History of zkSync:
Zero-knowledge rollups (zkRollups) were developed by Germany-based Matter Labs in 2020 and can process up to 3000 transactions per second (TPS). As the network expands, Matter Labs introduced the zkEVM testnet in 2021, marking zkSync as the first zkRollup to run Ethereum native smart contracts. Using zkPorter, a sharding solution to increase throughput from 3000 TPS to 20,000 TPS, Ethereum’s scaling potential can jump from 3000 TPS to 20,000 TPS.
Current status of zkSync:
Although zkSync currently lacks a native token, investors are excited about the potential offering of a zero-knowledge proof system. For example, zkSync could introduce tokens for investors to stake and become zkSync network validators. The company has hinted at a zkSync airdrop for its users and loyal supporters. In particular, zkSync’s fee support is user-friendly, allowing payments to be made with alternative cryptocurrencies, such as stablecoins like Tether. Moreover, zkSync’s transaction times are noticeably shorter, taking about three hours for funds to appear in a user’s account after a withdrawal. Additionally, zkSync transaction fees are significantly lower at approximately RMB 1.5 compared to approximately RMB 75 on the Ethereum mainnet.
Advantages and disadvantages of zkSync:
The biggest advantage of zkSync lies in its faster speeds and the elimination of common gas fees, a significant obstacle to Ethereum transactions. Additionally, zkSync’s technology enhances privacy protection. However, the lack of synchronization between major wallets and exchanges that support layer 2 networks carries risks. Users may accidentally send transactions for exchange to Layer 2, which may result in irreversible transaction loss. Moreover, zkSync is still in the development phase but faces complexity risks due to generic EVM support. These complexities and evidence generation challenges during transaction processing pose significant obstacles.
DApps running on zkSync:
Major DApps utilizing zkSync include Curve Finance, Yearn Finance, Taker Protocol, Argent wallet provider, and ZigZag decentralized exchange (DEX). These DApps are already operating on trustless layer 2 protocols like zkSync and are exceeding our initial expectations for the development of zk-Rollup. Eventually, Ethereum will serve as a data availability layer for these L2 technologies.
Outlook for zkSync:
Within Ethereum’s continued importance, questions remain about the reliability of zero-knowledge proof systems as a long-term utility. Nonetheless, zkSync has the potential to streamline Ethereum transactions, making them more efficient and cost-effective. Several DApps are already operating on trusted layer 2 protocols such as zkSync. This acceleration in zk-Rollup development suggests a faster pace than expected. Ultimately, Ethereum will serve as a data availability layer for these L2 technologies.
Investing in cryptocurrency carries risk, so it is important to conduct thorough research and seek professional advice before making any financial decisions. (This post is for informational purposes only and should not be construed as financial or investment advice.)