WEB3
by Guest Writer: Footprint Analytics
September 14, 2023
In this guest article from Footprint Analytics, we take an in-depth look at zkSync Era, a formidable contender in the Ethereum layer-2 space. Discover the essence of zkSync Era and explore its remarkable offerings.
Thank you to Footprint Analytics, for submitting this guest article.
When it comes to scaling Ethereum, layer 2 solutions have garnered significant attention. These solutions aim to overcome the limitations of layer 1 blockchains by introducing techniques such as rollups, state channels, and nested blockchains. Within the realm of layer 2 scaling, there has been considerable debate surrounding the merits of optimistic rollups versus zero-knowledge rollups (ZK-rollups).
During ETH Seoul 2022, Vitalik Buterin, the co-founder of Ethereum, expressed his belief that ZK-rollups would emerge victorious in the layer 2 scaling competition. Fast forward to 2023, zkSync Era has become one of the key newsmakers in the ZK-rollups space.
zkSync Era is an advanced layer-2 protocol that utilizes cutting-edge zero-knowledge cryptography to scale Ethereum's security and values. Building upon the success of zkSync 1.0 (now zkSync Lite), zkSync introduces zkSync Era as its zkSync 2.0.
Notably, zkSync Era is the world's first zkEVM blockchain, allowing applications written for the “native” Ethereum Virtual Machine (EVM) to seamlessly run on this ZK-based layer-2 network. This groundbreaking feature, “EVM equivalence”, ensures compatibility with existing Ethereum infrastructure while leveraging the benefits of zero-knowledge technology.
Matter Labs is the team behind zkSync Era. Founded by seasoned software architects, Matter Labs is backed by some of the biggest names in Venture Capital and Web3 such as a16z, Blockchain Capital, and Union Square Ventures.
For the purposes of this article, the term "zkSync" refers to zkSync Era.
zkSync opened on mainnet to all users on March 24, 2023, the first in a huge wave of zkEVM-related launches. It recorded over one million transactions within the first four days of launch according to its official Twitter page. The total value locked (TVL) in zkSync surpassed 100 million dollars on April 3, only 10 days after the mainnet launch. The TVL has witnessed a substantial increase since then and peaked at 736 million dollars on July 5.
In addition, zkSync has established itself as the dominant rollup solution in terms of user activities, boasting an impressive total of 28.58 million transactions over the past month (as of September 4, 2023). This figure is more than twice as high as the transaction count of the second-place rollup solution, Starknet.
So, why the hype?
According to Footprint Analytics, zkSync has experienced notable growth in terms of daily active users (DAU). On May 10, approximately 47 days after launch, zkSync reached 153.45K DAU, marking the first time the platform has surpassed 100,000 DAU. After a few months of operation, zkSync reached its highest recorded number of DAU at 363.81K on August 26, 2023. The upward trend indicates a substantial increase in user adoption and interest.
Since its launch on March 24, zkSync has experienced a consistent upward trajectory in daily transactions. Starting at around 300,000 transactions per day in the initial month, the platform has seen steady growth, reaching approximately 900,000 transactions per day by August. Concurrently, zkSync has also witnessed a decline in average transaction fees. Initially set at 0.00025 ETH, the average transaction fee has decreased to 0.00012 ETH. These trends indicate an increasing user demand for zkSync's services, coupled with improved cost-efficiency for users as transaction fees have become more affordable over time.
zkSync has demonstrated significant improvements in its TPS (transactions per second) over time. Initially below 4 TPS from March to May, zkSync's TPS steadily increased, reaching a range of 9 to 11 by August. In comparison, Ethereum maintained a relatively stable TPS range of 12 to 14 throughout this period. These advancements suggest that zkSync is on track to surpass Ethereum's TPS in the near future, making it a promising scalability solution for the blockchain ecosystem.
Through its innovative utilization of ZK-rollups, zkSync presents an enticing opportunity for Ethereum-based projects aiming to enhance scalability and efficiency. Since its launch in March, the zkSync ecosystem has seen significant growth, with a total of 87 projects going live on the platform as of August 31, 2023, including:
Despite the ecosystem's growth, there are some areas that warrant attention. On one hand, the various segments within the zkSync ecosystem have struggled to attract top-tier project endorsements, which are crucial for building trust and accumulating TVL based on brand reputation. Without established projects backing the ecosystem, it becomes challenging to generate widespread confidence and participation.
On the other hand, the zkSync ecosystem comprises several projects that are still in their early stages and may lack comprehensive information disclosure or a clear focus on professional development. Some projects within the ecosystem appear to prioritize short-term hype over building a solid foundation. In a bear market, low-quality projects with limited Annual Percentage Yield (APY) returns may face challenges in retaining user funds, which can have an impact on the overall growth of the ecosystem.
The hype around zkSync has significantly decreased since it peaked at the TVL in July. Apart from the two factors mentioned above, lack of ecosystem development and low average quality of existing native projects, we can find more key factors that have contributed to this trend:
zkSync introduced a new network called "Hyperchains" in June, which is set to go live on the testnet by the end of 2023. Hyperchains are fractal-like instances of zkEVM running in parallel and with the common settlement in layer 1. This innovative concept is seen as a potential response to Optimism's Superchain concept. By leveraging Hyperchains, zkSync aims to establish a secure and scalable ecosystem, enabling broader accessibility to Ethereum.
In conclusion, zkSync Era has established itself as a leading scalability solution within the Ethereum ecosystem. Regarding the possibility of launching its native token, “there are no plans to launch a token for now,” said Matter Labs CEO Alex Gluchowski in March 2023, "A token only comes into play with decentralizing the network, and that is still far on the horizon." The path ahead holds exciting possibilities, and the community eagerly awaits the next steps in zkSync Era's journey towards further advancements and the realization of its vision.
Footprint Analytics is a blockchain data solutions provider. It leverages cutting-edge AI technology to help analysts, builders, and investors turn blockchain data and combine Web2 data into insights with accessible visualization tools and a powerful multi-chain API across 20+ chains for NFTs, GameFi, and DeFi.
Footprint Website: https://www.footprint.network
Discord: https://discord.gg/3HYaR6USM7
Twitter: https://twitter.com/Footprint_Data
Disclaimer
Press Release Disclaimer: The content in the above article is a press release, provided by a third party. Readers should do their own research before interacting or engaging with the mentioned companies and/or any related services. BSCN is neither directly nor indirectly responsible for any damage or loss caused or alleged to be caused by or in connection with the use of any content, goods or services mentioned in the above article.
Author
Guest Writer: Footprint Analytics
Footprint Analytics is a blockchain data solutions provider. It leverages cutting-edge AI technology to help analysts, builders, and investors turn blockchain data and combine Web2 data into insights with accessible visualization tools and a powerful multi-chain API across 20+ chains for NFTs, GameFi, and DeFi.
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