zkSync L3: Scaling Ethereum to the Next Level

Ethereum is the largest crypto ecosystem and the main platform for the majority of DeFi (decentralized finance) DApps (decentralized applications). As crypto protocols are often faced with problems such as high gas fees and network congestion, many projects have decided to use Layer 2 (L2) scaling solutions to tackle these issues, so that they can increase network performance and user activity.

Ethereum L2 scaling solutions, such as Arbitrum and Optimism, currently offer transactions that are at least 10 times faster and cheaper than Ethereum’s. These networks have been increasing in popularity as compared to just a year ago. So what’s the next big jump for Ethereum to gain mass adoption? 

The answer is probably zero-knowledge (ZK) proofs ― and zkSync, which runs on ZK technology, is launching a Layer 3 (L3) scaling solution to scale Ethereum to the next level. Matter Labs, the development team behind zkSync, has also recently raised $200 million in a Series C round led by Blockchain Capital and Dragonfly. Andreessen Horowitz, better known as a16z, also contributed to the funding along with Variant and Lightspeed Venture Partners.

Read on to find out more about zkSync’s latest updates. 

What Is zkSync?

zkSync is an Ethereum L2 scaling solution that uses ZK technology to provide lower gas fees and faster transactions than other L2s, without any compromise on security.

The zkSync blockchain was originally created by Matter Labs with the goal of fusing ZK-Rollup technology with EVM compatibility. Its scaling solution uses assets held on the main chain, while computation and storage are performed off-chain. 

This makes zkSync superior to other L2 solutions in terms of security and ease of use, and ultimately makes validation faster and cheaper as well.

Read more: What Is zkSync: Ethereum Scalability With Zero Security Compromises

What Is zkSync 2.0?

zkSync 2.0 is an EVM-compatible ZK-Rollup powered by zkEVM that went live on the Ethereum Mainnet on October 28, 2022. Since its successful testnet in February, zkSync 2.0 has also upgraded its zkEVM architecture, rolled out dynamic fees and onboarded some huge partners into the ZK ecosystem.

The recent successful upgrade is its most significant update so far, as zkSync 2.0 introduces a custom virtual machine and EVM-compatible compiler to achieve its goal of combining both technologies. This allows any DeFi protocol or NFTs on the Ethereum blockchain to be deployed on zkSync, with little to no changes to their original code.

Since then, Matter Labs has also been hinting at a token release that’s generated a lot of hype in the community. According to their developer documentation, the company plans to release a token for its zkSync network, though no details or official plans have been released. 

Many are speculating that the zkSync token could be airdropped as an incentive for increased activities on the network, similar to the way in which Optimism previously rewarded its ecosystem users. Others believe that early users of zkSync 1.0 and 2.0 testnets could receive an airdrop as a reward for their participation.

That said, let’s take a look at the main differences between zkSync 1.0 and 2.0.

zkSync: 1.0 vs. 2.0

zkSync version 1.0 was released on the Ethereum Mainnet on June 15, 2020 with a low throughput of up to 300 TPS (transactions per second). The team has since launched zkSync 2.0, with a throughput of over 20,000 TPS, plus the ability to support smart contract functionality for both the Solidity (zkEVM) and Zinc programming languages.

To elaborate, zkSync 1.0 offered only basic functions, such as token transfers between wallets. Smart contracts weren’t enabled, so that many popular DeFi activities requiring smart contracts — such as liquidity provision, borrowing and lending, staking, and more — weren’t available. 

Currently, with zkSync 2.0, smart contracts are supported using their own virtual machine framework, known as Zinc. Zinc’s language is based on Rust, a more secure and effective language compared to the popular Solidity language that’s used on Ethereum.

The other more prominent update is the EVM-compatible compiler known as zkEVM, which is potentially a game changer for ZK adoption as the first native EVM-compatible ZK-Rollup.

Its adoption would allow most of the existing Solidity smart contracts from current DeFi protocols (including NFTs) to be deployed on zkSync 2.0, without many changes to the codebase. This will in turn save a large amount of time and effort on the developers’ end. 

Introducing zkSync’s Layer 3 Scaling Solution

zkSync will soon be launching its brand-new L3 scaling solution, which will provide potentially limitless scaling on Ethereum.

The zkSync team has created a set of developer tools, including a CLI and SDKs, to allow others to spin off their own L3 and interact with it. zkSync L3 will be built on top of their current L2. Its public testnet is set to go live in Q1 2023.

Source: zkSync

Since its Baby Alpha mainnet launch, the team plans to further onboard developers and DApps to the L2 blockchain before releasing a full L2 launch for improved developer and user experience in the future. This will be followed by the proof-of-concept launch around the “ultimate scaling solution” known as the zkSync L3 Opportunity.

The L3 Opportunity is being developed as a trustless and customizable blockchain ecosystem that’s powered by zkEVM, and will be the first L3 that utilizes a ZK-Rollup known as a “fractal hyperchain,” featuring performance at least 10x to 100x higher than that of L2.

zkSync believes that their L3 prototype will offer immeasurable potential to greatly enhance various aspects of blockchain performance, including scaling, personalization and security.

The future L3 will feature an exponentially quicker, less expensive and more practical platform for both developers and users to interact on.

Why Will zkSync’s Layer 3 Scaling Solution Be Better?

zkSync’s L2 introduced a native general-purpose EVM and Solidity-compatible ZK-Rollup for Ethereum without affecting security or decentralization — thus keeping with the Ethereum ethos and essentially setting the foundation necessary for Ethereum to scale. 

However, zkSync’s Layer 3 is where mass adoption will occur, due to its promise of unlimited scalability. It’s envisioned to enable an ecosystem of modular blockchains powered by zkEVM that are trustlessly linked. The ecosystem will be called HyperChains, and will bring a whole host of benefits. 

L3 will change the face of Ethereum across five key pillars:

1. Security: 

Interactions across the HyperChains will occur via native bridges, offering a far more secure environment by mitigating the risk of exploits of non-native bridges that have already resulted in billions of funds being lost.

2. Performance:

L2 brought about performance increases of up to 100X, but L3 can bring about unlimited performance improvement.

3. Cost:

Thanks to ZK proofs and choices of data around data availability solutions, costs can be significantly cheaper. This ultimately also helps with mass adoption.

4. Ease of use:

There will be many enhancements to SDKs and CLIs, and even the introduction of low-code or no-code solutions for various use cases in the ecosystem. These improvements will allow apps to be deployed far more easily, while still being inexpensive and secure.

5. Composability:

Using zkSync’s LLVM compiler, L3 can support any modern programming language — Rust, C++, etc. — on top of Ethereum’s Solidity.

Depositing and Withdrawing Crypto on Bybit With zkSync

With the latest EVM compatibility and smart contract support on zkSync 2.0, the chain now supports over 60 types of ERC-20 tokens such as AAVE, ETH and MATIC, and the biggest stablecoins, like Dai, USDT and USDC.

Take advantage of zkSync’s high security, fast withdrawals and low fees by signing up with Bybit, and transacting with us. Get the most out of your cryptocurrencies by utilizing zkSync through Bybit today.

The Bottom Line

zkSync has great potential to accomplish its lofty goals in properly addressing scalability challenges, while preserving mainnet levels of security, user privacy and complete decentralization as a platform.

While the current version of zkSync works well for most DApps on Ethereum, zkSync L3 will give developers a space to experiment with DApps that’s not currently possible with Ethereum. In addition, numerous features are planned for release soon.

As the zkSync team experiments with their latest L3 solution to improve current performance levels, zkSync will continue to focus on its five main pillars and further develop its infrastructure so that it can easily onboard developers into its ecosystem.