ZK proofs are computationally expensive. Generating a proof for a simple ETH transfer consumes orders of magnitude more resources than a standard signature verification, a cost that protocols like Starknet and zkSync amortize across many transactions in a rollup.
e-commerce-and-crypto-payments-future
Blog
Why Zero-Knowledge Proofs Are Overkill for Most Payments
A first-principles analysis arguing that the computational cost of ZKPs is unjustified for transparent, low-value commerce transactions. Their architectural sweet spot is privacy-preserving applications and scaling, not replacing basic payment rails.
introduction
THE OVERHEAD
Introduction
Zero-knowledge proofs introduce unnecessary computational and economic friction for standard payment transactions.
The privacy guarantee is often irrelevant. Most on-chain payments, from Uniswap swaps to Aave repayments, require public state transitions for composability and compliance, negating the core value proposition of ZK.
The latency is prohibitive for UX. Proof generation times, even with hardware acceleration from firms like Ingonyama, add seconds of delay, making ZK unsuitable for point-of-sale or instant settlement use cases.
Evidence: A basic zkSNARK proof for a private transfer on Aztec consumes ~1M gas for verification, while a standard EOA transfer on Ethereum uses 21,000 gas.
key-trends
PAYMENTS ARE NOT PROOFS
Executive Summary: The ZKP Misapplication
Zero-Knowledge Proofs are a cryptographic sledgehammer being used to crack a nut, introducing unnecessary complexity and cost for most transactional use cases.
01
The Privacy Fallacy: On-Chain Payments Don't Need It
ZKPs are sold for privacy, but most payments are not secret. Stablecoin transfers, DEX swaps, and NFT purchases are public by design for compliance and UX. The real demand is for selective disclosure (e.g., proof-of-solvency), not blanket obfuscation.
- Public Ledger Primitive: Transparency is a feature, not a bug, for DeFi composability.
- Regulatory Friction: Full privacy triggers AML/CFT red flags, limiting adoption.
- Misaligned Incentive: Users prioritize cost and speed over cryptographic anonymity for routine transactions.
<5%
Txs Need Privacy
100%
Auditable
02
The Cost Bloat: Proving Overhead vs. Simple Settlement
ZK proof generation is computationally intensive, adding ~$0.10-$1.00+ in prover costs and ~200ms-2s of latency per transaction. For a simple USDC transfer, this is orders of magnitude more expensive and slower than existing solutions like Solana or a well-optimized rollup.
- Prover Monopoly Risk: Centralized proving services become bottlenecks, negating decentralization.
- Fee Mismatch: Users won't pay a premium for privacy they don't value.
- Resource Waste: Energy and hardware better spent on scaling the base layer (e.g., parallel execution).
1000x
Cost vs. L1 Tx
~2s
Proving Latency
03
The Simplicity Benchmark: Visa Processes 65k TPS Without Cryptography
The global financial rail achieves finality and security at scale through trusted, optimized clearinghouses. The blockchain equivalent is not ZK-everything, but purpose-built systems like Solana's localized fee markets or Aptos' parallel execution. Over-engineering with ZKPs before solving basic throughput is putting the cart before the horse.
- Architectural Priority: Scalability first, optional privacy later.
- Proven Pattern: High-throughput L1s and optimistic rollups handle 90%+ of payment volume today.
- Correct Abstraction: ZKPs are ideal for verification (validiums, proofs of state), not per-transaction overhead.
65,000
Visa TPS
~3,000
Solana TPS
thesis-statement
THE MISAPPLICATION
The Core Argument: ZKPs Solve for Privacy, Not Provenance
Zero-Knowledge Proofs are a cryptographic sledgehammer being used for a problem that requires a ledger.
ZKPs verify computation, not history. A ZK-SNARK proves a state transition followed rules, but it does not inherently prove the origin of the input assets. This is the provenance gap that enables laundering in privacy-focused chains like Zcash or Aztec.
Payments require asset lineage, not state secrecy. For a CEX or merchant, the critical question is 'Did these funds come from a sanctioned entity?' not 'Can I hide the transaction amount?'. Tornado Cash demonstrated that privacy without provenance is regulatory kryptonite.
The overhead is prohibitive for simple value transfer. Generating a ZK proof for a payment consumes orders of magnitude more gas and latency than a clear-text Ethereum transaction or a Solana payment. This cost only makes sense for complex, private DeFi logic.
Evidence: The vast majority of high-volume payment rails—Visa, Stripe, Circle's USDC—operate with transparent ledger rules. Their security and compliance models are built on audit trails, not cryptographic obfuscation of transaction graphs.
WHY ZKPS ARE OVERKILL
Architectural Trade-Offs: ZKP vs. Traditional Payment Verification
A first-principles comparison of verification architectures for on-chain payments, quantifying the overhead of privacy and finality.
| Feature / Metric | Traditional (e.g., EVM, Solana) | Validity Proof (e.g., zkEVM, ZK Rollup) | Intent-Based Settlement (e.g., UniswapX, Across) |
|---|---|---|---|
Primary Purpose | Universal state execution | Scalability & privacy for L2s | Optimal cross-domain asset routing |
Verification Latency | < 1 sec (pre-confirmation) | 10 min - 12 hours (proof generation) | < 1 sec (off-chain auction) |
On-Chain Verification Cost | ~50k-200k gas (execution) | ~500k-1M gas (proof verification) | ~100k gas (settlement execution) |
Privacy Leakage | Full public ledger visibility | Full transaction privacy (optional) | Partial privacy (RFQ obfuscation) |
Settlement Finality | Probabilistic (awaiting confirmations) | Absolute (upon proof acceptance) | Atomic (via solver guarantee) |
Infrastructure Complexity | Mature (Geth, Solana Labs) | High (trusted setup, prover networks) | Emerging (solver networks, intent mempools) |
Optimal Use Case |
| Batched L2 transactions, private transfers | Cross-chain swaps, MEV protection |
deep-dive
THE OVERENGINEERING TRAP
The Slippery Slope of Unnecessary Complexity
Zero-knowledge proofs introduce massive overhead for simple transactions, creating a performance and cost bottleneck where none should exist.
ZKPs are computational overkill. Proving a simple payment requires generating a proof that verifies the entire state transition of the virtual machine. This is like using a supercomputer to verify a grocery receipt. The proving overhead dwarfs the actual transaction logic, wasting cycles and energy.
The latency is prohibitive for UX. A zkEVM proof generation takes seconds to minutes, making it unsuitable for point-of-sale or instant settlements. This creates a fundamental mismatch with payment networks like Visa or Lightning, which prioritize finality under one second.
Cost structures become inverted. In a ZK-rollup like zkSync or StarkNet, users pay for proof generation, not just state update. For a $5 payment, the proof cost often exceeds the payment value, destroying the economic model for microtransactions.
Evidence: Polygon zkEVM's average proof generation time is 10 minutes. Arbitrum Nitro, an optimistic rollup, achieves finality in minutes with no proving overhead, demonstrating that fraud proofs are sufficient for most transactional logic.
counter-argument
THE OVERKILL
Steelman: "But ZKPs Enable Scalability and Unify Liquidity"
Zero-knowledge proofs are a powerful but misapplied solution for the specific problem of cross-border payments.
ZKPs solve a different problem. Their cryptographic complexity is engineered for trust-minimized state verification, not simple value transfer. This is over-engineering for a system where counterparties are regulated financial institutions, not anonymous validators.
Scalability is a red herring. Payment corridors like US-Philippines are volume-constrained, not TPS-constrained. Existing networks like VisaNet or FedNow process the required throughput; the bottleneck is settlement finality and cost, not raw transactions per second.
Liquidity unification is inefficient. Forcing all payments through a ZK-verified shared state like zkSync or StarkNet adds latency and cost versus direct, pre-funded bilateral channels used by systems like RippleNet or traditional correspondent banking.
Evidence: The Solana Pay experiment demonstrates that simple, fast finality on a high-throughput L1, not cryptographic proofs, is the dominant factor for merchant adoption. ZK-rollups like Polygon zkEVM prioritize DeFi composability, a requirement absent in most fiat payment flows.
protocol-spotlight
BEYOND THE HYPE
Where ZKPs *Actually* Shine in Payments
Zero-knowledge proofs are a cryptographic sledgehammer; here are the specific nails they're designed to hit.
01
The Problem: Private Corporate Treasury Management
Public ledgers expose transaction patterns, revealing strategic moves to competitors. ZKPs enable confidential settlements on public rails.
- Key Benefit: Hide counterparties, amounts, and internal account structures from public view.
- Key Benefit: Enable auditable compliance (e.g., proof of solvency, sanctioned list checks) without exposing raw data.
100%
Opaque
Auditable
Proofs
02
The Solution: Cross-Border Settlement via Privacy Pools
Traditional correspondent banking is slow and leaky. Privacy pools like Aztec or Zcash use ZKPs to settle high-value transfers.
- Key Benefit: ~2-second finality vs. 2-5 days in traditional finance (Tf).
- Key Benefit: Regulatory compliance via selective disclosure (proving source isn't sanctioned without revealing identity).
>99%
Faster
Selective
Disclosure
03
The Problem: Opaque MEV in Institutional Flow
Large payment batches are prime targets for maximal extractable value (MEV), creating slippage and front-running. ZKPs enable private mempools.
- Key Benefit: Shield transaction intent and order size from public mempools and searchers.
- Key Benefit: Enable fair sequencing proofs that the batch was processed correctly without manipulation.
Zero
Front-Running
Fair
Sequencing
04
The Solution: Programmable Privacy with ZK Rollups
Applications need custom privacy logic, not one-size-fits-all anonymity. ZK rollups like zk.money or Manta Network provide programmability.
- Key Benefit: Build private DeFi (e.g., hidden-limit DEX orders) and payroll systems.
- Key Benefit: ~500ms proof generation on specialized hardware (e.g., GPUs) makes on-chain privacy viable.
Programmable
Logic
Sub-Second
Proofs
05
The Problem: Auditing Without Breaching NDAs
Financial institutions must prove reserves or transaction compliance to auditors/regulators without exposing client data, violating privacy laws.
- Key Benefit: Generate a ZK proof of solvency (assets >= liabilities) without revealing individual account balances.
- Key Benefit: Prove adherence to travel rule or transaction limits cryptographically, not via data dumps.
Zero-Trust
Audit
GDPR-Friendly
Compliance
06
The Solution: Private Stablecoin Transfers (e.g., zkUSD)
Public stablecoin transfers like USDC create permanent financial graphs. Native ZK-backed stablecoins or privacy layers solve this.
- Key Benefit: Break the on-chain financial surveillance trail for everyday business payments.
- Key Benefit: Maintain regulatory clarity as the issuing entity (e.g., Circle) can still enforce blacklists at the protocol level.
Broken
Graph
KYC/AML
Preserved
takeaways
WHY ZKPs ARE OVERKILL
TL;DR for Builders
Zero-knowledge proofs are revolutionary for complex state transitions, but they introduce unnecessary overhead for simple value transfers.
01
The Problem: Latency vs. Finality
ZKPs add ~2-10 seconds of proving time for a transaction that only needs ~500ms of network propagation. This is a classic mismatch between cryptographic purity and user experience.\n- Key Insight: Payment finality on a mature L1/L2 is already sub-second.\n- Reality Check: Users abandon carts at >3 second delays.
10x
Slower
500ms
Target Latency
02
The Solution: Optimistic & Stateless Systems
For payments, probabilistic finality and stateless client models (like Lightning Network or Solana) are more efficient. Optimistic Rollups (e.g., Arbitrum, Optimism) also defer proofs for batched settlement.\n- Key Benefit: Achieves <1s user-observed confirmation.\n- Key Benefit: Reduces computational overhead by >90% vs. per-tx ZKPs.
<1s
User Latency
90%
Less Overhead
03
The Cost Fallacy: Proving vs. Transacting
A ZK-SNARK proof for a simple payment can cost $0.01-$0.10 in compute, rivaling the gas fee it's trying to save. Compare this to a native Solana transaction at ~$0.0001 or a Lightning payment at ~$0.000001.\n- Key Metric: Cost of proof often exceeds cost of execution.\n- Use Case Fit: ZKPs shine for privacy (Zcash) or validium data compression, not vanilla payments.
1000x
Cost Disparity
$0.0001
Baseline Cost
04
The Architecture Rule: Defer Complexity
Follow the design of UniswapX and Across Protocol: handle intents off-chain, settle in batches. Use ZKPs only at the settlement layer (L1) for batch integrity, not per user action. This is the core innovation of validiums and sovereign rollups.\n- Key Benefit: User gets speed, L1 gets security.\n- Key Benefit: Enables cross-chain intents without on-chain proof for every hop.
Batch
Settlement
Per-Tx
Execution
05
The Privacy Trap: ZK ≠Confidential
A ZKP proves payment validity, not anonymity. For true payment privacy, you need stealth addresses, coin mixing, or full zk-SNARKs like Zcash. Most payment use cases only need confidential amounts, achievable with simpler cryptography like Pedersen commitments.\n- Key Insight: Monero provides strong privacy without general-purpose ZKPs.\n- Reality Check: Regulatory compliance often requires auditability, making full ZK privacy a liability.
Auditable
Vs. Private
Simpler Crypto
Often Sufficient
06
The Builder's Checklist
Ask these questions before reaching for a ZK circuit:\n- Is my state transition complex? (e.g., verifying a game move). If no, avoid ZKP.\n- Can I use an optimistic challenge period? (1-7 days). If yes, use an Optimistic Rollup.\n- Do I need privacy or just efficiency? For efficiency, use a faster VM (Solana, Fuel).\n- Can I batch proofs? Always batch. Never prove a single payment.
1/7 Days
Challenge Window
Always
Batch Proofs
ENQUIRY
Get In Touch
today.
Our experts will offer a free quote and a 30min call to discuss your project.
NDA Protected
Confidentiality24h Response
Time to ValueDirectly to Engineering Team
No Sales Fluff10+
Protocols Shipped
$20M+
TVL Overall