ZKsync: An Ethereum Layer-2 Solution

Modified on Mon, 6 Oct at 11:35 AM

As blockchain technology continues to grow, the number of users continues to increase. This results in an increasing number of simultaneous transactions the blockchain has to process, which eventually leads to a buildup of a backlog of incomplete transactions for the blockchain, causing the chain to run slower, and cost more. This is known as the scalability problem, and to address this, zero-knowledge solutions are implemented to tackle this constantly growing problem.

What is ZKsync

ZKsync is a trustless layer 2 protocol implemented on the Ethereum blockchain. ZKsync uses zero-knowledge rollups (zk-rollups) and zero-knowledge proofs (ZKPs) to bundle transactions to be processed off-chain, helping to reduce the number of transactions the chain has to process, reducing costs and increasing processing speed.

Who's the Genius Behind ZKsync?

Alex Gluchowski, the Founder of ZKsync. Source: IQ.Wiki

ZKSync was founded in 2018 by Matter Labs, led by Alex Gluchowski. Prior to co-founding Matter Labs, Gluchowski developed and managed software companies like ExpoGlobus and Entropy Labs. Matter Labs is focused on scaling the Ethereum network.

ZK-Rollup technology enables efficient processing of a large number of blockchain transactions on Layer 2. These transactions are then summarized into smaller, easily processed data and recorded on the main network, while maintaining security and decentralization.

Source: Medium

Matter Labs raised $50 million in Series B funding in late 2021 to develop ZKSync v2, which launched its first testnet the following February. The company secured an additional $200 million in Series C funding in November 2021, with backing from investors including Andreessen Horowitz and Blockchain Capital. ZKSync 2.0 aimed to enable anonymous identity verification.

In 2023, the protocol rebranded: ZKSync 2.0 became ZKSync Era, while ZKSync 1.0 was renamed ZKSync Lite. A major milestone was reached on March 24, 2023, with the launch of the ZKSync Era mainnet, introducing the zero-knowledge Ethereum Virtual Machine (zkEVM).

ZKsync Features

Security: As secure as Ethereum without relying on third-party intermediaries.
Accessibility: Offers unrestricted EVM compatibility, enabling the development of diverse dApps and reaching a wide user base.
Scalability: Achieves high scalability through off-chain transaction processing, significantly reducing fees for both standard transactions and complex smart contracts.
Compatibility: Maintains core Ethereum Virtual Machine (EVM) functionalities.
Innovation: Leverages account abstraction based on EIP-4337, a feature also implemented in Ethereum and other rollups.

ZKsync Token

ZK is the native token of the ZKsync ecosystem. It grants holders governance rights, allowing them to participate in network development through voting, potentially via a delegation process. Additionally, ZK can be used to pay for network services. ZKsync’s native account abstraction supports the use of various tokens, including ZK, for transaction fees. As the ZKsync ecosystem expands with the launch of more ZK chains, the ZK token is poised to play a pivotal role in future innovations.

Supply and Token Distribution

Source: ZK Nation

There are a total of 21 million ZK coins divided into three categories:

Community Allocation (66.6%): Two-thirds of the total supply is reserved for the community. This includes a 17.5% airdrop, with the remaining portion to be distributed by the ZKsync Foundation under the oversight of ZK Nation to support ecosystem growth and new user acquisition.
Development and Investor Allocation (33.3%): The remaining third is allocated to development and investors. Matter Labs, the development team, will receive 16.1%, while investors will hold 17.2%. These tokens will be locked for the first year and unlocked gradually over the subsequent three years, from June 2025 to June 2028.

Interesting information about ZKsync Token

According to CoinMarketCap data from 14 July 2024, ZK token ranks 104th among all cryptocurrencies, with a market capitalization of $571,722,151 or approximately 20,664,512,854 Thai baht.

At the time of writing, ZK traded at around $0.1556, or approximately 5.70 baht per coin. The token's all-time high was $0.3098 or roughly 5.94 baht, reached on 17 June 2024.

References