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Last week, Solana (SOL) launched a feature called zero-knowledge compression (ZK), developed in partnership with Light Protocol and Helius Lab.

This new tool promises to revolutionize the development of applications on the Solana blockchain, drastically reducing costs and increasing scalability. This sparked intense debate in the crypto community.

Announced on June 21, ZK compression uses zero-knowledge proofs to cut the costs of creating tokens and accounts by compressing on-chain state.

These proofs ensure data integrity and enable data recovery through supported RPC providers. By storing only the on-chain state roots and other data on the Solana Ledger, developers can minimize on-chain storage costs.

Mert Mumtaz, CEO of Helius, highlighted the significant improvements in cost and scalability that ZK compression delivers.

“We achieved 10,000x scaling improvements by compressing on-chain state, bringing us closer to creating a fast-synchronizing, global state machine,” said Mumtaz.

Solana announces ZK-based system

Austin Federa, head of strategy at Solana, emphasized that this solution addresses the high costs of storing on-chain accounts.

“ZK compression will solve a major pain point for institutions and mass consumer applications, enabling more companies to create on-chain products,” Federa explained.

Despite the enthusiasm, some members of the crypto community argue that this functionality resembles a layer 2 (L2) network. Adam Cochran, for example, believes that the compression tool acts like an L2, and that the developers are just presenting it differently.

“The Solana team will eventually realize that they have built effective L2 functionality, which is a good thing as long as they are honest about it,” Cochran commented.

Ethereum investor Ryan Berckmans also sees the new product as essentially an L2 and praised the model as a success.

Anatoly Yakovenko, co-founder of Solana, responded by saying that the product works like an L2, but without the common disadvantages. He admitted that there are still some risks, but highlighted that a multisig security board, exchange of chain IDs, a governance token, or an external sequencer is not necessary.

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