In a remarkable display of growth and investor confidence, Matter Labs’ zkSync Era, an Ethereum Layer 2 scaling solution, has witnessed its locked value surge past $500 million.
The total value locked (TVL) on zkSync Era experienced a remarkable 12% increase within a week, according to data source L2Beat.
This milestone highlights the continuous attraction of capital to this zero-knowledge (ZK) rollup, which aims to address Ethereum’s scalability challenges.
Understanding zkSync Era and its Impact:
Unleashing the Power of the zkSync Era
zkSync Era, a zero-knowledge (ZK) rollup solution, has emerged as a leading contender for scaling Ethereum.
By combining Ethereum Virtual Machine (EVM) compatibility with native account abstraction, this Layer 2 network offers a promising solution to enhance Ethereum’s scalability without compromising on functionality.
The ability to retain full EVM compatibility allows seamless integration of existing Ethereum-based applications.
zkSync Era’s Growing Locked Value
The recent surge in capital inflow is evident in the significant rise of the total value locked (TVL) on the zkSync Era.
Currently standing at over $500 million, the TVL has witnessed a remarkable 12% increase within just one week, as reported by L2Beat.
The TVL metric measures the total value of digital assets locked or staked on decentralized finance platforms, reflecting the trust and adoption of the zkSync Era by investors and users.
Looks like its going to be Zk season.
Polygon zkEVM, Starknet and zkSync Era are continuing to put all time highs as TVL, Daily Active addresses and Daily transactions continue their uptrend. pic.twitter.com/vfUcnHNoPA
— Emperor Osmo🧪 (@Flowslikeosmo) June 18, 2023
zkSync Era’s Prominent Position
Within the realm of rollup solutions, zkSync Era has positioned itself as a leading contender, standing as the third-largest rollup by total value locked, closely following Arbitrum and Optimism. This notable achievement further solidifies the confidence in zkSync Era’s ability to address Ethereum’s scalability concerns effectively.
Asset Breakdown on zkSync Era
The thriving ecosystem of the zkSync Era can be gauged by the range and quantity of assets locked within the network.
Presently, more than 220,000 ether (ETH) worth approximately $378.3 million, around 121 million USDC (a dollar-pegged stablecoin), and 14.43 million MUTE, with a value of $7.53 million, are securely locked on zkSync.
MUTE represents the native cryptocurrency of Mute, a decentralized exchange built on zkRollup technology.
Increased User Activity and Adoption
An encouraging sign for zkSync Era is the steady growth in daily active addresses since its launch in March 2023.
Over the past four weeks, the network has witnessed an average of 175,000 daily active addresses.
This surge in user activity signifies the increasing demand for Layer 2 solutions and demonstrates the viability and acceptance of the zkSync Era within the Ethereum community.
Integration of Liquid Staking Solution and Ethereum Improvement Proposal (EIP) 4844
The integration of Rocketpool, a liquid staking solution, onto zkSync Era, adds another notable milestone to the network’s accomplishments.
This move aligns with the broader trend of decentralized applications migrating to Layer 2 platforms, indicating the growing interest and recognition of the zkSync Era’s potential.
Furthermore, Ethereum’s core developers’ focus on implementing the Ethereum Improvement Proposal (EIP) 4844 has played a significant role in driving user demand for rollup solutions.
This proposal introduces a new transaction type that reduces transaction fees on rollups, making them more cost-effective and attractive to dApps built on Ethereum.
The Zk Season Ahead
The surge in activity and performance of ZK rollups, including the zkSync Era, has prompted some industry observers to anticipate a “Zk season” in the crypto market.
This term refers to a period where ZK rollups outperform other market sectors by a significant margin.
Notably, the brisk activity observed on other ZK rollups such as Starknet and Polygon zkEVM further supports this trend.
Galaxy Digital’s Insights
Galaxy Digital, a prominent player in the cryptocurrency space, recognizes the importance of rollup solutions for Ethereum’s long-term scalability.
Alex Thorn, the Head of Research at Galaxy Digital, highlighted the significance of Ethereum Improvement Proposal (EIP) 4844 in a newsletter dated June 2.
Thorn emphasized that the prioritization of EIP 4844 as the next major code change in Ethereum’s forthcoming Cancun/Deneb upgrade affirms the need for dApps built on Ethereum to migrate the majority of their operations to cost-effective rollups.
Future Prospects and Implications
The exceptional growth of the zkSync Era and the broader adoption of ZK rollups underscore the increasing significance of Layer 2 solutions for Ethereum’s ecosystem.
As more decentralized applications recognize the scalability benefits and cost-effectiveness of rollups, it is likely that the locked value on zkSync Era and other ZK rollups will continue to surge.
This bodes well for the overall growth and development of the Ethereum network, facilitating a more efficient and sustainable decentralized finance ecosystem.
zkSync Era, Matter Labs’ Ethereum Layer 2 scaling solution, has surpassed a significant milestone by locking a total value of over $500 million.
Its ability to retain EVM compatibility while ensuring native account abstraction positions it as a formidable contender in addressing Ethereum’s scalability challenges.
With increasing user adoption, the integration of liquid staking solutions, and the imminent implementation of Ethereum Improvement Proposal (EIP) 4844, zkSync Era and ZK rollups are poised to play a pivotal role in shaping the future of Ethereum and decentralized finance as a whole.
As the crypto market enters the “Zk season,” the potential for ZK rollups to outperform other sectors serves as a testament to their growing prominence and value within the blockchain ecosystem.