Understanding Validium and Its Role in Making Ethereum More Scalable in 2024

Understanding the role of Validium in Ethereum's scalability is crucial in the dynamic and fast-paced world of cryptocurrencies. As one of the most widely used blockchain platforms, Ethereum has embraced Validium, a layer-2 scaling solution that enhances its scalability. Validium processes transactions and stores data off the chain, significantly improving the mainnet throughput. This preventive mechanism plays a vital role in curbing theft and fraud during blockchain transactions, ensuring that users authorize every transfer from one account to another. By understanding Validium's role, Ethereum becomes more scalable and capable of handling the increasing demands of the cryptocurrency industry.

Scalability is a crucial factor in enhancing success in cryptocurrency’s dynamic and fast-paced world; and this is where validium comes in. With Ethereum being among the most used blockchain platforms today, Anthropic has innovated validium to improve its scalability. But what exactly is Validium, and how does it make Ethereum more scalable?

Validium is a blockchain layer-2 scaling solution used to process transactions and store data off the chain to improve the mainnet throughput. It’s a preventive mechanism that helps curb theft and fraud in blockchain transactions by ensuring that the user authorizes every transfer from one account to the other.

The technology provides Ethereum several benefits, including enhanced user privacy, lower transaction fees and faster transaction speed. It also eases congestion and improves security by using zero-knowledge proofs, which keep detailed data on transactions off the public blockchain.

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As the popularity and use of Ethereum continue to grow, its disadvantages and limitations are becoming more evident daily. However, Validium is here to solve these issues and take Ethereum to new heights by empowering users with efficient and seamless transactions.

According to a tweet by OriginStake, ‘the zkEVM Validium is an adapted version of Polygon’s zkEVM node and contracts that utilize Avail’s data availability blockchain instead of Ethereum. The zkEVM reduces the amount of data that needs to be posted to Ethereum by up to 90%.’

How Does Validium Work?

While looking into how this scaling solution works, we will discuss it in terms of how it handles various processes as follows:

Transactions

Through the validium chain, users submit the transaction to the operator, a node responsible for performing transactions. However, some might use a sole operator to execute the chain or depend on Proof-of-Stake (POS) to rotate the operators.

The operator combines the transactions into batches and transmits them for proving on a proving circuit. The proving circuit receives the batched transactions and additional relevant data as inputs and sends a validity proof to verify the correctness of these operations.

Statement Commitments

A valid state is hashed as a Merkle Tree by storing the root in the main contract on the Ethereum blockchain. This root, also called the state root, behaves like a cryptographic commitment to the current account state and balance available on the validium.

To update the state, the operator must create a new state root once done performing the transactions and then submit it to the contract on the chain. If validated, the proposed state is validated, and the new form is approved.

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Deposits and Withdrawals

To deposit, a user must move the funds from Ethereum to validium by depositing ETH or any other ERC-compatible token in the on-chain contract. This contract transmits the deposit operation off-chain, and the user’s account is credited with the amount. Additionally, the operator batches this transaction.

To withdraw to the mainnet, the user must initiate the transaction from the validium and submit it to the operator, where the transaction is validated and included in a new batch. However, users’ assets are eliminated before they exit the network. Once the batch’s validity proof is verified, the user can call the main contract to withdraw the initial deposit.

Sometimes, this L2 scaling solution allows direct withdrawals from the on-chain contract without going through the operator. However, the user must provide Merkel proof to verify the inclusion of the account in the state root.

Submission of Batches

Once done executing a batch of transactions, the operator transmits the validity proof to the verifier contract and recommends a new state root to the main contract. If the proof is validated, the main contract updates the state on the validium and finalizes the batched transactions.

Essentially, validium is a pure off-chain scaling protocol. Unlike zk-Rollups, which require block producers to publish transaction data, this scaling solution only requires block headers to publish transaction data.

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Validium as the Solution to Ethereum’s Scalability

Validium is providing specific solutions to the challenges faced by Ethereum, such as high fees, network congestion and scalability faced by Ethereum. Validium scales Ethereum in the following ways:

Lowering Transaction Fees

Making transactions via Ethereum is quite expensive due to the high gas fees charged per transaction. However, with validium, some transaction subsets can be performed off-chain, hence avoiding payment of gas fees. This helps users save money – regardless of how small the amount may seem.

Supporting Processing of Microtransactions

Validium facilitates the conduction of offline transactions, helping avoid higher per-transaction gas fees. This makes it viable to conduct microtransactions without paying crazy transaction fees. 

Boosting Platforms that Offer NFTS

Deployment of Validium on NFT platforms helps users buy and sell NFTs without paying high gas fees per transaction. The integration with NFT marketplaces makes these assets more accessible and thus eases economic difficulties regarding digital assets.

Easing Congestion in the Ethereum Network

Carrying out many Ethereum transactions on-chain creates network bottlenecks. With validium, it diverts some of the transactions, especially the micro-ones, off-chain to ease congestion on the main network.

Scaling Decentralized Applications (dApps)

Scaling dApps while maintaining security and decentralization is challenging. Validium gives Ethereum dApps a direct pipeline to facilitate off-chain processing of small crypto payments. This enables it to handle more transactions and users per second.

dApps aim to eliminate transaction fees and third parties in the crypto world. You can read more on dApps here!

Conclusion

Validium offers solutions to scalability issues in Ethereum. This protocol acts as a catalyst for transactions on the Ethereum blockchain by utilizing off-chain processing, zero-knowledge proofs, and verification of batches to improve transaction speeds, enhance user privacy and cut transaction fees. With its advantages and many use cases, validium has the potential to revolutionize blockchain technology and promote the adoption of dApps. 

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