Weekly Market Highlights - A New Era for zkEVMs

Binance Research Team

2023-03-31 14:52

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31 March 2023

Happy Friday! The Weekly Market Highlights is an initiative from the Binance Research team to round up the week, summarizing key market events and views from the team.

🔎 Macro / TradFi

First Citizens BancShares has acquired Silicon Valley Bank. The deal includes the purchase of ~US$72B of SVB’s loans at a US$16.5B discount and the transfer of $56B worth of the bank’s deposits.

🔎 Crypto

L1/L2:

BNB Chain has launched a proposal to adopt lower transaction fees to enhance the competitiveness of the chain. This comes as L2s are becoming more mainstream, offering users with competitive fees. It is stated that this approach would “help sustain the BNB economy and improve BSC’s position in the market.”
What a week for Ethereum Layer-2 scaling solutions! Matter Labs has released zkSync Era, making it the first zero-knowledge (“zk”) rollup compatible with the Ethereum Virtual Machine (“EVM”) solution to have gone live on mainnet. This marks a major milestone for the Ethereum scalability roadmap. Developers will not need to make significant changes to their code to deploy applications between zkSync Era and the Ethereum mainnet.
Hot on the heels of zkSync Era, Polygon has also launched its zkEVM solution to the public earlier this week. Vitalik Buterin sent the first transaction on Polygon zkEVM which included the following message converted into hex code: “A few million constraints for man, unconstrained scalability for mankind.”
ZK-proofs are coming to Bitcoin. Yes, you heard that right. The newly-formed ZeroSync Association is developing tooling which allows users to validate the state of the Bitcoin network without having to download hundreds of gigabytes of blockchain data or trust a third party for verification.

DeFi:

In a twist of events, the hacker behind the recent ~US$200M exploit on Euler has returned over US$120M to the protocol. In a series of blockchain messages, the hacker apologized and revealed himself as “Jacob”. He also stated that "the rest of the money will be returned ASAP.”
dYdX, a decentralized exchange that supports perpetual trading, continues to make progress on its migration to Cosmos and has launched its private testnet of its Cosmos-based blockchain. dYdX is estimated to go live on Cosmos in September.
MakerDAO, the platform behind the DAI stablecoin, has approved the “Constitution” which includes a set of rules outlining the protocol’s governance and development, among others. This includes measures to decentralize DAI collateral, and to break up the DAO’s current structure into smaller units called SubDAOs.

Stablecoins

Following recent market events, Circle has announced that it has taken steps to reduce risk from the banking system. The issuer behind the USDC stablecoin claims that “substantially all of the cash portion of the reserve” is now held at one of the world’s 30 global systemically important banks.
USDC will soon be available on Cosmos via the Noble network. Based on Noble’s announcement, this marks the first “native, fiat-backed stablecoin that is highly liquid and fully collateralized.” The exact date of the launch has not been announced.

Metaverse/Gaming:

Gucci has partnered with Yuga Labs, the creator of Bored Ape Yacht Club, to explore the opportunities in the metaverse. Details are scarce but Gucci tweeted that its metaverse presence would take the form of a “new narrative” capable of “blurring the boundaries between the physical and digital.”
Meanwhile, Yuga Lab’s Otherside has launched Legends of the Mara, a new strategy game. The game utilizes the Otherside Koda collection, as well as a new collection called Mara, which can evolve into Kodamara.

Others:

Disney has reportedly eliminated its metaverse division in a recent round of layoffs. This follows news of other web2 tech firms such as Microsoft and Meta that have reduced their metaverse efforts in recent months.

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Weekly Market Highlights - A New Era for zkEVMs