zkSync: An Innovative Solution to Ethereum's Scalability Challenge
Summary:
This article discusses the scalability issue faced by Ethereum and introduces zkSync as a solution. zkSync, built on top of Ethereum, processes transactions off-chain using ZK-proofs, a cryptographic technique. With features like scalability, lower fees, enhanced privacy, and security, it has attracted significant interest in the blockchain community. The article further explains the working principle of zkSync, its distinction from Starknet, potential applications, and how to use the zkSync ecosystem via bridging. Additionally, it addresses the associated bridging risks and suggests ways to mitigate them.
Ethereum, as the leading platform for decentralized applications (DApps), is grappling with a major issue of scalability, a problem that has escalated as the platform gains more users. This uptick has led to a surge in transaction fees, presenting barriers to mainstream adoption. A solution to this scalability issue is said to lie within zkSync, a technology designed to retain Ethereum’s security and decentralized properties while enhancing its scalability.
ZkSync is a scaling solution that utilizes zero knowledge (ZK) rollup technology, which is built on top of the Ethereum blockchain. This technology processes transactions off-chain (also known as layer 2, or L2) by using ZK-proofs, a type of cryptographic technique. It borrows Ethereum's security attributes (layer 1 or L1). Created by Matter Labs, a team of dedicated blockchain engineers and entrepreneurs, zkSync has gained significant traction. The success of this project can be attributed to the technical expertise of the team, and their unwavering commitment to decentralization.
Prominent investors such as Andreessen Horowitz, Sequoia Capital, and Balaji Srinivasan, known for their strategic insight and substantial financial resources, have fuelled the growth of zkSync.
zkSync works by consolidating multiple transactions into one 'batch', significantly reducing transaction costs. The transactions are seamlessly executed on layer 2, resulting in less stress on the main Ethereum network. zkSync compiles cryptographic proofs, or ZK-proofs, that confirm the legitimacy of handled transactions without revealing specific details. These proofs are then submitted back to the Ethereum mainnet for verification.
Its unique advantages include solutions for scalability and heightened privacy while ensuring security and offering lower fees. zkSync also boasts faster transaction processing compared to layer 1s and could handle thousands of transactions per second. It stands out in the landscape of Layer 2 scaling solutions due to its pioneering role in launching a mainnet, and its avoidance of a trusted setup (Application-Specific Trusted Setup or AS-TST), thus eliminating a potential centralization point.
What distinguishes zkSync primarily is its concept called 'Fractal SNARKs’, which efficiently scales with the growing number of transactions. Since its mainnet was launched in November 2020, zkSync has impressively grown, handling millions of transactions proving its real-world applicability. It has accrued over $150 million across 107 native protocols indicating its user base's trust in the platform.
In the space of Layer 2 scaling solutions, zkSync and Starknet offer slightly different benefits. Where zkSync emphasizes general-purpose smart contracts and interoperability with existing Ethereum infrastructure, StarkNet uses zk-STARK proofs to boost scalability but requires a specific smart contract programming language.
Examples of applications built on zkSync includes blockchain-based games that require frequent microtransactions and decentralized finance (DeFi) protocols that benefit from its high-speed, low-cost features. It is a cost-effective platform for minting and trading Nonfungible tokens (NFTs), contributing to the NFT market’s growth.
To use the zkSync ecosystem, assets are moved between Layer 1 (Ethereum mainnet) and Layer 2 (zkSync). However, this bridging process can introduce an extra layer of complexity and risks. Despite the risks, getting to grips with bridging through a step-by-step guide could minimize potential issues and understanding how to bridge to zkSync using official bridges could help smooth the process.
Wallets that support zkSync include MetaMask, Argent, and the official zkSync portal's in-built wallet. As of May 2024, neither Coinbase Wallet nor Trust Wallet offers native support for zkSync.
While blockchain bridges offer a way to move assets, they come with risks, including susceptibility to hacks or exploits, reliance on centralized custodians, fluctuating asset prices, and liquidity pool risks. Notable recent bridge hacks have resulted in losses of hundreds of millions of dollars worth of crypto assets.
To mitigate these risks, users must choose well-established bridges with strong security records, understand the functionality of their chosen bridge, understand the risks of using liquidity pools, and avoid moving more assets than they need to use immediately on new protocols.
By following this advice, users can make well-informed decisions when bridging assets and participate in the zkSync ecosystem more confidently.
Published At
5/15/2024 5:21:12 PM
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