zkSync is emerging to be a strong candidate for Ethereum’s scaling solution. As ZkSync Ecosystem growing very fast you should know about all those opportunities to Grab first mover advantage of a project. So Let’s explore and take a deep dive in zkSync ecosystem. zkSync,a L2 solution that raised a quarter billion dollars. At the moment, Ethereum is now incurring lots of challenges that need to be addressed. Layer-2 projects come as the scaling solutions for Ethereum, enabling the network with more intense scalability.
Many big projects have joined the scalability battle to be the dominant solution on Ethereum. If one can stand out, it will take over the cake. They create a complex matrix of scaling solutions based on various scaling techniques. Layer-2 Scaling Solutions on Ethereum, Besides the top-notch Polygon (MATIC) using State Channels, ZK-Rollups and Optimistic Rollups are the two key drivers that are on the same race to get widely adopted by the Ethereum ecosystem.
A closer look in ZK-Rollups, there is also a battle between Starkware and Matter Labs to land the product to the community. zkSync by Matter Labs is now emerging to be a competent opponent to StarkEx & StarkNet by Starkware.
What is zkSync?
zkSync is a Layer-2 scaling solution developed by Matter Labs to tackle the current challenges of the Ethereum Network. Its goal is to reduce transaction fees, increase verifying speed while maintaining the high level of security inherited from Ethereum by using the ZK-Rollup technology.
zkSync 2.0
In short, zkSync is mainly designed for token transfers and as a payment means while zkSync 2.0 is built for Dapp deployment with the EVM-compatible feature, which is a huge difference. As today talking about zkSync, most will refer to zkSync 2.0 instead of the older version. Its public Testnet went live in February 2022 on Ethereum’s testnet.
This article will have a quick overview of Top product build in or switch to zkSync ecosystem to solve ethereum gas fees and scalability issue.
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zkSync Ecosystem
At the moment, there are 74+ projects inside the zkSync ecosystem, ranging from DeFi protocols to products that reach the user frontier such as Wallet and Payments. In this Smart Contract phase, zkSync welcomes developers/builders to the ecosystem to deploy their prominent ideas.
The number of projects on zkSync is constantly growing as the L2 solution is getting adopted by the community. On the other hand, over half of them is still under development, they need time to deploy their ideas.
zkSync’s TVL vs. Other L2 solutions’ TVL
zkSync ranks 7th in the L2 leaderboard by the TVL number, showing that the zkRollup solution is steadily taking steps to outpace other L2 solutions such as Boba Network, Loopring, Optimism, Metis,… The TVL of zkSync has astronomically increased by 85% in only 7 days of March 2022. The TVL hike has spurred lots of attention from the community.
After getting some quick introduction, let’s take a closer look at every lego part making up the ecosystem in the following sections.
DEX
1Inch has a good relationship with zkSync since the platform often retweets and mentions the scaling solution on Twitter. Even though no official announcement has not been published yet, 1Inch’s future on zkSync is predictable.
Mute.io is an AMM, farming and IDO platform built on zkSync. It released the Testnet version in February 2022 with basic features such as AMM Swap, Pool, Farming on Testnet.
Zigzag, a non-custodial order-book exchange, is one of the first movers on zkSync (not 2.0) to go mainnet. As shown in the following picture, Zigzag generated a 7-figure number ($3.9M) 24h trading volume with the ETH/USDC pair. Without a doubt, Zigzag is the Uniswap of zkSync.
Zigzag on zkSync mainnet
In every emerging ecosystem, DEX is always the first lego part to be built for swapping tokens and increasing liquidity in the ecosystem. Mute.io and Zigzag are the go-to DEXs for native swaps on zkSync while 1Inch plays as an aggregator to offer the best swapping rate for users.
To reiterate, zkSync 2.0 with zkEVM is running Testnet. Hence at the writing time, there is no AMM DEX in operation. However, we can expect more non-native and native protocols to join the ecosystem.
Lending/Borrowing
Yearn Finance acknowledges that the L2 migration is happening. The yield platform is expanding to many L2s. Users can connect to Yearn via Argent on zkSync.
Taker Protocol allows users to collateralize various asset classes such as NFT and lend liquidity to other protocols.
Lending/Borrowing is an integral part of DeFi since it can leverage the capital for a higher level of capital efficiency. Yearn Finance and Taker Protocol adopts zkSync to provide DeFi lending/borrowing services.
On the other hand, on zkSync, there is still a dearth of native lending/borrowing protocols. This is understandable that big DeFi protocols via zkEVM come to the ecosystem faster than crypto builders work on native protocols.
DAO
DAOs are being developed on zkSync: OlympusDAO, Aragon, zkDAO, Trustless, etc. They are officially listed on the ecosystem website of zkSync, but the information about the integration is limited. This is understandable since DAO is hard to thrive when there is still no actual DEX on zkSync.
Crypto protocols on zkSync are building the DAO feature quite soon as the zkSync ecosystem still lacks many integral DeFi components. Developing DAO can ensure that the community will ultimately be granted control of the protocols on zkSync. At the writing time, no DAOs are in operation, but big protocols have rolled in and been building the DAOs. Therefore, DAO is an executable reality on zkSync.
Bridge
A layer-2 solution always needs bridges to connect to the Layer-1 and other compatible Layer-2s. zkSync prioritizes integrating widely-used bridges to facilitate users to the ecosystem. Connext, cBridge (Celer), Multichain, Nomad, deBridge, etc are used not only by zkRollup solutions but also other Rollups.
Payment and Wallet
Since the advent of the first version of zkSync, Matter Labs acknowledged that the solution must be able to conduct payment transactions and token transfers. As a result, zkSync is integrated into many up-to-date wallets such as Argent, Mathwallet, Zerion, imToken, zkSync Wallet, Numio, etc.
There are 4 out of 10 wallets supporting zkSync that went live. Based on that information, we can expect a more extensive adoption of zkSync among crypto wallets, esp. Metamask. They are multi-chain crypto wallets, there is no single-chain wallet being built on zkSync,
ZkSync Token AirDrop
zkSync has already announced that they will launch their native token in the future. Trying out the mainnet and testnet may make you eligible for an airdrop in the future. Simple way to get eligible for AirDrop is play with all ZkSync ecosystem project as early as possible.