Recently, Arbitrum has once again made the Layer 2 narrative popular because of its airdrop. On OP Rollup, the two major tracks, Optimism and Arbitrum, have landed and brought huge wealth effects. Another major L2 narrative, the ZK track, has become one of the most concerned objects in the current industry. In fact, from the perspective of landing prospects, although ZK Rollup is much more difficult than OP Rollup, its development prospects will also be broader than OP Rollup.

After all, the development of OP Rollup is only for the ERC category, which is a bit too limited. However, ZK Rollup can provide support for areas beyond the ERC category, and even the implementation of zero-knowledge proof can help the trust proof of the entire real society, which is more realistic.

On March 24, Matter Labs CEO Gluchowski said in an interview with The Block that zkSync will achieve sequencer decentralization (issue tokens) in about a year.

Due to the experience of the two major infrastructure airdrops, OP and ARB, many people believe that zkSync has reserved a one-year window for the industry to "take advantage of airdrops". Therefore, the veDAO Research Institute has compiled 12 projects in the current industry ZK track that have not yet issued tokens, which may provide some foresight on the 2024 halving cycle and the wealth expectations under the outbreak of the zk ecosystem.

ZK is the end?

First of all, we need to have a simple understanding of zk:

Zero-knowledge proof (English: zero-knowledge proof) or zero-knowledge protocol (zero-knowledge protocol) is a method for one party (prover) to prove a proposition to another party (verifier). The characteristic is that no information is disclosed except that "the proposition is true" in the process. Therefore, it can be understood as "zero disclosure proof". For example, if you want to prove to others that you have certain information, you can directly disclose the information, but this will also disclose the details; the essence of zero-knowledge proof is how to prove that you have the information without revealing the content of the information. This is also the difficulty of zero-knowledge proof.

for example:

  • A room, the door and windows are all locked with passwords. At the door, Alice wants to enter the room but does not know the password;

  • After seeing this, Bob tells Alice that he knows the passwords to the door and windows and can sell them to her for $100 if she needs them.

  • Alice doubts the authenticity of Bob's password. Unless Bob tells Alice the password in advance and Alice verifies it, Alice will pay Bob $100 after the verification is successful.

  • Bob is worried that after the password is shared, his information will no longer be unique and will lose its value, so he makes a suggestion;

  • Alice stands 20 meters away from the door. Bob opens the door first, enters the room and opens the window.

  • As long as Alice sees the window open, it proves that the password Bob has is authentic and valid;

  • And Bob doesn't have to worry about the password losing its value due to sharing it in advance.

During the entire process, neither Bob's verification nor Alice's confirmation resulted in password leakage.

This logic is the basis of zero-knowledge proof. The reason why zero-knowledge proof is so popular in the field of blockchain and cryptocurrency is that people have a growing demand for privacy and security in digital transactions. With the rise of blockchain technology and cryptocurrency, people are increasingly in need of a method that can verify transactions without leaking sensitive information, and ZKP can meet this demand.

The technology is increasingly important for improving the privacy and security of blockchain, cryptocurrency, and decentralized finance (DeFi). Many DeFi projects have applied ZKP to services such as lending and trading to provide users with better privacy and security. Many Layer 1 blockchains are adding ZKP-based rollups or zero-knowledge Ethereum virtual machines (zkEVM). As the adoption rate of zero-knowledge proof applications increases, it is expected to play an increasingly important role in the blockchain and Web3 fields. At the 2022 Developer Conference (DevCon), more than 20% of the discussions centered on zero-knowledge proof technology, indicating that the technology is popular.

ZK Prospects:

In fact, with the popularity of the concept of zero-knowledge proof, more and more DeFi products have begun to accept and use this new technology. In particular, zk Rollup has become the preferred second-layer network solution for Ethereum expansion together with OP Rollup. By using Rollup, users can reduce gas fees by up to 100 times compared to the first-layer network.

Compared with OP Rollup, its advantages are: higher security, stronger transaction confirmation timeliness, TPS and transaction costs are significantly better than OP Rollup; but its disadvantage is that it is not easy to be compatible with EVM.

Currently, zero-knowledge proofs are widely used in the following fields:

  • Identity Authentication: Zero-knowledge proofs can be used to verify user identities without revealing any sensitive personal information.

  • Credit record: Users can selectively show their credit records to the other party. On the one hand, they can selectively show the record score that meets the other party's requirements and prove the authenticity of the credit record.

  • Decentralized storage: The server can prove to users that their data is properly stored without revealing any specific content of the data.

  • Anonymous governance: allows voters to vote, which can be verified, but the identity of the voter will not be revealed.

  • Transaction confidentiality: With cryptocurrencies that use ZK technology, the sender and receiver addresses and transaction amounts can be shielded from the public blockchain, improving the privacy of user transactions.

  • Compliance: Some countries have strict regulations on the collection and sharing of financial information, which can be difficult for decentralized platforms to comply with. Zero-knowledge proofs can be used to share required information with regulators while keeping it confidential from other parties.

The ZK track has always been endowed with a very high expected wealth return rate by the market. This is not only because the realization of the Ethereum second-layer network will greatly help the industry, but also because of the increasingly stringent global supervision, and the financial crisis, bank collapse and other black swans have led to users' growing distrust of the centralized financial world. A sound and reliable identity and information verification concept based on a decentralized network has become increasingly valued. So important products in the ZK track, such as zkSnyc, StarkNet, LayerZero, Arbitrum, and SuiNetwork, are called the hottest air bids in 2023/24.

The following are zk Alpha products specially selected by veDAO Research Institute, which have potential wealth effects and are still in the early stages of "getting on board".

project

zkSync



Official website: https://zksync.io/

Twitter: https://twitter.com/zksync

More information: https://app.vedao.com/projects/3ec8ac45896ea13bc6929b44f2a9d9e0712057d1201823df5ec764c320054179

zkSync is a 2-chain that uses ZK rollup technology to solve Ethereum's current scalability issues. The chain has been developed by Matter Labs since 2019 and is currently in the Baby alpha stage and is undergoing internal mainnet testing.

zkSync stands out through its low transaction costs (a few cents per transaction) using ZK SNARK technology, security that benefits from Ethereum's security, and decentralization. zkSync also offers interoperability thanks to its V2 launch in February 2022, making it the first ZK-Rollup compatible with the EVM, an achievement that should have taken several years.

zkSync focuses on 5 main Ethereum-related properties:

  • As a general protocol;

  • EVM compatibility;

  • Gas fees paid in ETH;

  • Open source and decentralized.

Come on



Official website: https://www.aleo.org/

Twitter: https://twitter.com/AleoHQ

More information: https://app.vedao.com/projects/29a3341b8d4af3c4f208f627a9cb052a61daae387c2937e611467432b324b1ad

Aleo is the first decentralized, open-source platform that supports private and programmable applications. By opting out of privacy by default, Aleo enables a sustainable, fair Web3 world that meets the needs of developers, consumers, and enterprises.

Aleo uses zero-knowledge cryptography to achieve privacy and programmability. Zero-knowledge cryptography and zero-knowledge proofs allow a third party to verify the authenticity of a piece of information without us revealing it directly. Aleo uses this as the basis for a system called ZEXE (Zero-Knowledge Execution). In ZEXE, users perform state transitions offline. This process produces a proof, which is bundled into an on-chain transaction. The transaction updates the state of the system by consuming/creating on-chain records. Like Zcash, this system gives us strong privacy guarantees because the transaction only contains the proof, not the inputs that generated it. Like Ethereum, ZEXE can support smart contracts that enable users to interact or transfer value in predefined ways.

StarkWare



Official website: https://starkware.co/

Twitter: https://twitter.com/StarkWareLtd

More information: https://app.vedao.com/projects/b3d1b7b9127814e0a648bb431ed75e8ad46b5a03fa613d5fd53ea0897438f039

StarkWare protects blockchain privacy data by utilizing concise zero-knowledge proof technology, which can be used for applications ranging from verifiable computing to privacy-preserving cryptocurrencies. StarkWare aims to bring transparent privacy and scalability to blockchains. StarkWare is working to use STARK technology to improve two critical factors in the blockchain world: scalability and privacy. Its role is not only to promote the use of STARK technology, but also to provide "zero-knowledge, concise, transparent, obvious, and secure" cryptographic proofs.

StarkWare will develop a complete verification stack: software and hardware to support the fast and reliable generation and verification of computational integrity proofs for general computations. Its report is the first implementation of a transparent ZK system (ZK-STARK) where verification scales much faster than the database scales.

StarkWare is vigorously promoting the "zk-starks" blockchain privacy solution developed by the Israel Institute of Technology. This solution protects blockchain privacy data through a zero-knowledge proof protocol, verifies private information without consuming a lot of computing power and deploying special software, and can also compress data to a smaller size, improving efficiency, transparency and security. Using StarkWare technology, the scalability and privacy of blockchain can be improved.

Aztec Network



Official website: https://aztec.network/

Twitter: https://twitter.com/aztecnetwork

More information: https://app.vedao.com/projects/557b916f01df4f8803a3890fe9a995bc6439712332f9f97c8a7c1e5a7de0423d

Aztec Network is positioned as a privacy-based ZK Rollup based on Ethereum, aiming to help users access Dapps in the Ethereum ecosystem privately and efficiently. The project has currently launched two main products, one is zk.money, a privacy transfer protocol based on Aztec Rollup, and the other is Aztec Connect, a privacy bridge that links Ethereum Dapps and Aztec Rollup.

Relying on zk.money and Aztec Connect, users can transfer money freely without exposing their own information (address, funds, etc.), and securely access multiple mainstream DeFi protocols such as Lido, Element, Aave, Compound, Uniswap, etc.

It is worth noting that on March 13 this year, Aztec Network announced that it would gradually shut down its DeFi privacy bridge project Aztec Connect, and would disable deposits from zk.money and other front-ends (such as zkpay.finance) into the Aztec Connect contract a week later.

The team will focus on two new major products in the future:

  • Noir, a general-purpose development language that supports zero-knowledge proofs;

  • A new privacy-focused blockchain

Scroll



Official website: https://scroll.io/

Twitter: https://twitter.com/Scroll_ZKP

More information: https://app.vedao.com/projects/511850511badaa09b4631e41c6dc15537a00673c7e1dbb2aff59b497a41cc354

Scroll is committed to creating a more universal zero-knowledge proof scaling solution and boldly announced the decentralization of power to the community, allowing nodes, provers, developers and users to build the Scroll community together. By building openly with the community and creating a reliable path for on-chain proof and sorting, Scroll is committed to ensuring decentralization at all levels.

zkLend



Official website: https://zklend.com/

Twitter: https://twitter.com/zkLend

More information: https://app.vedao.com/projects/c5e7e5e81786c6e51838bcfdd9d7e1fb27224f075f511d9c5bbeccc4aef748ef

zkLend is a money market protocol that combines zk-rollup scalability, superior transaction speed and cost savings with the security of Ethereum. zkLend is an L2 money market protocol built on StarkNet that combines the scalability of zk-rollup with the security of Ethereum, enabling participants to efficiently earn interest on deposits and seamlessly borrow assets. The zend token issued by Zklend will have three major functions: 1. Preferential borrowing rates; 2. Improved borrowing capacity, and 3. Governance participation.

zkLend has now completed a $5 million seed round of financing led by Delphi Digital. Other major investors include StarkWare, Three Arrows Capital, Genesis Block Ventures, Alameda Research, CMS, MetaCartel DAO, DCVC, Amber Group, TPS Capital, Ascensive, D3 Web Capital, 4 RC and SkyVision Capital, as well as other angel investors.

Mint Square



Official website: https://mintsquare.io/starknet

Twitter: https://twitter.com/MintSquareNFT

More information: https://app.vedao.com/projects/db3b566df62ea3a72fe5fd2245ab1f6da86d844fae44634e04a029e93c5c9de4

Mint Square is an NFT platform on ETH Layer 2 ZK Rollup. Mint Square is an NFT platform on ETH Layer 2 ZK Rollup, aiming to build the best multi-chain ZK Rollup NFT market, integrating StarkNet and zkSync Era.

ZKEX



Official website: https://zkex.com/

Twitter: https://twitter.com/ZKEX_Official

ZKEX is a decentralized L2 multi-chain order book exchange (DEX) built on three ZK-rollups: zkLink, Starkware, and zkSync. Users will be able to trade assets from multiple different chains with a similar experience to Binance or Coinbase, but ZKEX will be decentralized, trust-minimized, and non-custodial, with transactions protected by zero-knowledge proofs.

Iron Fish



Official website: https://ironfish.network/

Twitter: https://twitter.com/ironfishcrypto

Iron Fish is a new cryptocurrency that uses zk-SNARKs and the Sapling protocol to protect every transaction. Anyone can run a node and contribute to its codebase.

By using zero-knowledge proofs, Iron Fish can construct private transactions that completely hide the sender, receiver, and amount, while providing proof that the transaction is valid. Every transaction on Iron Fish is private - no one can see the details of an account unless the owner grants read-only access via a viewing key.

YellowSubmarine



Official website: https://ys.finance/

Twitter: https://twitter.com/Yellow_Subm

Yellow Submarine is the first and only dApp that provides private transactions for all EVM-compatible chains. It creates a privacy layer that can span any Ethereum ecosystem.

Through YS's intuitive interface, users can use the MetaMask wallet to deposit a stablecoin, such as USDC, on any EVM-compatible chain and withdraw it in the form of BUSD or USDT from another EVM-compatible chain without any public traceable link. Future versions of YS will allow users to keep the privacy tokens they hold - users do not need to disclose the type of tokens they hold and can dispose of them at will.

Yellow Submarine also provides a one-stop solution for crypto asset holders who join its liquidity treasury to profit from selected DeFi applications from various EVM-compatible chains. This is similar to providing liquidity to DeFi applications such as lending pools and earning additional income from cross-chain fee income. Compared with using regular DeFi applications, YS's liquidity providers can earn higher returns from multiple sources by adding liquidity incentives and a pair of utility tokens (CUN) and governance tokens (veCUN).



Official website: https://www.nulink.org/

Twitter: https://twitter.com/NuLink_

Nulink is a privacy-preserving technology platform for distributed applications that allows users to remain anonymous (Daaps). The project will bring enterprise-grade security solutions to developers, startups, small businesses, and enterprises to achieve this goal. As its technical foundation, the Nulink technology platform includes blockchain, access control (proxy re-encryption, attribute-based encryption), and secure computing (zero-knowledge proof, secure multi-party computing, fully homomorphic encryption) technologies. It provides data exchange and processing capabilities across the enterprise.

Nulink is building a solid technology foundation by combining best-in-class technologies. The integration of the application layer, cryptographic layer, storage layer, blockchain layer, and the Watcher Network is achieved through this matrix. It is very easy for Nulink users to integrate into a single API and access various storage and blockchain solutions. The network integrates NuCypher for key management. Bitcoin miners can earn $NLK by providing decentralized storage facilities, and they can earn $NLK by passing information from ETH to the Watcher layer.

Starkswap



Official website: https://www.starkswap.co/

Twitter: https://twitter.com/starkswap

More information: https://app.vedao.com/projects/29360a5d8a935cdba00c71caa60c5a5a81621c8f8a3816125b596fee13ed2c40

Starkswap is the first AMM DeFi product built on StarkNet, a public ZK-Rollup; Starkswap is built on top of the underlying infrastructure and users will enjoy lightning-fast transactions at a cheaper cost (initially gas-free) while still benefiting from the security of Layer 1 Ethereum.

Starkswap is a strong contender for the main AMM on Starknet. The team launched the testnet in March and announced that V1 was rebuilt from scratch to support custom curves.

They also recently launched Iron Fleet with Yearn, a new protocol on Starknet that allows users to pool their assets when interacting with first-layer DeFi protocols. This allows Gas to be shared among users, reducing the cost of operations for everyone.

Summarize

From the perspective of airdrops alone, whether it is the previous OP, the current ARB, or the upcoming Aptos, Sui, and next year's zkSync, the infrastructure has always been a "big deal" and an important manifestation of the wealth effect.

The transmission of the wealth effect often starts from infrastructure such as public chains and middleware, then reaches the basic applications of the ecosystem, such as stablecoins, lending, exchanges, etc., and finally spreads to non-basic applications (social, games).

At present, on the eve of the outbreak of the zk track, it is necessary for us to pay full attention to the infrastructure and basic applications of the zk track.

References:

https://www.odaily.news/post/5184314

About veDAO

veDAO is an investment and financing community dedicated to discovering early potential projects. By gathering public wisdom and professional opinions, it provides fair, transparent and democratic project evaluation and investment and financing processes for community participants, investors and project parties, allowing all participants to share the dividends of project development.