Ever since the launch of the Ethereum (ETH) blockchain network, many people and developers have begun leveraging its capabilities.
Its introduction of smart contracts and the gas fee model of making transactions essentially revolutionized the crypto space and gave birth to numerous disruptive technologies, specifically in the field of decentralized applications (dApps) and non-fungible tokens (NFTs), all of which pave the way for broader adoption of decentralized finance (DeFi).
However, Ethereum lacks in some departments. For one, the network is slow in terms of transaction throughput, and it can get extremely expensive to use, especially in cases where it is too congested.
As such, numerous solutions were created to scale Ethereum, or in other words, improve it. Ethereum is a Layer-1 network, while these scaling solutions are Layer-2 and work on top of the underlying blockchain. Today, we will be jumping into one such model, specifically, zkSync.
Let's go through everything you need to know surrounding it, from the project's origins to its future development.
What is zkSync?
zkSync is defined as a Layer-2 scaling solution aimed at providing Ethereum with cheaper as well as quicker transactions. Layer-2 solutions are purpose-built to move the most activity away from Layer-2 while still utilizing its security and finality.
zkSync utilizes zero-knowledge proofs and on-chain data availability as a means of keeping the funds of users as safe as possible.
There are numerous features that zkSync has, including mainnet-level security with no reliance on third parties. Alongside this, it provides ETH and ERC-20 token transfers with instant confirmations and a 10-minute finality on Layer-1.
There are ultra-low transaction fees, which are 1/100th of the mainnet cost for an ERC-20 token, and 1/30th the cost for ETH transfers.
Additionally, no registration is required to receive funds, and payments to existing Ethereum addresses are possible, alongside smart contract support. The fees can be paid in the form of the token that is being transferred, and the withdrawals to the mainnet take 10 minutes. There's support for Multisig as well.
zkSync aims to provide over 2000 transactions per second (TPS) when compared to the 10 to 15 TPS available on Ethereum Layer-2 as well. Bitcoin (BTC) also shares a similar issue.
How Does zkSync Work?
To truly understand how zkSync works, we need to look at rollups first.
Rollups work through the process of building or rolling up any off-chain transactions within a smaller transaction, which gets sent to Layer-1. Through the process of sending the transactions back to Layer-1, rollups get the security as well as the finality of Ethereum.
There are two types of rollups, including Zero Knowledge (ZK) and Optimistic.
Each batch of transactions is sent to an off-chain provider, which can generate cryptographic proof. In the case of zkSync, this is known as a SNARK, and it ensures that the transactions are valid.
Generating this proof is difficult; however, verifying that the proof is valid is easy. This means that it can be sent to Layer-1 and verified within a smart contract that allows for frictionless transfers between L1 and L2.
Ultimately, a zkRollup processes the transaction data off the root chain and produces cryptographic proofs, which can enable users to prove that it has specific data without revealing the details of the data.
zkSync as a solution was originally created by Matte Labs, which has gained funding from the Ethereum Foundation and top investors, including Union Square ventures, and the network has been live since September 2020.
The Future of zkSync: zkSync 2.0 and Its Features
zkSync 2.0 is one of the most highly anticipated mainnet launches in the sphere of zkSync, and its primary objective is to accelerate the scaling and security surrounding Ethereum.
The 2.0 mainnet is currently expected to get deployed on October 28.
Blockchains are facing issues surrounding the blockchain trilemma, where they aim to have security, scalability, and decentralization without sacrificing any one of them.
Ethereum is secure and decentralized. However, it lacks scalability.
The zkEVM engine aims to power the zkRollup and is capable of processing 100,000 transactions per second (TPS) when running in conjunction with Ethereum sharding, expected to be rolled out in 2023.
zkSync 2.0 features a combination of 2 technological breakthroughs, including zkEVM, which is the engine powering the Ethereum Virtual Machine (EVM) compatible zkRollup, and zkPorter, which is an off-chain data availability system that features two orders of magnitude more scalability when compared to rollups.
Furthermore, zkSync 2.0 aims to be shipped with an on-and-off-ramping product known as "Ramp," which will cover more than 150 countries and offer numerous payment methods, such as credit and debit cards, bank transfers, and Apple Pay.
Furthermore, in zkSync 2.0, there is a different concept surrounding gas, where the transaction process can fluctuate depending on the current L1 gas price and the cost of ZK Generation. Smart contract calls are expected to feature a maximum number of zkEVM steps and storage write parameters.
Other changes will include storage efficiency boost and precompiles.
Moving forward with zkSync 2.0
Ultimately, zkSync 2.0 is a representation of the next evolution surrounding Layer-2 solutions.
Matter Labs, which is the company behind the development of zkSync, will also get closer to solving the blockchain trilemma with the 2.0 mainnet launch.
If you were looking for the perfect time to invest in a cryptocurrency such as Ethereum, for example, this might be an indication of what's to come in the future. If you want to get into Ethereum investing before zkSync 2.0 launches, you can utilize ZenDCA to automate this process, which will carry on making orders even after the launch through repeat buy schedules, automatic withdrawals, and performance tracking.
zkSync is currently one of the largest Layer- 2 ecosystems out there, and it will likely grow even further with this development.