# Technical Overview

VDEX is powered by Virtual Rollups, a framework built on zero knowledge state channels. Transactions are self-validated and peer-to-peer, eliminating middle men and restoring power to users.

Virtual Rollups segment capital into two layers:

* The **settlement layer** is a blockchain that locks and reassigns **escrow** according to **state**
* **ZK State Channels (ZKSC)** are primitives that let users reassign **escrow** rights through **state** transitions

Participants lock funds on a settlement layer, like Ethereum, and receive a balance state. This balance state can be exchanged for position states through the ZKSC. At any time, users may submit states onchain to trustlessly unlock funds.&#x20;

This architecture has distinct advantages:

* Privacy
* Full Self-Custody
* ZeroGas transactions
* Sub-millisecond finality
* Theoretically unbounded TPS

Learn more in the VDEX whitepaper.

{% content-ref url="/pages/bWeLJHg3EenlnhrvGEp8" %}
[Whitepaper](/protocol/whitepaper.md)
{% endcontent-ref %}


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