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zkSync (ZK)

ZKSync is a layer-two blockchain solution for Ethereum that uses zk-rollups as its scaling technology. Similar to optimistic rollups, zk-rollups consolidate transactions off the Ethereum mainnet and submit the transaction proofs to Ethereum. This process batches hundreds of transactions into one, which is then verified and secured by the Ethereum network.

Zero-knowledge-proof systems offer proactive cryptographic security. For example, zk-rollup solutions can confirm the validity of a transaction without revealing the underlying proof. In simpler terms, zk-rollups operate on a "trust me on this" principle. Although this might seem counterintuitive to a layperson, zero-knowledge proofs are regarded as one of the most promising scaling and privacy solutions for Ethereum.

What is zkSync?

ZKsync, developed by Matter Labs, is a trustless protocol utilizing ZK-rollup technology. As a Layer 2 scaling solution now operational on the Ethereum Mainnet, ZKsync provides low gas fees and rapid transactions while ensuring high security through zero-knowledge proofs.

ZKsync distinguishes itself among existing Layer 2 scaling solutions with its exceptional usability and security. Unlike comprehensive Layer 2 schemes like Plasma and state channels, which shift computations and data off-chain and can potentially compromise security, ZKsync addresses this issue with its hybrid Layer 2 rollup technology.

By moving computations off-chain and keeping some data on-chain, ZKsync achieves high efficiency. Zero-knowledge succinct non-interactive argument of knowledge (ZK-SNARK) proofing facilitates quick verification and uses less storage than traditional smart contracts. This results in faster and more cost-effective validations compared to other scaling solutions.

Founders & Team

ZKSync, developed by Matter Labs—a German-based company focused on scaling Ethereum—initiated work on its zkSync solution in December 2019, launching zkSync v1.0 in June 2020. This initial version could handle 300 transactions per second.

The advancement to zkSync 2.0 introduced the alpha version of zkEVM, facilitating Ethereum Virtual Machine (EVM) compatibility within the rollup environment. Additionally, the development of zkPorter, a sharding solution, aims to increase throughput from 3,000 transactions per second (tps) in version 1.1 to 20,000 tps.

Matter Labs secured $2 million in seed funding in September 2019 and an additional $6 million in a Series A round in February 2021 from prominent crypto companies like Binance, Aave, Curve, and Coinbase Ventures. The Series B round in November 2021 brought in another $50 million from venture capital firms such as a16z, Dragonfly, and Placeholder. In January 2022, BitDAO backed the company with an additional $200 million.

Working of zkSync

ZKsync employs ZK-rollup technology, which processes transactions off the main Ethereum blockchain to enhance scalability and reduce costs. ZK-rollups batch transactions off-chain, submitting a single proof representing these transactions to Ethereum. This method minimizes the data processed on the main chain.

By using zero-knowledge proofs, particularly ZK-SNARKs, ZKsync ensures that off-chain transactions maintain the same security level as on-chain transactions on the Ethereum Mainnet. Consequently, ZKsync delivers fast transactions and low fees while preserving the network's security and integrity.

Use Cases of zkSync

▪️ Account Abstraction: ZKsync introduces Account Abstraction to improve user experiences with Ethereum and smart contracts, aiming for seamless integration similar to Web 2.0 interfaces. This feature simplifies interactions by allowing flexible authentication methods beyond traditional private key signatures.

For example, ZKsync supports contract-based accounts, enabling functionalities like multi-signature setups and automated transactions. This not only streamlines the onboarding process but also enhances security through customizable permissions, facilitating smoother operations within decentralized applications.

Account Abstraction in ZKsync can significantly lower the barrier to blockchain adoption, making it more accessible and user-friendly.

▪️ Scalability Through Off-Chain Transaction Processing: By processing transactions off-chain and batching them into single proofs for Ethereum, ZKsync significantly reduces gas fees and enhances throughput. This makes it highly efficient for both regular transactions and complex smart contracts.

▪️ EVM Compatibility: ZKsync maintains Ethereum Virtual Machine (EVM) compatibility, allowing developers to deploy existing Ethereum smart contracts on ZKsync without significant changes. This is crucial for developers seeking scalability solutions without sacrificing the vast ecosystem of Ethereum-based DApps.

Latest & Future Developments 

▪️ PancakeSwap to Airdrop 2.4M ZK Tokens as Community Reward

PancakeSwap, a leading multichain decentralized exchange (DEX), has unveiled a major reward initiative for its community. Beginning on July 5 and concluding on August 5, the platform will distribute 2,452,128 zkSync (ZK) tokens to acknowledge the community's ongoing support for the zkSync PancakeSwap deployment since July 2023. 

This initiative follows PancakeSwap's impressive milestones of exceeding $3 billion in trading volume, $5 million in total value locked (TVL), and engaging over 1.9 million traders.

▪️ zkSync Refutes NFT Insider Minting Allegations

Matter Labs, the developer behind the Ethereum layer 2 network zkSync, has denied accusations of “insider minting” of Libertas Omnibus non-fungible tokens (NFTs). On June 26, Matter Labs stated that all minters met the official eligibility criteria. This statement responded to a June 17 post by blockchain researcher soEasy, which alleged that the team distributed Libertas Omnibus NFTs to ineligible friends, allowing them to mint ZK tokens without meeting the airdrop requirements.

A Matter Labs representative clarified to Cointelegraph that “there were no invalid mints.” They explained that users had several ways to mint the Libertas Omnibus NFT. One group of eligible users consisted of those who interacted with the top 100 zkSync NFTs, while another group included event attendees who scanned a single-use QR code at their booth or table to mint the NFT.