I. What is zkSync?
ZkSync is a Layer-2 scaling solution aimed at reducing costs, speeding up transactions, and providing security on Ethereum using ZK Rollups technology. The current scope of zkSync functionality is only low-cost transportation of ERC-20 tokens, atomic swap mechanism, limit orders, and Layer 2 NFT support. zkSync solves the following problems:
1. COMPOSABILITY – COMPATIBILITY
Composability (roughly translated as compatibility, connection) is a problem of blockchain platforms when Dapp A cannot build on top of Dapp B. This can lead to cash flow disruption when applications are used in ecosystems that are not intimately connected. Therefore, zkSync V2 is aiming to support Dapps that can leverage each other’s resources to create tightly coupled application tiers. On the other side of the line, StarkNet is also being built to handle this problem, one of the weaknesses that StarkEx is facing.
2. CROSS-CHAIN BRIDGE
Compared to Optimismic Rollup, users who withdraw money from zk-Rollup will not have to wait too long (up to 7 days) to receive money on Ethereum. However, there are still too few cost-effective bridging solutions to allow strong cash flow to zk-Rollups.
Users who want money to use services on zk-Rollup will have to go through Ethereum, making this a bottleneck of cash flow.
3. HOW TO RETURN THE VALUE CREATED
How to get value for the network is a big headache for L2 solutions. Currently, all operations are dependent on ETH to collect fees, however, this leaves the team with insufficient tools to coordinate value in the network.
On the contrary, if issuing a private token, it is likely that the community will react strongly because it goes against the inherent decentralization of solutions on Ethereum.
4. PROGRAMMING LANGUAGE
zkSync is expected to use its own programming language Zinc, while StarkNet will use Cairo. For many developers familiar with Solidity on Ethereum, this can be a barrier in terms of product development on zk-Rollup solutions.
II. History of zkSync
Matter Labs was founded at the end of 2019, headquartered in Berlin, and began introducing the zkSync project to the public in the summer of 2020.
The team operates under the principle of promoting individual freedom and being humble, the only important thing is getting the job done – What matters is getting things.
Matter Labs was founded by 2 members: Alexandr Vlasov and Alex Gluchowski. Alex Gluchowski is a software engineer with 19 years of experience, he worked as CTO for several technology companies, including one specializing in Ethereum R&D, before starting to focus on zkSync.
III. Striking Features of zkSync
ZkSync is Matter Labs’ first product based on the Zk Rollups architecture. On zkSync, funds will be stored on smart contracts in the main network (on-chain) while computation and data storage is done off-chain. For the Rollup block, a zero-knowledge proof (SNARK) is generated and verified by the main chain contract.
This SNARK roughly includes proof of the validity of every transaction in the Rollup block. In addition, public data updates for every block are published over the main chain network in a calldata (a temporary data location in Solidity) at a low cost.
This architecture guarantees to give zkSync the following features:
- High Security: Rollups Validators can never corrupt the state or steal funds (unlike SideChains). Users can always take money from Rollups even if validators stop cooperating because of data availability (unlike Plasma).
- Reduced dependency on custodians: Thanks to valid proofs, neither the user nor any other trusted party need to be online to monitor Rollups blocks to prevent fraud ( unlike Optimistic Rollups).
Other outstanding features of zkSync include:
- Transaction fees are 50 times lower than the main network on Ethereum.
- Friendly with smart contracts.
- Protected over 5 million transactions.
- The number of possible transactions per second: 300 TPS.
The Ethereum founder once said that ZK Rollup is a technology that will do much better than Optimistic Rollup, and this is also the underlying technology of ZkSync.
IV. Core Technology of zkSync
zkEVM is a virtual server that executes smart contracts to be compatible with the Zero-knowledge-proof algorithm. zkEVM is the key to building a ZK Rollup solution that is better compatible with the Ethereum virtual server (EVM) while keeping the lines of code highly efficient (i.e. ensuring security, not happening). bugs, bugs are battle-tested well).
ZkEVM gives zk Sync 2.0 high compatibility with EVM, which is present as a weakness of ZK Rollups when Optimistic Rollups were available before but ZK Rollups are not.
If zkSync 2.0 is the piece that helps Ethereum move towards Mass Adoption, then zkPorter is the engine that powers zkSync 2.0. In zkSync 2.0, the Layer 2 state will be split into two sides:
- zkRollup with on-chain data availability.
- zkPorter with off-chain data availability.
Both parties can combine and interact: contracts and accounts on the zkRollups side can interact well with accounts/contracts on the zkPorter side and vice versa.
On the user side, zkPorter has the distinction of being 100 times lower in transaction fees for zkPorters accounts compared to accounts on ZKRollups.
To make it easy to imagine, Uniswap deploys smart contracts on zkRollup, and users with accounts on zkPorter will be able to swap for only <$0.03.
This is possible because the majority of Rollups fees are due to the cost of publishing data on Ethereum. The zkPorter account can do thousands of swaps on the Uniswap contract, but only a single update needs to be published to Ethereum.
3. ZkSync Version 2.0
zkSync 2.0 is a ZK Rollups scaling solution compatible with Ethereum shirt server and enhanced based on zkEVM. zkSync 2.0 is ZK Rollups: a trustless protocol that uses Zero-knowledge proofs to provide scalable low-cost transactions on Ethereum.
ZkSync 2.0 will solve 4 thorny problems on Ethereum including:
- Ability of extension.
- Programming ability.
ZkSync 2.0 includes zkRollup and zkPorter. Unlike zkSync 1.0 – the scope of functionality is purely for payments and transactions, zkSync 2.0 is different, this solution offers the ability to support generalized smart contracts, i.e. zkSync Compiler will convert smart contracts from the native language. Solidity to zkEVM for EVM compatibility and off-chain data availability – zkPorter.
zkEVM and zkPorter provide the ability that smart contracts on Ethereum can be easily converted to zkSync Layer 2 with minimal code editing. Because zkEVM and zkPorter are interoperable and composable, zkSync 2.0 can significantly outperform all other scaling solutions.
- Features of zkSync 2.0
- Mainnet-like security without third-party dependencies.
- EVM permissionless compatible smart contract.
- The standard Web3 API application programming interface ⇒ is beneficial for the future interconnection of projects/protocols in the Web3 network.
- Maintain key EVM features, such as smart contract aggregation capabilities.
- Introducing new features, like Account Abstraction (proposal to allow contracts to be top-level accounts that pay fees and initiate transactions) and meta transactions.
- Highlights of zkSync 2.0
In order to compare zkSync 2.0 with any outstanding points, first of all, we need an opponent equal in strength to zkSync 2.0 to have a better measurement basis. Among the Layer-2 solutions to bring scalability, increase transaction speed, and reduce the load on the Ethereum mainnet, Optimistic Rollups and ZK Rollups solutions are being evaluated as the leading solutions.
4. Outstanding Parameters of zkSync
Outstanding parameters of the zkSync blockchain (March 16, 2022):
- Activation fee: $2.67 (One time use when activating the account for the first time)
- NFT mint fee: $0.22
- Shipping fee: $0.08
- Withdrawal fee: $5.38
- Chain ID of zkSync 2.0 Testnet: 280
- TVL: $80M
- Number of transactions: 6,392,687
5. Pieces of The zkSync Ecosystem
- Zigzag: ZigZag is a native, easy-to-use, reliable, secure, and low-fee decentralized exchange built on ZK Rollups. Zigzag already has a mainnet version on zkSync and will be available on StarkNet soon.
Currently, since the mainnet, the project has had a total transaction volume of nearly $1B and ZigZag’s main task is to provide orderbook, spot, and bridge services from Layer 1. In addition, the project also leaked information that it will launch more margin trading features, NFT marketplace, in the future.
- Mute.io: The native AMM project of zkSync 2.0 is Mute.io (Testnet) with 4 basic swap, Pool, and Farming features, a wallet balance monitoring dashboard, and in addition, an auction feature but not yet been developed.
- 1Inch: This is one of the major DEXs in the market and they are rolling out a DEX version on zkSync, currently in Dev Net.
In short, DEX is an important part of any ecosystem to capture value in terms of liquidity for the system. zkSync also owns 2 native DEX exchanges for flexible liquidity when ZigZag acts as a liquidity bridge from the main Layer 1 Ethereum network to zkSync.
While Mute.io, being the main native AMM on zkSync, helps to provide token swap, farming, liquidity and features to be developed in the future for users.
Currently, the stablecoins traded on zkSync are USDT, UST, USDC, FRAX, DAI.
Stablecoins supported on the zkSync system are very diverse to serve user needs and are mainly traded on ZigZag. In the future, BUSD is also a stablecoin that should be considered for inclusion in the list to be able to partly attract users of BNB Chain.
- Yearn: yearn finance is a selection of Ethereum lending and trading protocols that allow users to optimize their crypto earnings.
- Taker Protocol: This is a liquidity protocol that allows users to liquidate and lease all new types of crypto assets, including tokenized collectibles, metaverse assets, financial papers, property synthesis, and more.
Lending arrays are an important array in any ecosystem to increase the efficiency of the capital in the system. Having the operation of Lending opens the possibility of developing more applications in the future like derivatives, yield farm leverage, etc in a fledgling ecosystem like zkSync.
The presence of Yearn Finance on zkSync is a positive signal to strengthen the development of lending on the system in the near future. However, there is still no native lending platform of zkSync, but lending is an area that provides a large source of revenue and cash flow, but having to outsource it is quite a loss of revenue.
- zkNFT: The project allows minting, discovering, and swapping NFTs at a fraction of the cost of the Ethereum mainnet.
- zkPunks: Is 10,000 NFT punk OG on zkSync. 10% will be donated to Ethereum scaling solutions through Gitcoin. Not affiliated with Larva Labs.
- Boonji Project: The Boonji Project is a project to airdrop NFT “Explore the Joa Galaxy” on zkSync.
- Opensky: The project allows mint, discover, and swap NFTs at a fraction of the Ethereum mainnet cost similar to zkNFT.
- zkSharks: zkSharks is the only 10,000 NFTs looking to drive Ethereum scaling and move NFT to L2 transactions. The goal of the project is to be the first NFT collection to launch on zkSync 2.0.
- OpenStars.org: A community-owned space strategy game built on blockchain. The game is still in beta testing mode.
Although it is an extremely primitive ecosystem, zkSync still does not forget to take care of the entertainment aspect, which is the game segment and NFT. Along with that, the NFT array can be used for the purpose of serving the needs of NFT ownership and transactions and also a destination to help attract and retain users with fork NFT collections (e.g. zkPunks) The original word on Ethereum is very famous Crypto Punk.
- OlympusDAO: Olympus is building a community-owned decentralized financial infrastructure to provide stability and transparency.
- Aragon: The project allows to build of a decentralized autonomous organization on open-source infrastructure with governance plugins.
- Alchemix: Alchemix Finance is a synthetic asset platform backed by future returns and a community DAO.
- zkDAO: zkDAO is a decentralized organization that aims to expand the zkSync ecosystem through active funding across multiple verticals.
DAO projects on zkSync are “not as primitive” as the current state of the ecosystem when they include projects on DeFi 2.0 services such as OlympusDAO or Alchemix, a project on synthetic assets – a protocol more complex than the basic needs of the DeFi puzzle pieces.
5.5. The Infrastructure
- Bridge: Ferrum Network, Via.Exchange, cBridge (Celer), Multichain, deBridge, Connext, Obiter Finance, Nomad, Ferrum Network, Poly Network, Gnosis Safe.
- Data API: Covalent.
- Retrieve and store data (Oracle): Chainlink.
- Game infrastructure: Title Labs.
- Tools: zkMint.
- Explorer: zkScan.
- Basis to bring new money into the crypto market (On-ramp): UTORG, Simplex, Ramp, Banxa.
- Payment: zkSync Link, Sprintcheckout.
- Stablecoins Protocol: Frax, Angel Protocol.
- Web3 standard for connecting wallets to Dapps: Wallet Connect.
- Cross-chain & cross-layer infrastructure and tools for DeFi developers: Composable Finance.
- Modular API and implementation for Verifiable Data and SSI: Veramo.
- Provides a managed backend for blockchain projects: Moralis – Automatically syncs user balances to the database, allows you to set up on-chain alerts, view contract events smarts, build indexes, and more.
- Web 3 Zero-knowledge proof Base Layer: Mystiko.Network.
The infrastructure pieces on zkSync are now relatively complete and serve the applications well.
Bridges have been abundant in both quantity and quality with a fairly thick density. The infrastructure for application development as well as serving users is quite a lot with services serving many different needs from oracle, explorer, payment, API module for data/identity verification, and on-ramps solutions from the centralized market. Because it is a layer-2 on Ethereum, Ethereum-side tools and infrastructure can also be used and scaled via zkSync easily.
The wallet projects on the system are: Numio, zkSync, imToken, Argent, ONTO, Mathwallet, D’CENT, Zerion.
zkSync-enabled wallet platforms are also very diverse, including non-custodial wallets that allow swap tokens, interoperability with dapps (Numio), zkRollup network-specific wallets from zkSync. There are also wallets that allow investment and asset management, or even wallets that support multi-chain (Math Wallet, ONTO).
Owning many different types of wallets and multi-chain makes zkSync serve users in switching networks to zkSync easily, especially for wallets with a large number of users available such as MathWallet, imToken, and zkSync can take advantage of this point to reach users.
5.7. Other Pieces
In addition, there are other pieces such as:
- Social network (Social): Poster.
- Proof-of-Stake Provider: Stakefish.
- Middleware services to connect dapps for privacy, security, and easy payments (Middleware services): Automata Network.
- Ethereum Developer Platform for fixing bugs, bugs, emulating smart contracts: Tenderly.
- Staking: Figment.
- Misc: Clr.fund A protocol for efficiently allocating funds to public goods in favor of the Ethereum Network.
- Ownership for anchoring digital content to physical locations: The Geo Web.
V. How to earn & own ZKSYNC token?
- Visit the zkSync mainnet.
- Connect your Ethereum wallet.
- Now make swaps on the platform.
- You can use Ramp to fund your L2 Zksync mainnet wallet directly, without the need to use any exchanges.
- Visit the zkSync testnet page.
VI. Which Crypto Wallets are suitable for ZKSYNC token?
On the system, there are several wallet projects including Numio, zkSync, imToken, Argent, ONTO, Mathwallet, D’CENT, and Zerion.
Platforms for zkSync-enabled wallets come in a wide variety, with features including non-custodial wallets that support token swaps, compatibility with dapps (Numio), and zkRollup network-specific wallets from zkSync. Additionally, there are wallets that permit asset management and investing, as well as multi-chain wallets (Math Wallet, ONTO).
In particular, wallets with a significant user base like MathWallet, imToken, and zkSync can take advantage of this point to reach customers thanks to zkSync’s ownership of a variety of various types of wallets and multi-chain.
VII. ZKSYNC Recent Developments
- The roadmap of zkSync is divided into 4 stages as follows:
The first phase corresponding to zkSync 1.0 launched in June 2020, is simply a payment method and has not yet integrated smart contracts. In May 2021, zkSync released an upgrade (v1.x) with NFT and swap functionality.
Phase 2 is of zkSync 2.0, with smart contracts and EVM compatibility, plus Zinc’s own programming language with zkPorter. zkPorter is simply a PoS chain to process transaction information on zkPorter instead of Ethereum. Compared at the moment, zkSync is in phase 2. Specifically, the events took place as follows: On June 1, 2021, zkEVM launched a test net version and zkEVM got a mainnet version 2 months later. On February 22, 2022, zkSync 2.0 released the Public Test Net version.
In phase 3, the project will focus on Privacy and unlock some special features of zkRollups.
The fourth phase will be about Decentralization and anti-censorship, i.e. zkSync will be geared towards decentralization and censorship by completely removing Matter Labs control over the network which will empower the community. more copper.
- ZkSync’s layer-3 prototype set for testing in 2023
The layer-3 prototype of the zkSync Ethereum scaling protocol will be tested in 2023.
As early as Q1 2023, a brand-new layer-3 prototype designed to further address Ethereum’s scalability difficulties will be made available for testing. On October 10, ZKSync declared their intention to launch “Pathfinder,” a brand-new layer-3 prototype that is EVM-compatible, on testnet early the next year.
The researchers indicated that the L3 Pathfinder will use recursive scaling and will be a “prototype showcasing a ZK rollup as a fractal Hyperchain in Layer 3”. The post stated that it “will act as a foundation for public experimentation, study, and development of Layer 3.”
VIII. Teams, Funds & Partners of zkSync (ZKSYNC)
- Marco Cora: Head of Business Development at Matter Labs.
- Alex Gluchowski: Founder of Matter Labs.
2. Investment Funds
The most recent funding rounds from zkSync:
- Series A (March 2021): $6M from Binance, Coinbase Ventures, Balancer, Aave, Curve, etc
- Series B (November 2021): $50M from a16z, Blockchain.com, Crypto.com, Bybit, Consensys, OKEx, Covalent, etc
- In January 2022, Matter Labs was approved for a $200M investment from BitDAO to build the zkSync ecosystem.
- zkSync has raised up to 256 million USD from reputable funds in the industry in the past 2 funding rounds.
One of the notable points is that the project is backed by many big CEX exchanges (Binance, Coinbase, Huobi, Bybit, etc) and also veteran names in the DeFi village (Curve, Aave, Balancer, etc), which makes it possible for zkSync to be quickly integrated with both centralized and decentralized exchanges and on DeFi applications.
Therefore, the ability of zkSync to reach users of the project will be greatly enhanced and widely used.
zkSync currently has many partners in many different areas in the blockchain market and also on centralized exchanges such as:
- Huobi Global: Leveraging zkSync’s technological strengths such as low transaction fees and fast transaction speeds on Huobi and vice versa, zkSync will reach a large number of users and liquidity on Huobi.
- OKEx: Direct connection of user funds in/out zkSync.
- Mirana Venture: This is Bybit’s venture capital fund partnering with zkSync to attract cash flow for the zkSync ecosystem.
- Chainlink: Integrating Chainlink Price Feeds to bring zkSync a more accurate price data source as well as security for smart contracts for DeFi development on the system.
IX. Where will the zkSync information be updated?
Currently, Crypto users can fully consult, research, and analyze information about ZKSync through famous media newspapers such as Nasdaq, Bloomberg, Forbes, AP News, Yahoo!Finance, CoinTelegraph, Coindesk, etc.
These media are constantly updated with useful information, new activities, outstanding events of zkSync, and all the topics surrounding it. Accordingly, Meta Lion Ventures continuously updates the topic of outstanding projects in Blockchain and hot events organized between Meta Lion & partners.
X. FAQs about zkSync (ZKSYNC)
- What important factors are needed for a new ecosystem like zkSync to grow further in the future?
To be able to develop further, efforts to cooperate with the largest CEX exchanges in the market such as Binance, FTX, Coinbase are essential as Arbitrum is doing.
The combination with many CEX exchanges – a most important and user-friendly factor, new money flows into the Crypto market. Thereby, the project wishes to attract a large number of users to their ecosystem through the deposit/withdrawal ports. Compare zkSync with the move to connect CEX exchanges of Layer 2 competitors such as:
- Arbitrum (network supported by Binance, FTX, Crypto.com, Bybit, Huobi).
- Optimism (Huubi only).
- StarkWare (yet).
- zkSync (Must go through LayerSwap to access to receive cash flow from Coinbase, FTX, Binance, Huobi, Okex, Kucoin).
Therefore, zkSync will have a huge advantage over other Layer 2 solutions on the market if going in the direction Arbitrum is going.
- How do users get zkSync?
- Visit the zkSync mainnet.
- Connect your Ethereum wallet.
- Now make swaps on the platform.
- You can use Ramp to fund your L2 Zksync mainnet wallet directly, without the need to use any exchanges.
- Visit the zkSync testnet page.
- Is there a zkSync coin?
There isn’t a native token for ZKSync yet. However, the firm makes it clear on its tokenomics website that there will be a native zkSync token that can be staked and used to join the zkSync network as a validator.
- What is the best ZK rollup?
Most popular ZK-rollup projects:
- zkSync is a leading Ethereum Layer-2 blockchain solution.
- Hermez, or Polygon Hermez, is a decentralized ZK-rollup that scales payments and token transfers on Ethereum.
To sum up, using ZK Rollups technology, ZkSync is a Layer-2 scaling solution designed to save costs, expedite transactions, and increase security on Ethereum. Only low-cost ERC-20 token transit, an atomic swap mechanism, limit orders, and Layer 2 NFT compatibility are currently included in the capabilities of zkSync.
Although there are many advantages, this technology still has some disadvantages that need to be updated in the future such as ZKSync Token not being released, Token milestone is not specific, etc. However, this is still a project worth looking forward to.
The above is Meta Lion’s comment on the ZKSync project which is the author’s personal opinion, this is not investment advice at all. Investors should be responsible for their own decisions.