Ethereum has been struggling with slow transaction processing and high fees, which prompted the emergence of "Layer2" networks. One of the solutions that has been developed to address these issues is "Rollups." Two types of Rollups are available: Zero-Knowledge Rollups (ZK-Rollups) and Optimistic Rollups. ZK-Rollups use advanced cryptography to enable efficient and private transactions, which leads to faster fund withdrawals than Optimistic Rollups. Introducing Layer 2 solutions such as Scroll, Polygon, StarkNet, and zkSync has helped improve scalability and reduce fees. However, these solutions may face challenges such as liquidity fragmentation.
zkLink aims to tackle liquidity fragmentation and slow transactions by building the first ZK aggregated Layer 3 and accessing limitless liquidity with a middleware solution that consolidates liquidity. For this month's review, we will cover a range of topics related to zkLink, including its founding team, fundraising efforts, and the two products.
What is zkLink Nova and zkLink X
The zkLink team has not just developed products, but they have created two unique offerings: zkLink Nova and zkLink X, each with its own distinct features and benefits.
zkLink Nova is an innovative Aggregated Layer 3 zkEVM Rollup network built on zkSync's ZK Stack and zkLink Nexus tech. It merges liquidity and assets from Ethereum and Layer 2 rollups into a single interoperable platform for developers to deploy EVM-compatible dApps. It eliminates the need for third-party protocols for asset bridging, ensuring zero-knowledge proofs access combined liquidity from Ethereum and Layer 2 networks. The team has built an ecosystem of over 60 partners to steer the Layer 3.
ZkLink X is a solution to the challenges of blockchain interoperability and standardization. It achieves this by using zero-knowledge-proof technology to offer an aggregated rollup infrastructure. This infrastructure simplifies the deployment of multi-chain dApps and resolves liquidity fragmentation. With its fast multi-chain product deployment and multi-chain liquidity aggregation capabilities, it provides high-throughput, low-cost trading solutions for financial applications such as Order Book DEX."
Key features include:
- Native asset aggregation, where tokens from various L1 blockchains and L2 rollups are unified into a single token, eliminating the need for cross-chain asset bridges and simplifying wallet management.
- Liquidity unification ensures that tokens of the same kind issued on different chains are merged into one, enhancing liquidity aggregation.
- Additionally, zkLink X provides customizable app rollup deployment, allowing developers to tailor components to meet diverse use case demands. These include network collections, settlement layers, execution environments, and decentralized sequencers.
Using its technology, the live Alpha Mainnet has had over 2 million transactions and 500k unique addresses using its technology.
Tokenomics
zkLink plans to release its token, $ZKL, in 2024, enabling users to leverage its rollup infrastructure service. Token holders will also have voting rights on zkLink project decisions. zkLink offers a proof generation market where Provers can stake $ZKL tokens to complete proof-related tasks and earn $ZKL rewards. $ZKL is the primary payment token in zkLink's proof market, and dApps built on zkLink infrastructure will pay provers in $ZKL for their proof services, as well as pay fees in $ZKL to the zkLink DAO, the project's governing organization, for building their rollups. ZKL may also be used for in-app fees. In the future, ZKL holders can use their governance rights to participate in zkLink's decision-making process via the zkLink DAO.
ZKL will launch with a maximum token supply of 1 billion without inflation. Approximately 18% of the token supply will be released at TGE, followed by a linear vesting period of 42 months. The token’s allocation is as follows:
- Community Treasury (~29.88%)
- Ecosystem development (22.5%)
- Early Private Purchasers (20.55%)
- Team and Advisors (20.00%
- Liquidity Reserve (4.00%
- CoinList Sale (~3.13%)
Team, Fundraising, and Ecosystem
Regarding funding, zkLink raised $10 million in a strategic funding round from a line of investors, including Coinbase Ventures, Ascensive Assets, SIG DTI, BigBrain Holdings, Efficient Frontier, and others. This funding brought the infrastructure's funding to $18.5 million, with previous investors including Morningstar Ventures, Arrington Capital, Huobi Capital, and more. The team behind Nova protocol has secured a total funding of $23.1 million, including $4.6 million from a CoinList community sale in January. The primary objective of this funding is to enhance the development of the Nova protocol.
Nova Protocol's co-founders, Vince Yang (CEO) and Evan Zhang (CTO), started their crypto journey in 2020. They built a multi-chain DEX but faced security and efficiency challenges in cross-chain transactions. They pivoted to zkLink Labs, which aims to aggregate liquidity and establish a unified ecosystem. Today, they lead a diverse team of over 50 experienced individuals in the crypto industry.
What’s Next for zkLink
zkLink is preparing for its TGE and enhancing its offerings for developers and users by integrating a modular DA and a decentralized sequencer service. The integration will improve security and cost benefits. The Ecosystem Grants Program provides milestone grants of up to $50,000 ZKL per project to encourage the ecosystem's growth. The program is open to DeFi projects such as DEXs.
