Recently, the news about zkSync's upcoming coin issuance and the prediction of airdrop rules have caused market discussions. After reviewing zkSync's data this year, PANews found that although zkSync's market size is still in a leading position, its user participation willingness is decreasing, and its profit capture ability is also greatly reduced. This is closely related to its airdrop PUA that has lasted for several years, the poor quality of ecological projects, and the neglect of user rights.
There are few high TVL ecological projects and they are of a single type. The profits on the chain rely on Ga income but have shrunk significantly.
To date, according to L2BEAT data, as of May 6, the total locked volume of zkSync Era was nearly US$850 million, an increase of about 44.1% from the beginning of the year, ranking eighth among L2 projects.
However, the zkSync ecological projects with high TVL are relatively single and few in number. The zkSync official website shows that as of May 6, although its ecological projects have reached 243, covering DeFi, games, trading markets, NFT, Social, wallets and DEX, data from DeFiLlama also shows that only 4 zkSync projects have a TVL of over 10 million US dollars, accounting for nearly 66% of the total locked volume. At the same time, among the TVL Top 10 projects, most are from DEX and lending tracks. Its ecological dilemma also greatly affects the degree of user participation.
In terms of the number of users and the scale of funds, zkSync Era has achieved good growth this year. Dune data shows that as of May 6, the number of zkSync Era users has reached nearly 3.13 million, an increase of 16.3% from the beginning of this year; the total amount of ETH bridged exceeds 3.22 million, an increase of 38.8% from the beginning of the year. However, the average number of ETH bridged by users is only 1.37, and more than 80% of users have less than 1 ETH bridged, and only 1.3% of the address balance exceeds 10 ETH. From this point of view, although the airdrop expectations of zkSync are still promising,
It has a certain appeal, but users prefer low-cost investment.
The participation of a large number of Rollup parties has also brought huge benefits to zkSync Era. The latest data from Dune shows that as of May 1, after deducting the cost of publishing data to L1 and the cost of verifying proofs on L1, zkSync Era's profit from Gas in the past four months was about 1,848 ETH, accounting for 10.3% of the total profit of the Rollup chain, but there is still a clear gap with Base, Arbitrum and Scroll, and the monthly profit has shown a trend of a sharp decline.
zkSync Era on-chain profits Data source: Dune@niftytable
Among them, since the beginning of this year, zkSync Era has received a total of 7,678 ETH in transaction fees, accounting for only nearly 17.3% of the total. And from the perspective of monthly transaction fee changes, it shows a continuous downward trend from month to month, among which the fees captured in April fell by about 88.9% compared with January; the cost required to send to L1 each month has dropped by nearly 96.2%, and the performance is still better than competing products such as Arbitrum, OP Mainnet, Base, Starknet and Linea; the cost of verification proof on L1 reached 1,541 ETH this year, accounting for 49.7% of the total. In other words, zkSync Era's on-chain profits mainly come from Gas income, but they have shrunk significantly.
L2 monthly transaction fee changes Data source: Dune@niftytable
User rights are ignored under intensive Rug, and the community accuses the official of inaction
The failure to protect user rights and official inaction are causing zkSync to lose the trust of the community.
Although there are many on-chain accidents and Rug incidents in the crypto dark forest, the zkSync ecological project and the official indifference to user rights are becoming one of the important reasons why its market scale is difficult to expand.
For example, the Zksync lending protocol Eralend suffered a total loss of approximately US$3.4 million due to a flash loan attack, but not only did it fail to recover the stolen funds, it also did not make corresponding compensation to users; after the zkSync ecological lending platform xBank Finance suffered a loss of US$550,000 due to a hacker attack, its liquidity was close to zero. Although it stated that it was contacting the attacker to recover user funds through white hat bounties, it also did not mention the issue of compensation for users; the decentralized entertainment platform ZKasino was questioned for soft Rug after forcibly exchanging more than 10,000 ETH user pledged deposits for platform coins. Afterwards, the official did not respond to the private modification of the rules and the whereabouts of the funds, and transferred the funds in batches. At present, the Netherlands Fiscal Investigation Bureau has arrested suspects in the ZKasino fraud case and seized his assets of 11 million euros.
Faced with the severe damage to user interests, zkSync officials have never made any relevant response or improvement measures, which also reflects its poor management of the ecosystem. The excessively low cost of doing evil has become one of the important reasons for its chaos.
In this regard, many community members expressed dissatisfaction that the zkSync team did not take on the responsibility of ecological construction, including supporting some high-quality projects, but allowed various Rug projects to run rampant. Although the official has repeatedly emphasized the importance of the community, it has turned a blind eye to the project's evil deeds and user rights. Compared with the community, zkSync is more concerned about Gas income.
From this point of view, at a time when L2 is being launched intensively in the market, as the airdrop effect becomes increasingly ineffective, if zkSync does not pay attention to ecosystem construction and user interests, it will face greater challenges.
What is zkSync
As applications such as DeFi and NFT become more popular, Ethereum faces severe scalability challenges. These challenges often lead to high transaction fees and network congestion. As a result, a number of Layer 2 solutions have emerged in the market to solve these problems, including zkSync.
zkSync is a layer 2 scaling solution that aims to provide cheaper and faster transactions than Ethereum mainnet (layer 1). By moving most activity off layer 1, it inherits Ethereum’s security and finality while reducing network congestion and transaction fees.
zkSync is built on the zero-knowledge (ZK) rollup architecture.
Introduction to the principle of zkSync
How zkSync works zkSync is part of a group of cryptographic solutions called rollps. More specifically, zkSync is a ZK rollup. (ZK stands for “zero knowledge,” a cryptographic term that means one party can prove to another party that something is true without any additional information)
Rollups work by compressing or “aggregating” off-chain transactions into smaller transactions, which are sent to Layer 1. By sending transactions back to L1, rollups inherit the security and results of the Ethereum blockchain.
There are two types of rollups: zero-knowledge ZK and optimization. Here we only discuss ZK rollups.
What is ZK rollup Each batch of transactions is sent to an off-chain validator, which generates a cryptographic certificate (called a SNARK in zkSync) to prove that these transactions are valid. Although it is difficult to generate the proof, it is easy to verify that the proof is valid. This means that it can be sent to L1 and verified in the smart contract. This makes transfers between L1 and L2 almost hassle-free.
zkSync and Dapps While Dapps will be able to be built on zkSync, the platform is not ready yet. It is compatible with the Ethereum Virtual Machine (EVM), which means you will be able to easily switch existing smart contracts on L1 to L2.
zkSync was developed by Matter Labs, who received funding from top investors such as the Ethereum Foundation and Union Square Ventures. zkSync has been operational since September 2020.
project financing
Since 2018, zkSync has completed 5 funding rounds, 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.
Financing:
$200 million Series C funding round led by Dragonfly and Blockchain Capital in November 2022
$200 million pledged from BitDAO in January 2022
$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
Features of zksync
Supports ETH and ERC20 transfers, L2 millisecond confirmation, L1 final confirmation within 10 minutes;
Mainnet-level security, no need to rely on third parties;
Create an account at zero cost;
Extremely low transaction fees (as low as $0.001);
Supports any valid Ethereum address (including smart contract addresses);
Support any token as payment for handling fees;
Withdraw funds from L2 to L1 in less than 15 minutes (OP Rollup takes at least 1-2 weeks);
Support multi-signature;
Support for smart contracts (coming soon).
ecosystem
Matter Labs claims that more than 150 projects have deployed or are willing to deploy on the chain. These pioneers have brought in $65 million in TVL, while most applications are still not live on the mainnet.
Deploying this number of applications on mainnet would make zkSync’s “big bang” the largest layer 2 launch in history, once again helping the chain achieve mass adoption.
Attracting major protocols like Uniswap, AAVE, Curve, etc. shouldn’t be a problem, given the chain’s mass adoption potential and the cash the team is ready to deploy to attract such protocols.
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 funds 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 funds will be allocated to R&D to improve zkProofs and related technologies
5% of the 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.
Investments will be selected by the decision-making committee based on the goals and objectives identified in Phase 1. These milestones may include the number of investments made, grants awarded, the impact of public goods funded, contributions to the DAO’s core tools, and any other metrics the Steering Committee and Funding Team decide to include.
Managing investments and cash outlays wisely will be critical for zkSync, as it will undoubtedly spend a significant amount of money acquiring users, driving growth, and achieving mass adoption before it can become self-sustaining (a strategy employed by Polygon).
How to get the zksync airdrop
Assist zkEVM to complete token exchange testing
As a Layer 2 extension on the Ethereum chain, zkSync is currently testing its own token exchange smart contract zkEVM. As an early participant, you can only use the test token (test token faucet) they provide to trade. The USDC, BTC and other tokens exchanged here have no real value and are only for testing purposes.
If you have prepared your wallet in advance, you can start the operation directly; if you haven’t prepared your wallet yet, it is highly recommended to use the hot wallet MetaMask. You can view relevant instructions here.
I believe that people who often use cryptocurrencies may find that the operating interface of zkEVM is very similar to Uniswap after seeing its website. This is because the basis of zkSync Swap is taken from the latter's open source UI and code.
How to test the redemption function using zkEVM?
Step 1. Go to the zkEVM portal and click Launch app.
Step 2. Connect your wallet to zkSync and select MetaMask.
Step 3. Multiple Metamask windows will pop up. Click approve to connect your wallet to the website and add zySync testnet to your wallet.
Step 4. After connecting to the website, the current USDC balance is zero. To conduct a token exchange test, please click "Request tokens from a faucet" below.
Step 5. The website will ask you to send a Twitter message to get test tokens. After the user sends or clicks on the tweet multiple times, he can successfully get 300 USDC test tokens.
Step 6. Select the token you want to exchange and enter the purchase quantity. Before trading, the user needs to allow the platform to use the USDC in the wallet. As can be seen in the figure, the operation interface omits some details and still displays "Uniswap".
Step 7. The platform can only exchange tokens after obtaining permission. At this time, click to confirm the exchange and complete the signing, and the exchange is completed.
Step 8. After completing the USDC exchange, you can also try to exchange other tokens in zkEVM.
