Ethereum is the most used and trusted chain in the crypto ecosystem. It has managed to outperform all other chains thanks to its thousands of dApps and DeFi protocols. Ethereum is also known for its security and decentralization, but unfortunately, it also faces the blockchain trilemma.
To address Ethereum’s scalability issues (speed and transaction costs), many Layer 2 protocols have been built on top of this chain to try to scale it.
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One of the contenders in this race is zkSync, created in 2019 with one goal: to bring mass adoption.
To stand out from other chains, zkSync focuses on 4 main Ethereum-related properties, such as:
1. As a general protocol
2. EVM compatibility (support Solidity language)
3. Gas fees paid in ETH
4. Open source and decentralization
By focusing on these 4 elements, zkSync aligns with the goals of not only the Ethereum community, but the entire market and cryptocurrency.
Project Introduction
zkSync, created by Matter Labs, is a user-centric zk rollup platform. zkSync is a Layer 2 expansion protocol based on zk-rollup technology, designed to solve the scalability problem of the Ethereum network. It uses zero-knowledge proof technology to achieve efficient transaction processing and fast confirmation time while ensuring security and decentralization.
Like optimistic rollups, zk-rollups will aggregate transactions on the Ethereum mainnet and submit transaction proofs to Ethereum. This means hundreds of transactions are combined into one transaction, verified and secured by Ethereum. zkSync supports the transfer, trading and storage of ERC20 tokens and Ethereum, and provides interoperability with the Ethereum network.
zkSync 2.0 has been renamed to zkSync Era, and zkSync 1.0 has been renamed to zkSync Lite
zkSync Team
The zkSync team members mainly come from Matter Labs. The following are some of the core members:
Alex Gluchowski: Co-founder and CEO of Matter Labs, one of the main leaders of the zkSync project, with extensive experience in blockchain and cryptography.
Alex Vlasov: Co-founder and CTO of Matter Labs, one of the main technical leaders of the zkSync project, with a deep technical background and rich experience
Dmitry Khovratovich: Chief Scientist of Matter Labs. He is one of the well-known experts in the field of cryptography and has published important papers in many international cryptography conferences.
In addition to this, Matter Labs, the company behind zkSync, is based in Germany and was founded by Alex Gluchowski in 2018 and has quickly grown to over 50 employees. The team is made up of experienced blockchain developers, researchers, and entrepreneurs who came together to create a more efficient, cost-effective, and secure way to transact on Ethereum.
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zkSync Fundraising
zkSync raised $458 million, becoming the largest L2 project with a C round valuation of $2 billion. zksync is the project with the greatest potential and the best chance to become the leading L2 project in the future.
zkSync has completed 5 funding rounds since 2018, raising a total of $258 million from the largest investors, venture capitals, and investment firms, plus a $200 million funding commitment from BitDAO.
Such an amount ensures sufficient funds to develop projects and infrastructure and is the most funded L2.
$200 million Series C funding round led by Dragonfly and Blockchain Capital in November 2022
$200 million pledged from BitDAO in January 2022
BitDAO’s $200 million funding commitment will play a major role in the development of the ecosystem. The DAO is committed to expanding the zkSync ecosystem through active funding in various areas:
70% of the funds will be used for strategic capital investments in areas such as DeFi, NFTs, gaming, privacy, interoperability, and even providing liquidity.
7.5% of the funding will be allocated to grants for the development of tools for migrating from L1 to L2, in order to accelerate adoption and encourage further investment and research by industry players.
7.5% of the funds will be used to fund the hiring of security auditing firms to ensure the security of the ecosystem and create security knowledge and standards.
5% of the funding will be allocated to R&D to improve zkProofs and related technologies
5% of funding will be allocated to education and training on the opportunities provided by technology and its impact
· 5% of the funds will be used for operations such as legal setup, compliance, and payroll.
$50 million Series B funding led by a16z in November 2021
$6 million Series A funding led by Union Square Ventures in February 2021
$2 million seed round led by Placeholder in September 2019
The $200 million in funding from BitDAO will be used to bootstrap the zkSync ecosystem and will be distributed in 5 tranches of $40 million each when certain milestones are reached. (More in the Ecosystem section)
As a result, zkSync now has a large amount of funding to help them develop multiple focus directions, such as growing the team, growing the ecosystem, attracting other protocols, users, and creating a learning center, Matter University.
The team clearly has enough available cash to cover their burn plan and deliver the first product development. It is also important to note that the majority of the funds raised will be used to develop the ecosystem and distribute grants to developers and users of that ecosystem.
zkSync Technology
zkSync has managed to attract attention by implementing and developing cutting-edge mechanisms. The main innovation of this chain remains the use of zero-knowledge technology combined with the rollup function. Compared with other L2 technologies, it has higher security and efficiency, with an expected performance of more than 3,000 TPS.
ecosystem
As mentioned above, zkSync is not yet fully live, but there are still projects and protocols deployed on the chain.
Matter Labs claims that more than 150 projects have deployed or are willing to deploy on the chain. These pioneers have brought $65 million in TVL, while most applications are still not live on the mainnet.
The ecological development of zkSync. Currently, the ecological development of zkSync is still in an early stage.
Since zkSync 1.0 is not yet compatible with EVM, there are not many projects that support or integrate zkSync, most of which are infrastructure projects such as wallets and payment gateways.
Project Process
The zkSync 2.0 mainnet was launched on October 28, 2022. The launch of zkSync Era marks the official entry of encryption into the zkEVM era, which is a historic moment.
Its users have skyrocketed. According to Dune data, as of writing this article, the number of single addresses of zkSync Era has exceeded 200,000, and more than 48,000 ETH have entered the zkSync Era mainnet across chains.
For zkSync, the launch of Era mainnet is also the first step in their launch phase. It can be regarded as an Alpha version, and its infrastructure and core parts have laid a solid foundation for its future development. Currently, users can cross the bridge to the mainnet and interact with some of the projects launched.
Token
As of today, zkSync has not released any information about its token and token economics, which would encourage speculation among users and investors.
According to the team, only 30% of the tokens will be allocated to the team and investors, and the rest will be used for community and ecosystem development.
In fact, airdrop hunters help projects by bringing TVL and activity to the chain, leading to rapid growth. Therefore, zkSync should surf the airdrop wave and leave an aura of doubt in the community, such as what Arbitrum is currently doing.
Even though the team announced that gas fees will be paid in ETH, we can imagine multiple uses for the token in the future:
Used for gas and converted to ETH
Grant governance rights to the protocol and DAO
Get a stake or delegate to verify transactions to become a guardian
Overall, it is clear that with the numerous investors and supporters of zkSync coming on board over the past few years, the token will be released, the only remaining question is when and according to what criteria.
route map:
For the zkSync team, 2023 will be similar to 2022, with a crazy amount of new development and key implementations happening throughout the year, leading to a complete working chain by the end of the year.
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