Reduce on-chain costs with new technology

• ZK compression dramatically reduces on-chain costs for token and account creation.
• The community debates whether ZK compression works like a layer 2 network.

Solana (SOL) announced an innovative feature called zero-knowledge (ZK) compression, created in collaboration with Light Protocol and Helius Lab. With the help of this innovative technology, developers can compress the on-chain state of tokens and accounts, thus reducing related expenses to their creation.

Light Protocol and Helius Labs will collaborate to introduce ZK compression Solana on June 21st. By compressing data on the chain, this feature seeks to make application development more scalable and dramatically reduce expenses while preserving Solana’s security and performance.

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How ZK compression works

ZK compression reduces token and account creation costs by using zero-knowledge proofs. These validations enable data retrieval using supported RPC providers and ensure data integrity. Developers can dramatically reduce on-chain storage costs by storing only state roots on-chain and retaining other data Solana’s register.

According to Mert Mumtaz, CEO of Helius, ZK compression offers significant cost savings and scalability improvements. “We compress state on-chain, bringing us closer to creating a fast-synchronizing, global state machine,” he said, “achieving improvements at 10,000x scale.”

Address storage costs

Chief Strategy Officer Austin Federa of Solana highlighted how ZK compression addresses the high storage costs of on-chain accounts.

Federa claims that by reducing the costs of the Solana token and account, this invention will allow more companies to produce products on-chain. Federa said:

“This compression helps institutions and mass consumer applications solve a big pain point.”

While there is a lot of excitement, some in the cryptocurrency world argue that the ZK squeeze is more like a level 2 (L2) squeeze. A leading voice in the industry, Adam Cochran, says that the compression tool is an L2 and that the developers present it differently.

“The Solana team will eventually realize that they have created an effective L2 feature, which is good as long as they are honest about it,” Cochran said.

At the time of writing, SOL is trading for approx $125.36below 6.82% in the previous 24 hours, according to CoinMarketCap. On the other hand, Teleportationa new decentralized ride-sharing software on Solana that offers drivers lower expenses and higher earnings, was highlighted in a previous CNF report.

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