Why Zero-Knowledge Proofs Create New, Opaque Centralization Risks

ZK-SNARK and ZK-STARK generation is computationally intensive, creating a natural oligopoly. The entity controlling the prover infrastructure becomes the de facto trusted third party.

• Single points of failure in networks like zkSync and Polygon zkEVM.
• Censorship risk: Provers can selectively exclude transactions.
• Economic capture: Prover rewards create a $100M+ annual market ripe for centralization.

Most ZK-SNARKs require a one-time trusted setup to generate a Common Reference String (CRS). If compromised, all subsequent proofs are forged.

• Perpetual backdoor risk: A leaked toxic waste from ceremonies like Zcash's Powers of Tau or Tornado Cash undermines the entire system.
• Opaque participation: Multi-party ceremonies are complex and lack verifiable participant randomness.
• Legacy risk: Systems remain vulnerable to advances in cryptanalysis against a fixed setup.

The shift from re-execution to proof verification outsources security to a handful of teams who can audit the complex circuit logic and verifier contracts.

• Audit oligopoly: Only ~5 firms globally can competently audit production ZK circuits.
• Upgrade governance: Changes to circuits (e.g., for EIPs) require centralized expert teams, mirroring core developer risks.
• Bug criticality: A single bug in a verifier contract, like the one exploited in zkSync Era, can lead to uncapped loss.

ZK-rollups like zkSync Era and Starknet rely on a single, centralized prover to generate validity proofs. This creates a single point of failure and censorship.\n- Centralized Trust: The sequencer-prover model re-introduces the very trust assumptions ZK tech was meant to eliminate.\n- Censorship Vector: A malicious or compromised prover can censor transactions or halt the chain by refusing to generate proofs.\n- Economic Capture: Proving generates ~90% of sequencer revenue, creating a powerful, sticky monopoly.

ZK-SNARK systems like Zcash and Polygon zkEVM require a one-time trusted setup to generate a Common Reference String (CRS). If compromised, all proofs are invalid.\n- Permanent Backdoor Risk: A single participant in the ceremony can retain toxic waste, creating a permanent cryptographic backdoor.\n- Opaque Participation: Ceremonies like Tornado Cash's relied on public figures, not verifiable technical audits.\n- Legacy Risk: Systems launched years ago carry this unquantifiable risk for their entire lifespan.

The on-chain verifier contract is a ~10,000x compression oracle for off-chain computation. A bug here is catastrophic and undetectable.\n- Silent Failure: Unlike an EVM bug, a faulty verifier will accept invalid proofs, corrupting the chain's state root.\n- Audit Complexity: Verifiers for custom VMs (e.g., Starknet's Cairo) are novel, complex, and have a tiny pool of expert auditors.\n- Upgrade Centralization: Fixing a verifier bug requires a centralized, permissioned upgrade, as seen in early Polygon zkEVM incidents.

High-performance proving (e.g., for zkEVMs) requires specialized hardware like GPUs and FPGAs, creating geographic and capital centralization.\n- Capital Moats: Entities like Espresso Systems building zkVM co-processors could dominate the proving market.\n- Proposer-Builder-Separation (PBS) for ZK: The prover becomes the ultimate MEV extractor, seeing all transactions before they are finalized on L1.\n- Geopolitical Risk: Proving farm concentration in regions with cheap power creates regulatory attack vectors.

Proof generation is computationally intensive, creating a natural monopoly for specialized hardware operators. This centralizes the core security function of ZK-rollups like zkSync Era and Starknet.

• Single point of failure: A dominant prover can censor or halt the chain.
• Economic capture: Prover revenue is concentrated, disincentivizing decentralization.
• Hardware arms race: Favors well-funded entities (e.g., Jump Crypto, Nvidia) over permissionless participation.

Most ZK systems (e.g., Zcash, early zkEVMs) require a one-time trusted setup to generate cryptographic parameters. A single compromised participant can create undetectable fraudulent proofs.

• Persistent backdoor risk: A malicious actor can mint infinite tokens or corrupt the chain's state.
• Ceremony complexity: Large, coordinated ceremonies (like Tau for Zcash) are hard to audit and verify.
• Solution path: Migration to STARKs (transparent) or perpetual ceremonies (Aztec).

ZK-rollups inherit the sequencer centralization of Optimistic Rollups but add prover centralization. The sequencer-prover combo, often run by the same entity (e.g., Polygon zkEVM, Linea), controls transaction ordering and validity.

• Maximal Extractable Value (MEV): Centralized sequencers can front-run and censor.
• Data availability reliance: Even with a ZK proof, the chain depends on a centralized data availability committee or layer like Celestia or EigenDA.
• Verifier decentralization is not enough: A decentralized set of verifiers checking proofs is useless if the data feed is corrupted.

ZK circuits are complex and require frequent upgrades for bug fixes and optimizations. This grants immense power to multi-sig governance councils (e.g., zkSync's Security Council, Arbitrum DAO), who can change the protocol's fundamental rules.

• Code is not law: A governance vote can alter the verification key, invalidating all previous security assumptions.
• Emergency powers: "Security" multisigs can pause the chain, a power often retained indefinitely.
• Solution path: Immutable circuits or long timelocks, which trade agility for credibly neutral security.