Ethereum, the leading blockchain for decentralized applications (DApps), is facing a significant challenge when it comes to scalability. As more users adopt the platform, transaction fees have skyrocketed, making it difficult for mainstream usage. However, there is hope in the form of ZkSync, a promising solution that aims to address this issue while maintaining Ethereum’s security and decentralization.
ZkSync is a scaling solution built on top of the Ethereum blockchain that utilizes zero knowledge (ZK) rollup technology. It leverages ZK-proofs, a cryptographic technique, to process transactions off-chain (layer 2 or L2) while still benefiting from Ethereum’s security features (layer 1 or L1).
Matter Labs, a team of blockchain engineers and entrepreneurs, is the brain behind ZkSync. Alex Gluchowski, co-founder and CEO of Matter Labs, is a prominent figure in the Ethereum community known for his contributions to scaling solutions. With their technical expertise and commitment to decentralization, the team has been instrumental in the success of ZkSync.
To further support its development, ZkSync has received investments from renowned firms like Andreessen Horowitz, Sequoia Capital, and Balaji Srinivasan. These investors provide crucial financial resources and strategic guidance, propelling ZkSync’s growth.
So how does ZkSync work? It bundles multiple transactions into a single batch, significantly reducing gas fees per transaction. These transactions are processed efficiently on layer 2, relieving the burden on the main Ethereum network. ZkSync generates cryptographic proofs (ZK-proofs) to validate the processed transactions without revealing their details. These proofs are then submitted back to the Ethereum mainnet for verification.
This approach offers several advantages, including scalability, lower fees, enhanced privacy, and security. ZkSync can handle thousands of transactions per second, thanks to its faster transaction processing compared to layer 1 solutions. By batching transactions, it also reduces gas fees, making it more cost-effective for users. Additionally, ZK-proofs provide privacy by concealing transaction details while verifying their validity. ZkSync also inherits Ethereum’s security through the underlying blockchain’s consensus mechanism.
What sets ZkSync apart from other layer 2 scaling solutions is its unique features. It was one of the first ZK-rollups to launch a mainnet, giving it a head start in terms of user adoption and development. Unlike some ZK-rollups, ZkSync avoids the use of a trusted setup, eliminating a potential centralization point. It also utilizes a novel approach called “Fractal SNARKs” to generate validity proofs, allowing it to scale efficiently with an increasing number of transactions. These innovations have attracted significant interest from the developer community, positioning ZkSync as a leader in scalable Ethereum solutions.
Since its mainnet launch in November 2020, ZkSync has experienced impressive growth. It has processed millions of transactions and has over $150 million worth of crypto assets locked within its network. This indicates user confidence in the platform, and a thriving developer ecosystem is emerging around ZkSync with various DApps and projects integrating with it.
Another L2 scaling solution that is worth mentioning is StarkNet. While ZkSync prioritizes general-purpose smart contracts and interoperability with existing Ethereum tooling, StarkNet uses zk-STARK proofs and offers superior scalability. However, StarkNet requires a specific programming language for smart contracts, called Cairo.
Building on ZkSync unlocks exciting use cases that are challenging or expensive to implement on layer 1. It is ideal for blockchain-based games that require frequent microtransactions, as well as decentralized finance (DeFi) protocols that can offer low-cost, high-speed financial services. The non-fungible token (NFT) market, driven by the crypto community, can also benefit from ZkSync’s cost-effective platform for minting and trading NFTs. These use cases demonstrate ZkSync’s potential to revolutionize various blockchain applications by addressing scalability bottlenecks.
To participate in the ZkSync ecosystem, users need to bridge their assets between layer 1 (Ethereum mainnet) and layer 2 (ZkSync). This introduces an additional layer of complexity and potential risks. Several bridge solutions facilitate asset movement between Ethereum and ZkSync, including Matterport (ZkSync’s official bridge) and generic bridges like Synapse. Users must do their due diligence and consider the risks associated with using bridges, as they rely on smart contracts and can be susceptible to hacks or exploits if not properly secured.
When it comes to wallets that support ZkSync, popular options include MetaMask, Argent, and the official ZkSync portal’s built-in wallet. Coinbase Wallet does not natively support ZkSync as of May 2024, so users would need to use a bridge to move funds from Ethereum to ZkSync. Trust Wallet also does not directly support ZkSync, but users can utilize a bridge to interact with DApps or transfer assets from a supported network to ZkSync.
It’s important to note that while bridging assets offers convenience, it also introduces risks. Users should choose established bridges with a strong security record and undergo regular audits. They should also be aware of impermanent loss risks when using liquidity pools within bridges and avoid transferring more assets than they plan to use immediately to minimize exposure to bridge risks.
By following best practices and making informed decisions, users can bridge their assets and participate in the ZkSync ecosystem with confidence.