What Is ZKsync (ZK): Ethereum’s ZK-Rollup Scaling Solution?

ZKsync is a Layer 2 scaling solution for Ethereum. It improves the network’s scalability and reduces transaction costs while maintaining security. By using zero-knowledge rollups (zk-rollups), ZKsync bundles transactions off-chain and then records them on-chain, ensuring faster and cheaper transactions without compromising security.

ZKsync TVL | Source: L2Beat 

At the time of writing, ZKsync is the seventh-largest Ethereum layer-2 network and the second-largest ZK-rollup for Ethereum in terms of total value locked (TVL). Having handled over 400 million transactions across over seven million addresses, the ZKsync network has a TVL of over $760 million. In mid-June, ZKsync announced an airdrop campaign to launch its native token, ZK. In less than a week since the announcement, 45% of the airdrop tokens have already been claimed. The ZK token has a market cap of over $743 million and hit an all-time high of $0.321 on June 17, 2024. 

KuCoin has onboarded ZKsync to its platform in June 2024 via our pre-market trading platform. 

ZKsync is a protocol that enhances Ethereum’s performance by utilizing zero-knowledge rollups (zk-rollups). These rollups batch multiple transactions into one, reducing the load on the main Ethereum chain and lowering transaction fees.

The core of zk-rollups lies in zero-knowledge proofs (ZKPs). ZKPs allow a prover to convince a verifier that a statement is true without revealing any details about the statement itself. In ZKsync, transactions can be validated without exposing transaction data, ensuring both privacy and security.

Zero-knowledge proofs work by having the prover demonstrate knowledge of specific information (the witness) through a series of mathematical proofs. The verifier checks these proofs without needing to see the actual data, thus maintaining confidentiality while ensuring the transaction’s validity.

ZKsync combines on-chain and off-chain components to improve Ethereum's scalability and reduce transaction costs. The on-chain component includes smart contracts that manage essential functions like storing rollup blocks, tracking deposits, and verifying proofs. These contracts ensure the integrity and security of the transactions by recording the necessary data on the Ethereum blockchain.

The off-chain component consists of virtual machines that execute transactions outside the Ethereum mainnet. These off-chain processes handle the bulk of transaction computation, which reduces the load on the main Ethereum network. This system allows transactions to be processed quickly and efficiently before being rolled up into a single batch and submitted back to the on-chain contract for final verification and storage. 

How ZKsync layer-2 works | Source: ZKsync 

Transaction Processing

Transaction processing in ZKsync involves several steps to ensure efficiency and security. Here’s how it works:

1. Batching Transactions: Multiple transactions are grouped together into a single batch off-chain. This reduces the number of transactions that need to be processed individually on the Ethereum mainnet, lowering both time and cost.

2. Generating Proofs: For each batch, a zero-knowledge proof (zk-proof) is generated. This proof confirms the validity of all transactions in the batch without revealing any transaction details. The zk-proof is succinct and can be quickly verified by the on-chain smart contract.

3. On-chain Verification: The zk-proof is submitted to the Ethereum mainnet where the on-chain smart contract verifies its validity. If the proof is valid, the batch of transactions is considered confirmed and recorded on the blockchain. This ensures that all transactions are processed securely and efficiently without overloading the main Ethereum network. 

By using this method, ZKsync can significantly enhance transaction throughput, reduce costs, and maintain high levels of security and privacy. This system is particularly beneficial for applications that require frequent and low-cost transactions, such as decentralized finance (DeFi) platforms and other blockchain-based services.

Here are some of the advantages of using the ZKsync network: 

1. Increased Throughput: ZKsync significantly enhances transaction throughput by processing transactions off-chain and then bundling them into a single proof submitted to the Ethereum mainnet. This method can handle up to 100,000 transactions per second, making it highly scalable.

2. Reduced Transaction Fees: By offloading most transaction processing to Layer 2, ZKsync reduces the congestion on the Ethereum network, leading to lower gas fees. Users benefit from cheaper transactions while maintaining the same level of security as the main Ethereum chain.

3. High Security: ZKsync uses zero-knowledge proofs (zk-SNARKs) to ensure that transactions are valid without revealing any details. This cryptographic method provides robust security, ensuring that users' data and transactions are safe from tampering. 

4. EVM Compatibility: ZKsync is compatible with the Ethereum Virtual Machine (EVM), making it easy for developers to port their existing Ethereum dApps to ZKsync without significant modifications. This compatibility simplifies the development process and encourages more projects to utilize the ZKsync network.

5. User Experience Improvements: Features like gasless meta-transactions allow users to pay transaction fees with any token they are transferring, rather than needing ETH specifically. This user-friendly approach makes transactions more convenient and accessible. 

ZKsync announced a ZK airdrop in June 2024, one of the largest airdrop campaigns among Ethereum layer-2 networks. To qualify for the ZKsync airdrop, you need to have been an active user of the ZKsync ecosystem. 

How to Be Eligible for ZKsync Airdrop

The eligibility criteria include using dApps, adding liquidity, swapping tokens, and participating in community activities. A snapshot taken on March 24th, 2024, determined the eligible wallets. A total of 695,232 wallets have been deemed eligible based on their interaction with the ZKsync mainnet and various applications within its ecosystem. 

The distribution is split with 89% allocated to active users and 11% to ecosystem contributors who have supported the network through development, advocacy, or education​. 

ZK token distribution, ZKsync tokenomics | Source: ZKsync

How to Participate in ZKsync (ZK) Airdrop 

1. Check Eligibility: Visit the ZKsync airdrop claim checker page at ZKsync Claim.

2. Connect Wallet: Connect your wallet or submit your GitHub username to verify eligibility. As an EVM-compatible blockchain, you can use Ethereum wallets like MetaMask.

3. View Allocation: If eligible, you will see the number of ZK tokens allocated to your wallet. Each eligible wallet can receive between 450 and 100,000 ZK tokens, depending on their level of participation and contribution. 

4. Claim Tokens: Follow the on-screen instructions to claim your tokens. There are no vesting or lock-up periods, so the tokens will be available for immediate use.

When to Claim ZK Airdrop: The airdrop tokens can be claimed starting from June 16, 2024 until January 3, 2025. 

How to Make the Most of ZKsync Airdrops 

By following these steps and staying active in the ZKsync ecosystem, you can maximize your benefits from the current and potential future airdrops.

• Participate in Governance: Delegate your ZK tokens to a governance delegate to influence the future of the ZKsync ecosystem. This can also potentially qualify you for further airdrops.

• Stay Active: Continue to engage with the ZKsync network by transacting, adding liquidity, and using top dApps to enhance your chances of being eligible for future airdrops.

• Monitor Updates: Follow ZKsync and ZK Nation on social media to stay updated on any new announcements or tasks that could increase your eligibility for future rewards.

Bridging assets to ZKsync allows you to enjoy faster, cheaper transactions while maintaining the security of the Ethereum network. Here’s a step-by-step guide to help you bridge your assets to ZKsync using various methods.

Using the ZKsync Portal Bridge

1. Visit the Portal: Go to the ZKsync bridge portal.

2. Connect Your Wallet: Click on "Connect Wallet" and choose your preferred wallet, such as MetaMask.

3. Select Assets: Choose the asset you wish to bridge and enter the amount.

4. Confirm Details: Review the transaction details and confirm.

5. Approve Transaction: Approve the transaction in your wallet to complete the bridging process. 

Here’s how you can add ZKsync network to MetaMask wallet. 

Tips for Successful Bridging

By following these steps, you can efficiently bridge your assets to zkSync and enjoy its scalable and cost-effective solutions for your transactions.

• Choose a Reliable Platform: Use trusted and well-reviewed platforms, e.g., the ZKsync bridge, to avoid security risks.

• Verify Compatibility: Ensure the token you wish to bridge is supported by zkSync.

• Understand Fees: Be aware of gas fees associated with the bridging process.

• Double-Check Addresses: Ensure you enter the correct token addresses to avoid losing assets.

• Monitor Transactions: Keep track of transaction confirmations to ensure successful transfers. 

ZKsync vs. Optimistic Rollups: A Quick Comparison 

ZKsync (ZK-Rollups) and Optimistic Rollups are two prominent Layer 2 scaling solutions for Ethereum, each with distinct approaches and benefits. ZKsync leverages zero-knowledge proofs to validate transactions off-chain, which are then bundled and submitted to the Ethereum mainnet with a validity proof. This method ensures high security and fast transaction finality since the validity of transactions is confirmed before they are recorded on the main chain. Consequently, withdrawals can be processed within a few hours, providing a swift and secure transaction experience. However, the complex cryptographic computations involved in generating these proofs make ZKsync more expensive and technologically demanding to implement, often requiring specific hardware and advanced expertise.

In contrast, Optimistic Rollups assume transactions are valid by default and rely on a fraud-proof mechanism during a challenge period to ensure correctness. This approach allows for quicker initial transaction processing but introduces a delay in transaction finality due to the challenge period, which can last up to a week. Optimistic Rollups are easier to implement and integrate with existing Ethereum smart contracts, making them more accessible for developers. However, they are more vulnerable to censorship attacks and rely heavily on active network participants to monitor and challenge fraudulent transactions. The choice between these two rollup technologies depends on the specific needs of a project, balancing the trade-offs between security, speed, complexity, and cost. 

ZKsync vs. Other ZK Rollups 

ZKsync and other ZK rollups like StarkNet, Polygon zkEVM, and Scroll offer advanced Layer 2 scaling solutions for Ethereum, but they differ in their approaches and technical specifics. ZKsync, developed by Matter Labs, uses ZK-SNARKs (Succinct Non-Interactive Arguments of Knowledge) to batch transactions off-chain and verify them on-chain with cryptographic proofs. This ensures high security and fast transaction finality. ZKsync is notable for its EVM compatibility, simplifying the migration of existing Ethereum smart contracts to its platform, and making it a user-friendly option for developers. Additionally, zkSync supports a wide range of applications, from payments to complex DeFi protocols, providing a versatile environment for various use cases. 

StarkNet, on the other hand, employs ZK-STARKs (Scalable Transparent ARguments of Knowledge) which do not require a trusted setup and are quantum-resistant, offering potentially greater scalability and security. However, StarkNet requires developers to use its native language, Cairo, which can be a barrier compared to zkSync's EVM compatibility. StarkNet excels in high throughput, capable of handling millions of transactions per second, making it suitable for applications demanding massive scalability. Both solutions aim to reduce transaction costs and improve efficiency; however, their technical differences mean the choice between them will depend on specific project requirements, such as the need for EVM compatibility and the desired level of scalability and security. 

By understanding these challenges, you can better appreciate the potential hurdles of using ZKsync in the Ethereum ecosystem: 

1. Complexity: Implementing and maintaining zk-rollups is technically challenging. The advanced cryptographic techniques used require significant computational resources and expertise, which can be a barrier for some developers.

2. Liquidity Fragmentation: As assets move to Layer 2 solutions like ZKsync, liquidity can become fragmented across different platforms. This fragmentation can reduce overall liquidity, potentially impacting trading efficiency and price stability in both Layer 1 and Layer 2 networks.

3. Early Development Stage: ZKsync, like many other Layer 2 solutions, is still in its early stages of development. This stage means it may face unforeseen technical and operational challenges as it scales and evolves.

4. EVM Compatibility Limitations: While ZKsync is compatible with the EVM, it requires an intermediate compilation step using LLVM, which can introduce complexity and potential compatibility issues compared to fully EVM-equivalent solutions.

ZKsync is a powerful Layer 2 scaling solution for Ethereum, utilizing zero-knowledge rollups (zk-rollups) to enhance scalability and reduce transaction costs. By processing transactions off-chain and batching them into a single proof, ZKsync ensures faster and cheaper transactions while maintaining high security. It has seen adoption in various projects like Mute.io, SpaceFi, and EraLend, showcasing its effectiveness in DeFi and beyond.

Looking ahead, ZKsync holds significant potential for the blockchain industry. As Ethereum continues to evolve, especially with the Ethereum 2.0 upgrades, ZKsync will play a crucial role in managing increased transaction volumes and maintaining network efficiency. The synergy between Ethereum 2.0’s sharding and ZKsync’s rollups will enable greater scalability and lower costs, benefiting both developers and users. This synergy will boost Ethereum's scalability and efficiency, making ZKsync an essential component in the future of blockchain technology.

• What Is LayerZero (ZRO) Cross-Chain Interoperability Protocol?

• Top Crypto Projects in the Blast Layer-2 Network

• Top Crypto Projects in the Base Network Ecosystem

• Top 10 Layer-2 Crypto Projects to Watch in 2024

• Top Zero-Knowledge (ZK) Proof Crypto Projects of 2024

• Top Liquid Restaking Protocols of 2024

• Top dApps and Crypto Projects in the Optimism Ecosystem

• Top Crypto Projects in the Arbitrum Ecosystem