
This is a very promising technology.
ZK technology is currently mainly used for scaling in the blockchain field.
V God has been actively promoting ZK technology, and due to V God’s willingness and inclination, the Ethereum Foundation has also invested in various ZK projects.
But the infrastructure layer of ZK projects has a relatively long cycle, so what ordinary users can directly perceive at present are various ZK Rollups, namely ZK-based Ethereum Layer2 solutions.
Typical representatives include zkSync, Starknet, Polygon zkEVM, Scroll, Linea, etc.
These are all fused with ZK technology in the execution layer of Ethereum.
And Ethereum itself is also gradually ZK-ing.
(1) Consensus Layer ZKification (e.g., Beam Chain Proposal): By ZKifying the verification process of Consensus operations, the Consensus process can be simplified and accelerated.
（2）Data Layer ZK: Only store proofs instead of all transaction data, which can significantly reduce on-chain storage requirements.
Through these means, 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, which can cope with higher user demand and application complexity.
2. Why does ZK need to be combined with hardware?
The above mentioned a lot of advantages of ZK, but the biggest obstacle currently facing ZK is the performance issue of generating ZKP (Zero-Knowledge Proofs).
The operation mechanism of ZK is to enable validators to merge multiple transactions into a single and concise proof, and then submit the transactions to the Mainnet, ultimately achieving Mainnet scalability.
However, ZK also has limitations, as the process of generating proofs is very resource-intensive in terms of time and effort.
Due to the need for many complex mathematical operations, such as power operations, reciprocal operations, and bilinear pairing calculations, proof creation is often slowed down.
Simply relying on software optimization cannot further improve performance, so it is necessary to combine hardware and use dedicated hardware for acceleration, which can increase the proof generation speed from hours to seconds, which will be a huge improvement.
Therefore, ZK has hardware dependencies and requires dedicated chips.
As ZKP technology is gradually applied in privacy computing, blockchain extension and other fields, the generation speed and efficiency of ZKP have become bottlenecks, and the market’s demand for hardware is also increasingly strong.
3. How does PoS combine with ZK Mining?
If ZK hardware acceleration is used, hardware Mining can be achieved, which creates 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 to generate ZKP at a faster and more efficient rate, and participants who generate valid proofs first will be rewarded.
How exactly do PoS and ZK combine?
In the PoS system, validators (i.e. validators) are responsible for validating transactions and proposing new Blocks. ZK proof can be used to prove the correctness of a Block or a series of transactions, enhance security, and reduce validation costs.
validators, while performing their PoS duties, generate ZKP as additional proof of their work. validators who successfully generate and submit valid ZKP can receive additional rewards beyond the existing Block Reward.
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 hierarchical reward system: one part of the rewards is used for traditional PoS verification, and the other part is allocated based on the contribution of Nodes in ZK proof generation.
This shows that ZK can enhance PoS verification, while ZK Mining can serve as an extension of PoS stake.
In addition to staking ETH to receive PoS rewards, stakeholders can also earn additional rewards by participating in ZK-related work. For example, stakeholders can run ZK proof generation nodes, providing computational resources to support applications 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 extend the current PoS protocol to accommodate the role of ZK proofs.
And a fair incentive model must be designed to ensure that it not only does not weaken the incentive effect of PoS, but also 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 that there is no external input 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 world, affecting the real world.
In the PoS system, the qualification to validate 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 electricity markets as in PoW.
ZK acceleration hardware, like PoW Mining Rig, requires dedicated hardware, but the issue of ‘invalid power consumption’ will be dropped because PoW competes to solve mathematical problems to win the right to mine, while ZK Mining generates valid proofs to verify transactions without the need for different Nodes to perform repetitive invalid labor.
5. AI and ZK Share Computing Power
Furthermore, there will be a ZK Computing Power market, and even the sharing of AI Computing Power and ZK Computing Power can be realized.
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 requiring high-performance computing and tasks requiring ZK proof generation on the same platform.
Integration can also be done at the protocol level: creating Smart Contracts or protocols, allowing AI Computing Power providers to participate in the generation of ZK proofs, or using ZK technology to verify the results of AI computation.
Computing Power can also be dynamically allocated: Computing Power resources can be dynamically allocated according to task requirements. For example, when the AI task demand is low, these resources can be used to generate ZK proofs, and vice versa.
6. ZK’s top player in hardware acceleration
Currently, Cysic is the leading project in the ZK hardware acceleration field.
Cysic focuses on the design and production of Application-Specific Integrated Circuit (ASIC), Field-Programmable Gate Array (FPGA), and GPU Acceleration Solutions to accelerate the generation process of ZKP.
Cysic designed two hardware products:
(1) ZK Air: A lightweight ZK device, with dimensions similar to a laptop power adapter and computing power equivalent to 10 RTX 4090 GPUs, suitable for individual users.
(2) ZK Pro: More powerful equipment, performance equivalent to 50 RTX 4090 GPUs, designed for large ZK projects such as zkRollup and zkML.
In addition to hardware, Cysic also provides a trap CUDA library that supports various ZKP systems such as Plonky2, Gnark, Halo2, RapidSnark, etc. These libraries can greatly improve performance, increasing at least 50% compared to the Open Source framework.
At the same time, Cysic has an ecosystem, Cysic Network, mainly 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 for its products.
In addition to Cysic, there is another very distinctive project to mention: Scroll
Unexpectedly, Scroll, known for its ‘divisiveness’ and ‘infamy’, is at the forefront of ZK hardware acceleration.
Compared with other ZK Rollup projects, Scroll can be said to take a different approach, starting from hardware and developing its own competitive barrier by developing dedicated ZK acceleration hardware GUP. This is also Scroll’s biggest differentiating competitive advantage.
Just from this point of view, Scroll is indeed a pretty 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, to summarize the content of this article:
(1) ETH is being ZK-ified: Ethereum is implementing scalability and privacy improvements by introducing Zero-Knowledge Proof (ZK) technology, which has already been applied in the consensus layer and Data Layer to enhance network performance.
(2) ZK requires hardware acceleration: Due to the large amount of computational resources required to generate Zero-Knowledge Proofs, hardware acceleration (such as ASIC, FPGA) is considered a necessary means to improve efficiency.
（3）The combination of PoS and ZK Mining: a new economic model is proposed, which takes ZK Mining as an extension of PoS. Stakers obtain additional rewards by providing ZK computational power, forming a coexistence of PoS and PoW.
(4) 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.
(5) AI and ZK Computing Power Sharing: AI and ZK computing tasks may share hardware resources, forming an integrated computing service market.
(6) 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 integrating it as part of a Layer2 solution.
Finally, the ZK hardware acceleration track has begun to take shape. With further ZKification of Ethereum, ZK hardware acceleration will become even more important, and may even change the economic model of Ethereum in Reverse, which is worth our continuous follow-up on this track.
