Validium

Validium is an Ethereum Layer 2 scaling solution. It primarily processes transactions and stores data off-chain while generating zero-knowledge proofs to confirm transaction validity. The specific introduction is as follows:

Working Principle

Users send transactions to operators, who collect a large number of transactions and process them in batches off-chain. After processing, a proof circuit is used to create a proof of correct transaction execution. Validium stores the state root on Ethereum. When operators process transactions, they update the state root and send the updated state root along with the proof of correct transaction execution to the Ethereum mainnet. Once Ethereum verifies the proof successfully, the new state is accepted.

Advantages

• High Efficiency By reducing the data storage and computational burden on the Ethereum mainnet, Validium can achieve a transaction throughput (TPS) of up to 9,000, making it suitable for speed-demanding applications such as decentralized exchanges (DEXs).

• Low Cost Since transaction data is not published on-chain, it can significantly reduce gas fees and lower users' transaction costs.

• Strong Security Off-chain data storage enhances transaction privacy, and zero-knowledge proofs add an extra layer of security to transactions.

Challenges

• Data Availability Risk Validium mainly relies on off-chain data availability. If operators or data availability managers withhold transaction data, it may be impossible to generate the proofs needed to withdraw users' funds, making it difficult for users to access their assets.

• Centralization Risk Generating validity proofs requires specialized hardware, which may allow the network to be dominated by a few entities capable of bearing the resources, thereby weakening the network's decentralization.