Monolithic execution is the bottleneck. Every EVM transaction must be processed sequentially by a single, slow virtual machine. This design creates a hard ceiling on throughput, forcing L2s like Arbitrum and Optimism into complex, expensive fraud-proof systems to scale.
zk-rollups-the-endgame-for-scaling
Blog
Why We Need to Rethink the Smart Contract Stack
EVM compatibility, the industry's sacred cow, is the primary bottleneck for ZK-Rollup performance. True scaling requires a new execution stack built from first principles for zero-knowledge provability.
introduction
THE ARCHITECTURAL COST
The EVM's Hidden Tax
The EVM's monolithic design imposes a systemic performance penalty on every transaction, creating a bottleneck for scaling and innovation.
The gas model is a tax on complexity. Gas pricing conflates computation, storage, and bandwidth into a single, opaque fee. This penalizes advanced applications, making operations like ZK-proof verification or on-chain AI inference economically unviable on the base layer.
Modular chains avoid this tax. Architectures like Celestia for data availability and EigenLayer for restaking decouple core functions. This allows execution layers, such as Fuel or Monad, to specialize and achieve orders-of-magnitude higher performance by bypassing the EVM's inherent limitations.
Evidence: The L2 Fee Premium. Users pay a 10-100x premium on L2 transaction fees primarily to cover the cost of posting compressed data back to Ethereum—a direct artifact of the EVM's storage-centric, monolithic architecture.
thesis-statement
THE ARCHITECTURAL FLAW
Compatibility is a Bottleneck, Not a Feature
The industry's obsession with EVM compatibility has created a fragmented, inefficient smart contract stack that stifles innovation.
EVM compatibility is a tax. It forces every new L1 and L2 to inherit the EVM's technical debt, including its single-threaded execution model and 256-bit word size. This creates a lowest-common-denominator environment where superior VMs like Solana's SVM or Fuel's UTXO model cannot interoperate natively.
The interoperability layer is broken. Projects like LayerZero and Axelar build bridges for assets, not state. Moving logic across chains requires complex, insecure multi-sig relays or wrapped asset systems, which fragment liquidity and increase systemic risk, as seen in the Wormhole and Nomad exploits.
The future is application-specific. Monolithic chains like Ethereum and Solana will become settlement layers. Execution will migrate to rollups and app-chains built with purpose-built VMs (e.g., dYdX v4 on Cosmos). The current stack, designed for homogeneity, fails this heterogeneous future.
Evidence: The Ethereum L1 processes ~15 TPS. Even optimistic rollups like Arbitrum only scale to ~4,000 TPS after full data compression. This bottleneck exists because the foundational contract layer was not designed for parallel execution or native cross-chain logic.
key-trends
WHY WE NEED TO RETHINK THE SMART CONTRACT STACK
The Three Pillars of ZK-Native Execution
The EVM's opcode-centric model is a fundamental bottleneck for ZK-provers. True scaling requires a new computational foundation.
01
The Problem: The EVM's Arithmetic Wall
EVM opcodes are cryptographic black boxes to ZK circuits, forcing expensive non-native field emulation. This creates a ~100-1000x overhead for basic operations.
- Key Benefit: Native arithmetic in the prover's field (e.g., BN254, BLS12-381) eliminates emulation cost.
- Key Benefit: Enables direct, efficient proofs of cryptographic primitives like digital signatures (EdDSA) and pairings.
100-1000x
Overhead Today
~1x
Target Cost
02
The Solution: State Models Built for Proofs
Merkle-Patricia Tries require sequential hash chains, a prover's nightmare. A ZK-native VM needs a state model where every operation is inherently parallelizable and provable.
- Key Benefit: Sparse Merkle Trees or other vector commitments enable constant-time proof updates.
- Key Benefit: State transitions become pure, deterministic functions, aligning with the ZK circuit model of Starknet, zkSync Era.
O(log n)
Proof Update
Parallel
Execution
03
The Mandate: Developer Experience as a First-Class Constraint
Forcing developers to write low-level circuits (Cairo, Noir) limits adoption. The stack must abstract ZK complexity while preserving its guarantees.
- Key Benefit: High-level languages that compile to ZK-IR (like Polygon zkEVM, Scroll) maintain EVM compatibility without the overhead.
- Key Benefit: Automated circuit generation from standard code (Rust, Solidity) via frameworks like L2Beat's ZK-Circuit Compiler.
EVM-Equiv
Compatibility
0 ZK Knowledge
Dev Requirement
ARCHITECTURAL TRADEOFFS
The Cost of Convenience: EVM vs. ZK-Native VMs
A first-principles comparison of the dominant general-purpose VM versus VMs designed for zero-knowledge proof generation, analyzing the fundamental tradeoffs between developer convenience and execution efficiency.
| Architectural Feature / Metric | EVM (Ethereum, L2s) | ZK-Native VM (e.g., zkSync, Starknet) | MOVE VM (Aptos, Sui) |
|---|---|---|---|
Proving Cost per Tx (Est.) | $0.10 - $0.50 | $0.01 - $0.05 | |
State Growth (per account) | ~25 KB baseline | ~1 KB (compact state) | ~0.5 KB (resource-centric) |
Native ZK-Friendliness | |||
Gas Metering Overhead | 15-20% of execution | < 1% of execution | 5-10% of execution |
Dominant Cost Center | Storage I/O & Keccak hashing | Arithmetic circuits (R1CS/Plonk) | Parallel execution scheduling |
Developer Tooling Maturity | 10/10 (Hardhat, Foundry) | 6/10 (emerging SDKs) | 7/10 (Move Prover, CLI) |
Time to Finality (L1 settle) | ~12 minutes (Ethereum) | < 10 minutes | N/A (sovereign L1) |
Key Innovation | Network effects & composability | Scalability via cryptographic proofs | Parallel execution & asset safety |
deep-dive
THE BOTTLENECK
From Opcodes to Languages: The Re-Engineering Pipeline
The EVM's opcode-centric architecture is a legacy bottleneck that forces developers to build on a broken foundation.
The EVM is a bottleneck. Its limited opcode set and global state model force every application into the same inefficient execution pattern, creating systemic congestion and high fees.
Smart contract languages are abstractions over a broken base. Solidity and Vyper compile to EVM bytecode, inheriting its fundamental constraints; they optimize a flawed machine rather than redefining it.
New VMs require new languages. Projects like Fuel with Sway and Movement with Move prove that designing the language and virtual machine in tandem unlocks order-of-magnitude gains in throughput and security.
Evidence: The Fuel VM executes transactions in parallel, achieving 10k+ TPS in tests, while the Move VM's resource-oriented model eliminates entire classes of reentrancy and overflow bugs common in Solidity.
protocol-spotlight
THE MONOLITHIC LIMIT
Builders on the Frontier: Who's Betting on the New Stack?
The EVM's integrated execution, settlement, and data availability is a bottleneck. The new stack disaggregates these functions for radical scaling.
01
Celestia: Decoupling Data Availability
The monolithic chain forces every node to process all data, creating a hard scalability cap. Celestia provides a modular data availability layer that lets rollups post cheap, verifiable data blobs.\n- Enables sovereign rollups with independent governance and forks\n- Orders of magnitude cheaper L2 data costs vs. Ethereum calldata\n- Foundation for the modular ecosystem (Fuel, Eclipse, Dymension)
~$0.01
Per MB Data Cost
1000+ TPS
Base Layer
02
Fuel: Parallelized Execution via UTXO
EVM's sequential execution is a fundamental throughput ceiling. Fuel implements a parallel transaction processor using a strict UTXO model and a custom virtual machine (FuelVM).\n- Achieves parallel execution by resolving state dependencies at compile-time\n- Native account abstraction and asset system built into the VM\n- Serves as a modular execution layer for any settlement or DA chain
10x+
EVM Throughput
~0 TPS Waste
Parallel Efficiency
03
EigenLayer: Reprogramming Economic Security
Bootstrapping security for new protocols (AVSs) is capital-intensive and slow. EigenLayer introduces restaking, allowing ETH stakers to opt-in to secure additional services.\n- Creates a marketplace for cryptoeconomic security\n- Dramatically lowers capital costs for new networks (e.g., EigenDA, altDA layers)\n- Turns Ethereum into a universal security hub beyond consensus
$15B+
TVL Restaked
1-to-Many
Security Model
04
The Problem: The Interoperability Trilemma
Bridges face a trade-off between trustlessness, generalizability, and capital efficiency. Native cross-chain execution (IBC, LayerZero) and intent-based architectures (Across, UniswapX) are the new paradigms.\n- IBC provides minimal-trust interoperability but is complex to integrate\n- LayerZero offers universal messaging with configurable security\n- Intent solvers abstract complexity, optimizing for user outcomes
$2B+
Bridge Hacks (2022)
~3s
IBC Finality
05
Espresso Systems: Decentralizing Sequencers
Rollup sequencers are centralized points of failure and value extraction. Espresso provides a shared, decentralized sequencer network with fast finality via HotShot consensus.\n- Prevents MEV theft and censorship through decentralization\n- Enables cross-rollup atomic composability\n- Shares sequencing revenue with the rollup and its community
-100%
Sequencer Downtime Risk
Shared
MEV Revenue
06
The Solution: A Purpose-Built Stack
The endgame is not one chain to rule them all, but a specialized stack where apps choose optimal components. This means selecting DA (Celestia, EigenDA), execution (Fuel, Arbitrum Stylus), settlement, and interoperability layers independently.\n- Unlocks application-specific optimization impossible on monoliths\n- Creates competitive markets for each layer's resources\n- Shifts developer mindset from 'which chain?' to 'which combination?'
10-100x
Cost Efficiency
Composable
Sovereignty
counter-argument
THE LOCK-IN
The Solidity Defense: Network Effects vs. Technical Debt
Ethereum's EVM dominance, built on Solidity, creates an unshakable network effect that stifles fundamental innovation in the smart contract stack.
Solidity's network effect is impenetrable. The EVM's tooling, developer mindshare, and $100B+ in locked value create a gravitational pull that makes alternative VMs like Fuel's Sway or Solana's Sealevel adoption plays, not technical upgrades.
This creates systemic technical debt. The EVM's 256-bit architecture, high gas costs, and lack of native parallel execution are now baked-in constraints for thousands of protocols, forcing layer-2s like Arbitrum and Optimism to optimize around the EVM, not replace it.
The result is innovation theater. New VMs promise breakthroughs, but must maintain EVM-equivalence or bytecode compatibility via projects like Neon EVM to attract capital, creating a complexity sandwich that adds overhead without solving core inefficiencies.
Evidence: Over 95% of all TVL in smart contracts resides in EVM-compatible environments. Non-EVM chains like Solana or Aptos must deploy EVM wrappers like Wormhole to access this liquidity, proving the standard's defensive moat.
takeaways
THE EXECUTIVE BRIEF
TL;DR for CTOs and Architects
The EVM-centric smart contract stack is hitting fundamental limits. Here's what to architect for next.
01
The Problem: Monolithic Chains Are Saturated
Ethereum L1 and its clones are hitting compute, storage, and consensus bottlenecks simultaneously. This creates a trilemma for apps: security, scalability, or sovereignty—pick one.
- Gas spikes routinely exceed $100+ for simple swaps.
- State growth cripples node operators, threatening decentralization.
- Every dApp competes for the same congested blockspace.
$100+
Peak Gas
1.5TB+
Node Size
02
The Solution: Intent-Centric Abstraction
Shift from transaction specification to outcome declaration. Let specialized solvers (like UniswapX, CowSwap) compete to fulfill user intents off-chain, settling guarantees on-chain.
- User Experience: Sign one intent, get optimal route across chains/DEXs.
- Efficiency: Solvers batch and compress, reducing on-chain footprint by ~70%.
- Architecture: Separates expression from execution, a core Web2 principle.
~70%
Less On-Chain Data
1-Click
Complex Trade
03
The Problem: Application Logic = Infrastructure Burden
Every dApp rebuilds its own security and data availability layer. This is like every website building its own TCP/IP and CDN.
- Repeated Work: Each new rollup or appchain spins up a new validator set.
- Fragmented Liquidity: $50B+ TVL is siloed across hundreds of environments.
- Developer Drag: 80% of effort goes to infra, not product logic.
$50B+
Siloed TVL
80%
Infra Dev Time
04
The Solution: Modular Stack & Shared Sequencers
Decouple execution, settlement, consensus, and data availability. Use Celestia or EigenDA for cheap DA, shared sequencer networks like Espresso for atomic cross-rollup composability.
- Specialization: Each layer optimizes for one job (e.g., DA cost < $0.001 per MB).
- Composability: Shared sequencing enables native cross-rollup transactions.
- Sovereignty: Apps deploy rollups without bootstrapping security.
<$0.001
Per MB DA Cost
Atomic X-Chain
Composability
05
The Problem: Oracles Are a Centralized Single Point of Failure
DeFi's $100B+ in secured value relies on a handful of oracle nodes. Data feeds are slow (every 12-24 seconds) and vulnerable to MEV extraction and manipulation.
- Security Risk: Compromise a few nodes, compromise the protocol.
- Latency: Cannot support high-frequency or real-world asset (RWA) use cases.
- Cost: Premium for decentralized data is prohibitive for long-tail assets.
12-24s
Update Latency
Handful
Critical Nodes
06
The Solution: Provers as Universal Oracles
Replace data feeds with verifiable computation. A ZK-proof can attest to the state of any off-chain system (CEX, TradFi API, IoT stream). Projects like =nil; Foundation and Herodotus are pioneering this.
- Trustless: Verification is cryptographic, not social.
- Universal: Any data source becomes an on-chain primitive.
- Fast & Cheap: Prove state changes in ~500ms, amortize cost across users.
~500ms
Proof Gen
Any API
Data Source
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