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The Zero-Knowledge Landscape: Part 2
an update on developments across the zero-knowledge scaling ecosystem
as always, thanks for reading and you can follow me here
On March 15th, I previously wrote the original Zero Knowledge Landscape outlining the various teams competing to develop solutions to scale Ethereum through zero-knowledge rollups. Since then, a lot has changed throughout the crypto ecosystem. BTC and ETH were 37.8k and 2.5k respectively, LUNA was $87 and Do Kwon wasn’t an international fugitive, while Zhu and Kyle were tweeting about dynastic wealth.
Unfortunately, what hasn’t changed is ETH transaction costs, but there are solutions to scaling that are close to deployment. With the success of the long awaited merge behind us, most ETH developers, teams, and resources are hyper-focused on ETH’s rollup-centric roadmap while ETH holders take solace of high gas fees through a mostly static or deflationary supply of ETH (visualized on ultrasound.money).
At the center of ETH’s future is this rollup-centric roadmap comprised of Optimistic (Optimism & Arbitrum) and Zero-Knowledge Rollups. Optimistic rollups are currently live on mainnet and have seen decent traction so far, something that should be further aided by Arbitrum’s eventual resumption of Odyssey and token airdrop.
ZKRs have yet to make a substantial impact, but have been in constant development and iteration for years now as they use extremely complex math, cryptography, and intensive computation to produce validity proofs to verify that transactions are valid before bundling them and settling them on ETH’s base layer.
One specific type of ZKRs, zkEVMs are currently considered the “holy grail” of ZK scaling as they refer to zero-knowledge proofs that are executed within an Ethereum Virtual Machine equivalent that enables compatibility with already existing ETH smart contracts, developer tooling, and the already established broad ETH ecosystem.
The excitement around ZKRs continues to build as we’re now a week away from zkSync deploying their long-awaited zkEVM scaling solution to mainnet (with extremely limited initial use). Outside of zkSync’s deployment, there’s been a flurry of developments in recent weeks across the ZKR sector highlighted by:
zkSync’s zkEVM rollup to go live on mainnet next week, October 28th
Polygon releasing their zkEVM product to public testnet with ETA for mainnet launch being Q1 2023
Matter Labs, zkSync L2 creators, to launch Pathfinder L3 testnet in Q1 2023
Uniswap’s v3 of the protocol will be live on zkSync after it’s October 28th launch
Aztec Connect launched live on mainnet July 7th
Scroll announces upgrades to their zkEVM pre-alpha testnet
IMX launches $500M developer and venture fund for NFT and gamefi builders
Consensys R&D releases their updated specification for a Type 2 zkEVM
Contributing to the excitement of ZKRs long-awaited release is also, of course, new tokens. zkSync, StarkNet, and Aleo have confirmed tokens are coming, with expected eventual tokens from Espresso, Scroll, and Aztec. These tokens value and “utility” will align with other scaling solutions and appchains approach that is through use for governance (decentralization), staking (security & validation), and transaction fees. Below you’ll find updates, timelines, ecosystems, airdrop strategies, and more for the largest players across the ZKR ecosystem!
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Protocols & Timelines
developed by Matter Labs & is a ZKR with zkEVM compatibility
This week, on Oct. 17th, the zkSync team announced the successful completion of Milestone 3: Proof Merging, a critical step before mainnet deployment. In the accompanying blog post, the importance was highlighted by, “with the integration of validity proofs, zkSync 2.0 is now officially a fully working end-to-end zkEVM running on a public testnet” & zkSync’s current timeline is:
October 28th — zkSync 2.0 goes live on mainnet in limited capacity with no external projects or users as they monitor, audit, and complete security checks
Q4 2022 — fair launch alpha — scaling solution is open to developers & protocols, remains closed to external users
EOY 2022 — open access to the bridge for external users
token: confirmed with details & tokenomics coming the first week of November — airdrop strategies here
StarkWare — builders of StarkNet & StarkEx scaling solutions
StarkWare raises $100M and quadruples valuation to $8B, announced May 25th
StarkNet is a ZKR L2 using ZK-STARKs that is currently live on mainnet
outlined StarkNet Regenesis that will follow the release of Cairo 1.0 and enhance the security and simplicity of their custom built programming language
deployed first version of StarkNet Bridge, StarkGate Alpha, to mainnet May 9th
standalone ZKR SaaS & scalability engine powered by their Cairo ZKP programming language that’s been live on ETH mainnet since 2020
according to StarkEx, the ZKR has $463M in TVL, has processed 247M transactions, done $726B in cumulative trading volume, & minted 69M NFTs
while StarkEx is currently permissioned, StarkEx deployments will eventually be portable to StarkNet offering full decentralization and composability
Currently there are three separate ZK-rollup scaling initiatives developing
Polygon Miden — “a STARK-based, zk-Rollup with support for arbitrary smart contracts” — currently in development
Polygon Zero — “offers rollup and validium modes, giving users access to higher throughput and lower fees” — in development
Polygon Hermez — “an open-source zk-Rollup optimized for secure, low-cost and usable token transfers”
while development of Miden & Zero have continued in the background, Polygon Hermez (zkEVM) has captured excitement as Polygon’s zkEVM product was released on public testnet October 10th
Polygon’s zkEVM is currently slated to be live on mainnet in Q1 2023
Polygon’s commitment to ZK scaling & development is evident through their past ~$650M worth of acquisitions of ZK companies (Mir protocol & Hermez Network)
token: MATIC — market cap $5.82B with a $7.82B FDV — Polygon also confirmed that MATIC will be used across their suite of scaling solutions
a L2 ZK-Rollup scaling solution that “acts as a privacy shield for ERC20 token transfers and other DeFi interactions” — acts as a sudo VPN for ETH L1 transactions as the only current ZKR anonymizing transactions by default
Aztec’s zk.money has been live on mainnet for months and is described as a, “portal to using ETH DeFi services with full privacy & up to 100x cost savings”
launched core product Aztec Connect on July 7th which enables, “full privacy and L1 DeFi liquidity on Ethereum mainnet”
announced Noir, a universal zero knowledge language — “Rust-based domain specific language (DSL) for creating & verifying zero knowledge proofs”
ERC-4626 Bridge — optimized for yield protocol privacy & enables any protocol conforming to 4626 token standard to be added to zk.money & Aztec Connect
zkEVM-equivalent, L2-ZKR scaling solution — currently in “phase 2” of development with their zkEVM approaching testnet which is followed by phase 3 (layer 2 proof outsourcing) & phase 4 (zkEVM mainnet)
announced their upgraded Scroll Pre-Alpha Testnet on October 10th that now allows smart contract deployment on Scroll with native ETH tooling — testnet also now supports ERC-20, ERC-721, and ERC-1155 token standards
token: extremely likely to decentralize and compete with & incentivize users/liquidity from competitors such as MATIC, zkSync, StarkNet, etc. but there aren’t any currently public details
powered by StarkWare’s StarkEx, IMX is one of the leading ZK-tech enabled protocols with a specific gaming and NFT focused application
IMX’s scaling solution is most notably used by Gods Unchained & Illuvium (ILV) along with a strategic partnership with Turner Sports (TNT, TBS, Bleacher Report) & GameStop to build gamefi for “premier sports”
token: IMX — market cap $305M with a $1.07B current FDV
announced $32M of funding for their ZK enabled L1 on March 6th
Espresso describes themselves as, “a layer 1 blockchain system that combines proof-of-stake consensus and a ZK-rollup mechanism” which results in, “single-shot scaling & privacy solution.”
developed CAPE (Configurable Asset Privacy for Ethereum) — allows users to customize the privacy of their ETH assets & users/developers can “use CAPE to create new Ethereum assets and wrap existing tokens to have the privacy properties you require”
CAPE is currently live on Goerli testnet while the Espresso team continues iterating and building their core L1 protocol
Aleo is a ZK enabled, private by default base layer blockchain that “processes transactions off-chain which are then verified (rather than executed and re-executed) by network nodes.”
previously, Aleo raised $200M in series B funding, and announced on August 2nd that phase 1 of their Testnet 3 is live for developers — phase 2 & 3 should be live in the coming weeks to months allowing provers & validators to participate before an upcoming mainnet launch
token: confirmed, details scarce outside of December 2021 tokenomics post
others worth watching — Mina, Optimism’s Bedrock and ZK strategy, Arbitrum ZK strategy (if applicable), Iron Fish, zkBridge, & endless protocols building on ZKRs
While ZKRs are incredibly exciting and releasing (slowly) over the coming months and quarters, their competition across the ever-growing “Scaling Stack” continues to expand. The modular blockchain architecture is becoming a clear necessity while value accrual and winners across the “stack” are increasingly opaque. Importantly, while the teams and ecosystem support are unrivaled on ETH, ZKRs can be used throughout the “stack” and across various L1s and scaling solutions.
This “Scaling Stack” (Scaling Wars, etc.) is something I’ve previously written about in Round Tripping, and ZKRs join the aforementioned list of competition that includes, but is certainly not limited to, Cosmos & ICS developments, Celestia, Eclipse, Arbitrum, Fuel VM, AVAX subnets, Solana scaling initiatives, Optimism, Polygon’s suite of products, and appchains.
With that being said, ZKRs and ETH scaling are still in their early stages that should receive a major boost sometime in the next ~year through EIP-4844 (proto-danksharding) which increases rollup throughput by orders of magnitude. Scaling blockchains and improving infrastructure will continue to be the core focus of the next few years and I’ll be writing more in depth on the current and future protocols across the “Scaling Stack” in the next week or two.