The ZK Rollup track is getting crowded, what is the first-mover advantage of zkSync Era?

Sold by: DODO Research

Editor: yaoyao & Lisa

Author: dt

The expansion mechanism of the second layer of Ethereum is the prominent science of today’s blockchain, and it is also a battleground for military strategists.

This article will introduce zkSync, the first layer-2 network that uses zk-rollup technology on the main network, from the introduction of the public chain itself to the development of ecological projects, and a comprehensive analysis from the fundamentals, data, and ecosystems.

I. Introduction to zkSync Era

zkSync is an Ethereum layer-2 expansion solution based on the zk-rollup architecture, designed to achieve high-performance, low-cost smart contracts and blockchain applications. It uses zk-rollup technology to achieve high-throughput expansion to reduce transaction costs and increase confirmation speed. zkSync Era is built on the basis of the zkSync protocol, featuring faster transaction speeds, higher scalability, and more cost-effectiveness. It is applied in many fields such as DeFi, cross-chain bridge, NFT and so on. Due to its high efficiency and low cost, zkSync has received extensive attention from the capital market and is developing rapidly.

Matter Labs, a zkSync development company, has completed a total of four rounds of financing, and the current total financing amount has reached 458M US dollars. Well-known venture capital a16z, Dragonfly, 1KX, OKX Ventures, bybit, Blockchain Capital all participated in the investment. Looking at the past, whether it is in the field of WEB3 or WEB2, this amount of financing is an amount that cannot be ignored, and it is the leading unicorn project in the blockchain project.

Strong financing background, cutting-edge technology, and the first batch of players in the zk-rollup technology that Vitalik, the founder of Ethereum, once praised, is one of the few zkEVM rollups that have been launched. Whether it is narrative, capital, or practical aspects, zkSync Era is a leader. The blockchain world’s desire to pursue new things also makes zkSync Era arguably the most eye-catching and hottest public chain in 2023.

zkSync Era History

zkSync 1.0 - zkSync Lite was launched on the Ethereum mainnet on June 15, 2020, achieving a transaction throughput of about 300 TPS, but it is not compatible with EVM.

zkSync 2.0 - zkSync Era launched on March 24, 2023, supporting Solidity (via zkEVM) and Zinc (rollup’s internal programming language) to implement arbitrary smart contract functions; secondly, via zkPorter - a combination of zk-rollup and sharding protocol, the throughput increases exponentially, reaching 20,000+ TPS.

The biggest selling point of zkSync Era compared to zkSync Lite is that it is compatible with EVM, and can execute smart contracts written in Solidity or other high-level languages used in Ethereum development, attracting more developers and users to seamlessly connect to the ecosystem. In addition, the transaction cost is 50 times lower than before, and the speed of 20,000 TPS also makes the user experience a long-term improvement compared with Ethereum itself or zk lite.

The opponent of zkSync

The opponents of zkSync are undoubtedly various public chains in the L2 track. In addition to the mature and leading Arbitrum One & Optimism, many latecomers who use zk-rollup are opponents of zkSync that need more attention:

Including Polygon zkEVM, which is currently online, Starkware, which is well-known and invested heavily by many capitals, Linea developed by Consensys, Scroll, which is also dedicated to the development of zkEVM, Aztec, which focuses on privacy, and two second-tier solutions funded by exchanges, OKX Invested in Taiko and bybit invested in Mantle. Even Optimistic Rollup Metis, which has already been launched, announced that it is actively developing Hybrid Rollup based on zk-rollup combined with the current Optimistic Rollup. Finally, there is Kakarot, which has attracted attention because of Vitalik’s personal investment in the Pre-Seed round.

At present, zkSync can be said to have a 100% first-mover advantage. In the future, how to continue to lead and bring users a good experience, and how to cultivate the ecology in addition to the technical aspects are the most important things.

II. zkSync Era Data Overview

Before introducing the ecological projects in detail, let us first understand the current status of the zkSync Era ecosystem from the data such as TVL, official bridge entry and exit, and daily on-chain transactions.

Judging from the TVL data on the chain, the total TVL of the zkSync Era ecosystem has reached 459M USD in only 2 months since its launch. It has maintained a steady growth in TVL since its launch, and currently ranks third in Layer2 Rank, second only to Arbitrum One & Optimism that uses Optimistic Rollup.

source: l2beat.com/scaling/tvl

source: dune.com/makaineko/zksync-era-airdrop-criterion

The zkSync Era official bridge data is also in line with the rising trend of its ecology. The accumulated deposit addresses have reached 800K, and the average daily new deposit addresses since June are about 10K.

source: dune.com/makaineko/zksync-era-airdrop-criterion

On the other hand, judging from the daily transaction TX number of zkSync Era, it fell from a high of nearly 100K transactions at the beginning of its launch to a minimum of 1300 transactions in a single day in early May, and is currently rising steadily at around 20K transactions per day. The reason may be that there is currently no killer DAPP on zkSync Era, and the transaction volume surged due to the novelty in the initial stage of launch.

source: dune.com/sixdegree/zksync-airdrop-simulation-ranking

To sum up, its ecological profile is still in a very early stage, and it is not easy to achieve such results after only being online for less than three months. At present, it has passed the early stage of fomo and is steadily rising. It is expected that there will be breakthroughs in the deployment of more projects on the chain.

III. zkSync Era ecological project introduction

Veteran Items

zkSync Era was promised to be deployed by many project parties before it was launched, including Balancer, Uniswap, Frax, OHM, LayerZero and other well-known old protocols on the mainnet, but not many have completed the deployment so far. 1inch and iZUMi Finance are the largest established agreements that have been officially launched.

1inch Network

The 1inch aggregator is one of the cornerstones of the Defi project. It officially landed on zkSync Era on 4/20 and became the 11th public chain deployed. With 1inch, it means that the split liquidity on the chain has a good entrance, and users can exchange tokens It is no longer necessary to think about which DEX operation to go to, effectively promoting ecological development.

iZUMi Finance

iZUMi is also a Defi project with multi-chain deployment. It was deployed at the beginning of zkSync Era. It is the first batch of old-fashioned protocols that are most active in deploying zkSync Era. iZUMi’s TVL on zkSync Era is quite impressive and currently ranks second on the chain The project has become a strong contender for the zkSync Era DEX track.

Looking at the head project of zkSync Era from TVL

source : Era?tvl=true

From the statistics of Defillama, it can be seen that the development of the chain is very early. The top five locked positions are all DEX decentralized exchanges, and the top ten have eight DEX projects, and the remaining two are lending projects. More complex tracks such as derivatives and GameFi have not yet had strong competition By. The following is a breakdown of the projects by category.

DEX decentralized exchange

SyncSwap

SyncSwap is a decentralized exchange built on zkSync Era. It has the characteristics of low fee cost, and at the same time inherits the complete security of zkSync.

Features of SyncSwap include support for pool gauges, custom fee structures, advanced routers, voting escrow token models, governance, and more.

Recently, SyncSwap launched Move, a cross-chain bridge based on the official zkSync Era bridge, which allows transfers between Ethereum and zkSync Era, and supports USDC, ETH, USDT, WBTC, LUSD, LSD, MUTE and other assets. In fact, Move can be understood as the third-party front-end of the zkSync Era official bridge, which has the same gas cost as the zkSync official bridge, and the bridge token is 100% zkSync native assets, with no third-party risk. When users approve or transfer funds with Move, they interact directly with the official zkSync smart contract.

iZUMi Finance

iZiSwap is an on-chain order book DEX launched by iZUMi Finance, a one-stop liquidity-as-a-service DeFi protocol, on zkSync Era. It adopts iZUMi’s discrete liquidity AMM (DL-AMM), similar to Uniswap V3 centralized liquidity, DL-AMM Liquidity can be allocated at any fixed price, improving capital efficiency.

iZiSwap is the continuation of the automatic market maker (AMM) DEX represented by Uniswap. Its innovative design not only improves the efficiency of liquidity supply, but also greatly enriches the user’s trading experience, making iZiSwap stand out in the competition of decentralized trading platforms.

It is worth mentioning that iZiSwap has launched a fully decentralized limit order book model. During the trading process, all limit orders on a single point are treated as a whole. This method can greatly improve the efficiency of the transaction and ensure that the transaction is completed within O(1) time. Second, whenever the price crosses a price point, the filled order volume is transferred to a separate storage space called legacy. This design enables the system to clearly distinguish the sequence of orders, thereby ensuring the correctness of transactions.

Finally, the user needs to claim the transaction assets by himself. This is a necessary restriction as it ensures that users have full control over their assets and avoids security issues that may arise due to automatic asset transfers.

Such a design brings a series of good properties. First of all, because the limit order on a single point as a whole can complete the transaction in O(1) time, which greatly improves the efficiency of the transaction. Secondly, when the price passes through the target price (time point A) and then falls back (or crosses) the target price (time point B), the limit order after time point B will not be recorded as a transaction status, This guarantees the correctness of the transaction. Finally, when the price is at the target price, the part of the transaction will be obtained by the user who initiated the claim operation first, which ensures fairness in the sense of first-come-first-served.

In general, iZiSwap’s innovative limit order management method has brought significant improvements in terms of security, efficiency, and fairness, providing users with a better trading environment.

Maverick Protocol

Maverick Protocol is a DeFi liquidity infrastructure designed to provide a liquid market for traders, liquidity providers, DAO funds, and developers, powered by Maverick AMM.

Users can trade and provide liquidity on Maverick AMM. There are 4 different types of liquidity modes: Mode Right, Mode Left, Mode Both and Mode Static, after choosing a mode, the AMM will automatically move its liquidity to follow the price according to a specific set of rules. Maverick Protocol allows LPs to open Boosted positions, use incentive rewards to accurately attract liquidity, and other users can add liquidity to Boosted positions to purchase shares. LP can obtain income from transaction fees and LP incentives.

Mute

Mute.io is a zkRollup-based DEX on zkSync Era. It includes modules such as limit orders, pledge platforms, and bond platforms. It supports wallets, transactions, LP pools, Amplifiers, bonds, and DAO governance functions. It allows ETH, USDC, MUTE, WISP, ZKINA, MVX, IDO, WETH, USD+, ZKDOGE, DOF, BOLT, ZKFLOKI and other assets for trading and liquidity supply. Users can obtain LP tokens after providing liquidity in the LP pool, and pledge them into Amplifier to obtain income.

Bonds are an innovation of Mute. Users can use their LP tokens to purchase MUTE from Mute DAO at a lower price (bond). After buying a bond, MUTE will be released after 7 days. If the ROI is positive, the user can earn Take more MUTE than LP tokens. Through bonds, Mute DAO can increase the liquidity owned by the agreement, increase treasury revenue and the long-term liquidity of the agreement. dMute is the DAO token of the Mute.io ecosystem. Users need to lock MUTE for 7 to 364 days, and get dMUTE in return. After the lock-up period, users can redeem MUTE.

SpaceFi

SpaceFi is a Web3 platform that connects the Cosmos ecosystem and Ethereum Layer 2. Its products include DEX, NFT, Starter, Spacebase, and there will be new products such as Game and Social Network in the future.

SpaceFi supports ETH, USDC, SPACE, WETH tokens for trading and adding liquidity. Users can pledge single currency such as xSPACE and LP tokens such as SPACE-USDC to participate in mining in the Space Farm to obtain xSPACE rewards. Starter is Space’s incubation and fundraising platform. Users can pledge LP tokens such as USDT, ETH, or SPACE-USDC to obtain a share of project tokens at the initial issue price. Spacebase is an on-chain community of Space. By creating or joining Spacebase, users can get more mining rewards. Planet NFT is minted by SPACE tokens, NFT holders can issue on-chain proposals, and both Planet NFT holders and xSPACE holders can participate in governance voting.

Velocore

Velocore is the first ve(3,3) DEX based on Velodrome Finance and Solidly codebase in zkSync Era.

The core function of Velocore is to allow users to trade digital assets at low cost and low slippage. Users can add liquidity to the LP pool (divided into Stable Pool and Volatile Pool), and use LP tokens to obtain VC token incentives. VC is the native token of Velocore. VC holders can vote for escrow tokens and exchange for the governance token veVC (veNFT). veVC can be transferred, merged and split. The VC lock-up period can be up to 4 years. The longer the release time, the higher the voting weight and rewards veVC holders will receive. veVC holders can also obtain agreement fees, bribes and kickbacks. Bribes can be used to encourage other users to vote for LP pool rewards. Velocore also has Launchpad and launched memecoin WAIFU.

veSync

veSync is also the ve(3,3) DEX on zkSync Era and a fork of Velodrome Finance. veSync’s TVL on the zkSync Era is approximately US$4.85 million, ranking seventh, with an increase of nearly 20% in the past 7 days.

The native token of veSync is VS, and the governance token is veVS (veNFT). veVS can be transferred, merged and split. veSync leverages the ve(3,3) incentive model, token holders can vote to escrow their tokens to receive veNFTs, longer vesting periods lead to greater voting rights and rewards. There are two types of veSync liquidity pools, Stable Pools and Volatile Pools, with transaction fees ranging from 0.02% to 0.05%. In the future, veSync will launch Concentrated Pools, allowing users to customize the range of liquidity provided. Users choose specific pools to vote and receive bribes.

eZKalibur

eZKalibur is a new DEX that just launched this week. It raised a total of 653 ETH during the token fundraising stage. Based on the fork project of Arbitrum’s head DEX Camelot, it imitates Camelot xGrail and adopts a special token lock-up dividend mechanism. In addition, it has a lauchpad Function, the project has not been online for a long time, so you need to pay attention to security risks.

Lending Lending market

Borrowing has always been the most important infrastructure in all public chains except DEX. However, because chainlink has not yet connected to zkSync Era, and currently uses the oracle machine provided by Redstone Finance, giant whale users dare not use it, and in zkSync Era There are only two large assets of ETH & USDC, and there are not many real usage scenarios, so the lending field is a tepid existence in the zkSync Era, and most users may be short hunters or DEFI farmers.

Eraling

Eralend, formerly known as nexon finance, is a compound fork protocol like ReactorFusion. There is not much innovation in terms of mechanism. This project was once mentioned in the zkSync Era official Twitter tweet introducing the ecological project, and the protocol has not yet issued governance tokens. This may have attracted a large number of short hunters to participate. At present, TVL and ReactorFusion are evenly matched at $5M, which is the top lending market on the zkSync Era.

ReactorFusion

ReactorFusion is the first project launched by velocore lauchpad. The protocol itself is a compound fork and a unique bribery reward token mechanism. Its token ecology is highly bound to velocore. The current TVL scale is about 5M US dollars.

CDP Overcollateralized Stablecoin

Overnight USD+

Overnight is a multi-chain project started from polygon. It currently supports five public chains, including Polygon, BSC, OP, ARB and zkSync Era. It is also one of the few protocols that can be quickly deployed across chains when zkSync Era is launched. The product is the income stablecoin USD + linked to USDC and the delta neutral income generation strategy treasury ETS. The project has been online for about a year, and the team is relatively reliable. It is suitable for DEFI farmers who are pursuing high returns on stablecoins.

Derivatives Derivatives

Unidex

Unidex is also a multi-chain deployment project. Its main product is a decentralized perpetual contract exchange. It is characterized by the ability to integrate the depth of other perpetual contract exchanges and provide functions such as limit orders, stop-loss and other functions. In addition to trading encryption In addition to assets, there are commodities such as US stocks and foreign exchange. It is an on-chain perpetual contract aggregator. Other products also have functions such as spot transaction aggregator and limit order.

other projects

Kreatorland

Kreatorland is a one-stop NFT project provided by Opensea Fork on the zkSync Era chain. It is one of the projects mentioned in zkSync Era’s official Twitter tweet. It provides users with the service of minting and issuing NFT. Launched an NFT Poop Genesis.

Goal3

Goal3 is a gaming platform project on the zkSync Era chain, and it is also a project shared by the official zkSync Era. Its token $ZKG Lockdrop activity attracted a total of 2.8M USDC to participate, and the addresses locked for one year accounted for nearly 50% % , the funds locked in its Lockdrop activity are used for the depth of the gaming market. At present, the beta version of the project has been launched, and users can bet on various sports events on this platform.

Summarize

zkSync has a rich history and a promising future. With the continuous advancement of Ethereum technology, the competition in the field of zk-rollup or zk-EVM is also intensifying. zkSync Era occupies the pioneer position to give priority to the establishment of ecology. At present, it has been proved from the ecological system on the data surface that the overall public chain of zkSync Era is currently in a stable upward stage.

From the number of protocols, it can be seen that the most mature development in the zkSync ecosystem is the DEX track. Whether it is the traditional Uni v2 fork, ve(3,3) solidly fork, or DEX with concentrated liquidity, all have achieved good results. On the contrary, the track of lending, derivatives, NFT, or GameFi is currently not obviously capable of innovation. With the emergence of applications that attract users, it can be expected that with the deployment of more infrastructure projects including cross-chain protocols, oracles, and stable coins, more interesting Defi Lego projects will emerge.

At the same time, it should be noted that while the ecology is booming, various Rug Pull events have emerged one after another, and there have been cases where the project party has locked users’ funds due to code compatibility issues. Those who participate in the ecology need to pay attention to many considerations such as the background of the project party, but new things represent many new opportunities. If you participate in the ecology, you may discover early high-quality projects.

references

Era?tvl=true