ZK Prediction: $0.12 market price per ZK proof in 2030 (part 2)

Based on a standard “hardware stack” that could handle a certain number of Zero-knowledge proofs of a projected median difficulty. A research constructed a pro-forma “income statement” for a ZKP operation, layering in projected operational parameters and incorporating operating expenses, investments in equipment and infrastructure, and other costs. These assumptions were based on our experience as infrastructure providers, and were discussed with key players in the industry.

• Complexity of zK proofs: Many kinds of zK proofs exist, with more complex proofs having more advanced hardware and computing requirements to handle the zero-knowledge proof mathematics. We recognize that there will be a range of required hardware, from the latest generation of high-performance GPUs for complex ZKPs, to smaller configurations to handle simpler proofs. For this analysis, we assumed a core technology stack that could handle median difficulty ZKPs.
• Hardware and configuration costs: The model assumes a baseline required hardware stack based on 3 GPUs would be capable of processing average zK proofs. These GPUs would cost about $2,000 each, for a total of $6,000 for three units. (Using high-performance GPUs would significantly increase the cost of this tech stack.) The costs of other processing power, memory, hardware, and installation bring the total for hardware and configuration to an estimated $15,640.
• Additional infrastructure and installation costs: Experience indicates that the cost of necessary additional infrastructure and installation is about 50% of the cost to purchase and configure the hardware. This assumption tacks on $7,820 to the hardware and configuration costs, for an estimated total upfront investment of $23,640.
• Number of zK proofs per day: The expected capacity of this baseline tech stack would be an average of 3,000 zero-knowledge proofs per day, or 1,095,000 proofs per year.
• Capacity utilization: The assumed capacity utilization is 50%, or about 547,500 zero-knowledge proofs per year. This utilization rate is considered appropriate (or possibly a bit high) for highly specialized hardware configurations, which may experience significant fluctuations in processing demand and can be impacted by network issues, variability in protocol performance, etc.
• Hardware amortization period: The target payback period for the initial investment is two years. The model assumes that the riskiness of the business creates investor appetite for a fast payback. Amortizing the capital investment of $23,640 over two years puts a charge on the income statement of $11,730 per year.
• Unit economics analysis: An operating entity in this business should expect operating costs (power, bandwidth, rent, etc.) of 20% of revenue, headcount and administrative costs of 50%, hardware amortization of 10%, and a resulting profit of 20% of revenue.

A zero-knowledge proving company earning revenue of $117,300 per year to complete 540,000 zero-knowledge proofs would receive a market clearing price of $0.22 per proof, which would support a profitable ecosystem of zK provers, even with operating costs and amortization expenses being considered.

Scaling a technology and its supporting ecosystem tends to decrease average market prices, although mitigating factors for zK proofs can maintain upward price pressure. Adoption zero-knowledge proof mathematics for increasingly complex applications would require significantly increased processing power, supporting a higher proof price. An expected significant increase in the functionality of zero-knowledge proofs would increase the demand for complex proofs using zK protocols. For our projection, we expect the price per proof to decline by 10% per year to $0.12 by the year 2030.