Bitcoin Magazine: What challenges does Rollup face?

Source: Bitcoin Magazine; Translation: Wuzhu, Golden Finance

Rollups have recently become the focus of BTC scaling, becoming the first thing to really “steal the show” from the Lighting Network, in terms of broader attention. Rollups are designed to be an off-chain layer 2 that is not constrained or restricted by the Lighting Network’s core Liquidity limitations, i.e. the end user needs someone to allocate (or “lend”) the funds in advance to receive the money, or the intermediate routing node needs the channel balance to facilitate the full flow of the payment amount from the sender to the receiver.

These systems were initially running on Ethereum and other Turing Complete systems, but recently the focus has shifted to porting them to UTXO-based blockchains (such as BTC). This article is not intended to discuss the current status of implementation on BTC, but to discuss the idealized functionality of Rollup that people have been pursuing for a long time, which depends on the functionality not currently supported by BTC, namely the ability to directly verify Zero-Knowledge Proof (ZKP) on BTC.

The basic architecture of Roll is as follows: a single account (UTXO in BTC) stores the balances of all users in the Rollup. This UTXO contains a commitment, which exists in the form of the Merkle root of the Merkle tree, committing all current balances of existing accounts in the Rollup. All these accounts are authorized using Public Key/Private Key pairs, so in order to make off-chain expenditures, users still need to sign certain content using the Secret Key. This part of the structure allows users to exit at any time without permission, by simply producing a transaction proving that their account is part of the Merkle tree, they can unilaterally exit the Rollup without the permission of the operator.

The operator of Rollup must include a ZKP in the transaction to update the merkle root of the on-chain account balance during the process of completing off-chain transactions. Without this ZKP, the transaction will be invalid and cannot be included in the Blockchain. This proof allows people to verify whether all changes to the off-chain account are properly authorized by the account holder, and whether the operator has not maliciously updated the balance to steal user funds or dishonestly reallocate them to other users.

The question is, if only the root of the Merkle tree is published on-chain, and users can view and access it, how can they put their branches in the tree so that they can exit without permission whenever they want?

Suitable Rollup

In the appropriate Rollup, each time a new off-chain transaction is confirmed and the state of the Rollup account changes, the information is directly put on the blockchain. Not the entire tree, that would be ridiculous, but the information needed to rebuild the tree. In a simple implementation, the summary of all existing accounts in Rollup will include the balance, and the account will only be added in the updated transactions of Rollup.

In a more advanced implementation, use balance differences. This is essentially a summary of which accounts have added or reduced funds during the update process. This allows each Rollup update to only include changes in account balances that have occurred. Then, users can simply scan the chain and ‘calculate’ from the beginning of the Rollup to determine the current state of account balances, allowing them to reconstruct the Merkel tree of the current balance.

This saves a lot of expenses and Block space (saving money) while still allowing users to ensure access to the information required for unilateral exit. Rollup rules require that this data be included in the formal rollup provided to users using the Block chain, and transactions that do not include account summaries or account differences are considered invalid transactions.

Expiration date

Another way to address the issue of user withdrawal data availability is to store the data elsewhere outside the Block chain. This introduces subtle issues as rollup still needs to enforce the availability of the data elsewhere. Traditionally, other Block chains are used for this purpose, specifically designed as data availability layers for systems like rollup.

This creates a dilemma where security is equally strong. When data is directly published to the BTCBlock chain, the Consensus rules can ensure that it is absolutely correct. However, when it is published to an external system, the best it can do is to verify the SPV proof, which means that the data has been published to another system.

This requires verifying that the data exists on other on-chain proofs, which ultimately is an Oracle Machine problem. The BTC Block chain cannot fully verify anything other than what happens on its own Block on-chain, and the best it can do is to verify ZKP. However, ZKP cannot verify whether the Block containing rollup data is actually publicly broadcast after it is generated. It cannot verify whether external information is truly accessible to everyone.

This opens the door to data withholding attacks, creating commitments to published data and using it to advance rollup, but the data is not actually available. This prevents users from withdrawing funds. The only real solution is to rely entirely on the value and incentive structure of systems outside of BTC.

Dilemma

This creates a dilemma for rollup. When it comes to data availability, there is basically a binary choice of whether to publish the data to the BTC blockchain or elsewhere. This choice has significant implications for the security, sovereignty, and scalability of rollup.

On the one hand, using BTCBlock chain as the data availability layer will set a hard limit on the scalability of rollup. Block space is limited, which sets a limit on the number of rollups that can exist at once and the total number of transactions that can be processed off-chain for all rollups. Each rollup update requires Block space proportional to the number of accounts whose balance has changed since the last update. Information theory only allows data to be compressed to a certain extent, and at this point, there is no more potential for scalability.

On the other hand, using different layers to achieve data availability eliminates the hard upper limit of scalability gains, but it also brings new security and sovereignty issues. In the Rollup using BTC to achieve data availability, if the data that users need to extract is not automatically published to the blockchain, the state of Rollup cannot change. With Validiums, this guarantee depends entirely on the ability of the external system used to resist deception and data hiding.

Now, any Block producer on the external data availability system can hijack the funds of BTCRollup users by producing Blocks instead of actually broadcasting them, thus making the data available.

So, if we really achieve the ideal Rollup implementation on Bitcoin (BTC), and truly achieve unilateral user withdrawals, what would that be like?