In the rapidly evolving world of blockchain technology, zkSync has emerged as a groundbreaking solution for enhancing scalability, reducing transaction fees, and enabling faster transactions on the Ethereum network. With its innovative use of zkRollup technology, zkSync has paved the way for a new generation of Layer-2 scaling solutions.
In this article, we will explore the top 5 early projects on zkSync, delving into their unique features, contributions, and the impact they have made on the blockchain ecosystem.
What is zkSync and how does it work?
zkSync is a Layer-2 scaling solution engineered by Matter Labs that leverages a technology known as zkRollup. Its primary mission is to ensure Ethereum’s scalability without making compromises on its decentralization and security. To appreciate the genius behind zkSync, it’s crucial to understand the problem it resolves.
Ethereum, despite being the leading platform for smart contracts, suffers from the well-known limitations of scalability and high transaction fees (known as gas fees). This is where zkSync enters the picture, acting as a scalability solution that enables Ethereum to increase its transaction capacity without sacrificing security and decentralization.
At the heart of zkSync lies the principle of zkRollup. The “zk” stands for “zero-knowledge,” a reference to zero-knowledge proofs, a cryptographic method where one can prove possession of certain information without revealing that information. In this context, it allows for the validation of transactions off-chain without revealing the specifics of these transactions.
The term “Rollup” refers to the process of rolling multiple transactions into a single transaction, significantly reducing the amount of data stored on-chain. zkRollup aggregates multiple operations into one single proof on the Ethereum network, and the Ethereum network itself verifies this proof. This aggregation considerably minimizes the load on the Ethereum network, enabling it to process transactions more swiftly and cost-effectively.
The Significance of zkSync
The significance of zkSync lies in its potential to transform the way transactions occur on the Ethereum network. Here are some of the reasons why zkSync is so significant:
Scalability: By leveraging the power of zkRollup, zkSync can process thousands of transactions per second, thereby offering a viable solution to Ethereum’s scalability issue.
Security: Since all transactions in zkSync are settled on the Ethereum network and inherit its security properties, it offers a level of security that is unmatched by many other Layer-2 solutions.
Low Transaction Fees: zkSync drastically reduces the transaction fees on the Ethereum network. This makes it not only economically viable but also accessible to a larger user base.
Usability and Interoperability: zkSync supports the Ethereum Virtual Machine (EVM), which means that it can easily support complex smart contracts and interact seamlessly with existing Ethereum tooling.
Top 5 Early Projects On zkSync
Synthr is a platform where users can create and trade derivative assets that are based on different financial assets using secure financial contracts. Synthr uses advanced methods to manage collateral, reduce risk, maintain price stability, and allow compatibility with other blockchain networks.
To start with, users need to deposit easily convertible assets such as ETH, USDC, and USDT as collateral. By depositing collateral, users can create synthetic tokens (syAssets) based on their collateral at an average Collateralization Ratio of 150%. Synthetic assets will be issued based on loans that have more collateral than necessary to ensure the stability and financial security of the SYNTHR system.
The key features of Synthr include:
Synthetic Asset Protocol: Synthr offers a synthetic asset protocol that allows users to mint and trade on-chain derivatives of various financial assets using trustless financial contracts.
Collateral Management: The protocol incorporates novel systems for collateral management, ensuring the robustness and solvency of the SYNTHR ecosystem. Users can deposit highly liquid assets such as ETH, USDC, and USDT as collateral to mint synthetic tokens.
Risk Mitigation: Synthr utilizes overcollateralized loans to issue synthetic assets, mitigating risks and ensuring the stability of the ecosystem.
Cross-chain Interoperability: Synthr aims to achieve cross-chain interoperability, allowing users to access and trade synthetic derivatives across multiple blockchain networks.
Composability: The protocol is designed with composability in mind, enabling seamless integration with other decentralized finance (DeFi) projects and expanding the possibilities for users.
Slippage-free Omnichain Liquidity: Synthr provides users with slippage-free, omnichain liquidity, ensuring a smooth trading experience and liquidity availability across different blockchain networks.
The tokenomics of Synthr are designed to support the long-term success of the platform. Synthr provides users with access to liquidity that is free from market slippage and works on multiple chains.
Deri Protocol is a platform for decentralized derivatives trading on the blockchain. It uses an automated market maker system for executing trades and creates non-fungible tokens (NFTs) to represent positions, which can easily interact with other DeFi projects.
Key features of the Deri Protocol
- External Custody
- Dynamic mixed margin
- Dynamic liquidity providing
- Multiple trading symbols in one pool
Deri Protocol has gone through two major version updates since its launch. The protocol has supported three major derivative types, namely Perpetual futures, Everlasting Options, and Power Perpetuals. It has been deployed on various blockchain networks to cater to the demands of traders for hedging and speculating. Additionally, Deri Protocol has processed a total trading volume exceeding 20 billion USD.
Cielo Finance is a protocol that gives users access to analytics on zkSync Era. With Cielo, users can discover information about trading patterns, including who is trading, how they are trading, where they are trading, and why they are trading.
Key features of Cielo Finance
- Real-time feed for transactions
- Create 5 themed lists
- Track up to 200+ wallets
- Sophisticated protocol labeling and tx type
- Track 5 tokens
- Cielo tracker bot for Telegram alerts
- Integrated NFT dashboard
Users can add wallet addresses and ENS for top traders, NFT collectors, influencers, team treasuries, whales, hedge funds, hackers, and heroes. Transactions are categorized by swap size, bet size (sportsbooks), profit and loss (futures + NFT flips), and direction (long or short).
Viva Leverage is a protocol for yield farming that uses leverage to increase potential earnings. Users can borrow assets from the lending pool to open a leveraged yield farming position and earn higher yields. The borrowed assets must be returned when the user withdraws their own assets.
When lenders deposit their tokens into a lending pool, they receive ibTokens in return. These tokens represent the lenders’ ownership of the assets they have lent, and any earned interest is reflected in the tokens. Lenders can earn extra rewards by staking their ibTokens.
Key Features of Viva Leverage Project:
Leveraged Yield Farming: Viva Leverage offers a leveraged yield farming protocol that enables users to open leveraged positions and earn multiple yields by borrowing assets from the lending pool.
Lending Pool and ibTokens: Lenders deposit their tokens into the lending pool and receive ibTokens, which are interest-bearing tokens representing their ownership of the lent assets. The interest earned is accumulated and reflected in these ibTokens.
Additional Rewards: Lenders can earn additional rewards by staking their ibTokens, enhancing the overall return on their lending activities.
Integration with Decentralized Exchanges (DEX): Viva Leverage plans to integrate various decentralized exchange capabilities, allowing users to generate returns through trading on a single, seamless platform.
Automatic Reinvestment: The Viva Leverage contract automatically reinvests the total assets collected in the farming pool at each epoch, enabling users to benefit from compound interest profits.
Viva Leverage intends to merge decentralized exchange (DEX) features into a unified platform enabling users to earn returns through trading. The Viva Leverage contract automatically reinvests the cumulative assets gathered in the farming pool, generating compound interest profit for users every epoch.
Farmers should take heed of the liquidation hazard- if the farming position’s debt ratio exceeds a certain threshold, it may be liquidated to evade the lenders from incurring losses. The liquidation procedure serves to safeguard the lenders’ profits.
Symbiosis is a protocol that collects liquidity from various blockchains, even those that do not use EVM technology. It enables users to conveniently trade any token and transfer their assets across different blockchains. By participating in protocol activities like liquidity provision, users receive incentives in the form of SIS tokens. SIS tokens are issued on Ethereum and Abitrum, and token holders can move them from Ethereum to the BNB chain using the Symbiosis protocol.
Cross-Chain Engine: Symbiosis operates as a cross-chain engine and liquidity protocol, allowing for the pooling together of liquidity from various blockchains, regardless of whether they use EVM technology or not.
Seamless Token Trading: With Symbiosis, users can effortlessly trade any token and transfer their assets across different blockchains, providing a seamless experience for token transactions and asset transfers.
Incentivization with SIS Tokens: The protocol incentivizes users to participate in its activities, such as providing liquidity, through the use of SIS tokens. Users can earn rewards for their engagement and contribution to the protocol.
Pooled Liquidity: Symbiosis stands out with its ability to pool liquidity from different blockchains, enabling users to access a consolidated liquidity pool for improved trading opportunities and market efficiency.
Symbiosis stands out for its cross-chain engine and innovative liquidity protocol. This protocol allows users to easily trade any token and transfer their assets across multiple blockchains, an important feature of the decentralized ecosystem. Additionally, Symbiosis rewards users with SIS tokens for participating in the protocol’s activities such as liquidity provision. This makes it an appealing option for those who want to earn rewards for their involvement.
The early projects on zkSync have showcased the immense potential of this Layer-2 scaling solution. From Synthr’s synthetic asset protocol to Viva Leverage’s leveraged yield farming and Symbiosis’s cross-chain engine, these projects have demonstrated the power of zkSync in enhancing scalability, reducing fees, and expanding the possibilities of blockchain technology.
As zkSync continues to evolve, it holds promise for driving the future growth and adoption of Ethereum, offering a more efficient and seamless experience for users across the decentralized ecosystem.