The Billion-Dollar Bottleneck of Expensive Crypto Transactions

The Billion-Dollar Bottleneck of Expensive Crypto Transactions | Opinion

The current challenges with Zero-Knowledge (ZK) rollups in cryptocurrency transactions primarily stem from the expensive proof generation process, leading to high fees and centralization issues. This article explores how a dual approach of specialized hardware and open markets could solve these problems, paving the way for cheaper, faster, and more decentralized transactions.

Key Takeaways

High transaction fees for ZK-rollups are primarily caused by the intensive process of generating zero-knowledge proofs.
Current proof generation relies heavily on expensive and inefficient hardware, leading to a centralized market of "prover farms" worth over $97 million.
Optimistic rollups offer alternatives but come with trade-offs, including long withdrawal delays.
Solutions include developing domain-specific ASICs and creating open prover markets to facilitate cheaper transactions.
The future of decentralized finance (DeFi) and the scalability of Ethereum depends on overcoming these engineering and economic challenges.

To solve the bottleneck problem, we need a global bazaar for proofs, where anyone contributes, everyone verifies, and the open web is secure.

Understanding the Fee Structure of ZK-Rollups

When making a transaction with ZK-rollups, there are several costs involved. The Layer 2 (L2) execution is nearly free, and posting data to the mainnet is inexpensive due to advancements like blobs, which cost only a fraction of a cent. However, the real expense lies in the proof generation. Producing a single proof for a batch of 4,000 transactions can take between two to five minutes on a high-performance A100 GPU, costing between $0.04 and $0.17 in cloud computing fees alone, which can easily increase during high demand periods.

It’s crucial to note that ZK proving differs significantly from the matrix calculations used in artificial intelligence. Instead, it's based on complex operations involving multi-scalar multiplications and number-theoretic transforms over elliptic curves, which are demanding for GPUs. Tests have shown that about 80% of a GPU's processing cycles can remain idle during this proof generation. A recent report noted that a significant portion of the revenue generated by zkSync was consumed by proofing costs, reinforcing the inefficiencies within the current system.

Optimistic rollups, which include popular solutions like Base, Arbitrum, and Optimism, offer another alternative but come with notable limitations. They require at least a seven-day withdrawal delay, which may be impractical in the fast-paced DeFi environment. While these rollups are useful for smaller transactions, they may fall short for larger financial assets and intricate use cases.

Thus, the key issue is that we're paying a high cost in both money and centralization to establish trust within the decentralized network. The expensive proving fees act as an economic anchor, limiting the adoption of ZK solutions. The solution we seek is one that revolutionizes proof generation to make it as inexpensive as execution.

The Danger of Centralization

Over 90% of ZK-rollups depend on a small number of "prover-as-a-service" companies, which introduces a significant risk of a single point of failure. For example, an incident in March 2025 where transactions were halted for 48 hours due to the actions of a central operator highlights the vulnerabilities within this centralized approach. Such centralization not only compromises security but also makes rollups vulnerable to outages and failures, further inhibiting growth.

The architecture's contradiction lies in the reliance on centralized data centers for L2 solutions, which are marketed as decentralized. As expressed by Vitalik Buterin at Devcon 2024, outsourcing proof generation can lead to scaling without achieving genuine decentralization.

Proposed Solutions

To address these concerns, a two-pronged solution is necessary. Firstly, we need specialized hardware, such as domain-specific ASICs, designed explicitly for ZK rollup proof generation. These chips can perform the required mathematical operations more efficiently than current GPU technology. The winners of the 2025 ZPrize competition achieved a remarkable reduction in the time needed to generate proofs, showcasing the potential of ASICs.

Secondly, we must shift away from traditional SaaS models and create an open marketplace for proof generation. In this framework, rollups would post jobs to Ethereum-based auctions, enabling specialized hardware to bid on tasks, thereby driving down costs and ensuring decentralization. Innovative networks like Brevis ProverNet have demonstrated that such models can greatly enhance computing speeds and reduce costs while maintaining open access.

Unlocking New Opportunities

By lowering the costs of proof generation, we could see transaction fees plummet to sub-$0.01 at high throughput rates, revitalizing the ZK ecosystem. This would enable developments in innovative applications such as pay-per-pixel NFTs, real-time gaming, and AI agents managing trades efficiently. L2 platforms would transition from centralized systems to unbiased infrastructure, allowing for unprecedented innovation and increasing the total value locked in ZK networks.

Ultimately, effective proof generation will empower users with speed and lower costs, while providing developers with a reliable platform devoid of dependence on a small circle of operators. With these advancements, Ethereum can achieve a scalable solution that upholds security without compromise.

The Challenge Ahead

The primary challenge to ZK adoption isn't found in the crypto or gaming sectors but in the engineering economics of proof generation. To advance, we must build a decentralized and accelerated proving infrastructure that facilitates affordable, trustless transactions for millions of users.

The vision is clear: we need a global marketplace for proof, inviting everyone to contribute and ensuring everyone can verify, building a secure and open web for the future of cryptocurrency.