ZkSync (ZKS)

zkSync is a L2 ZK rollup

Basics

• Based in:
• Development began in 2019.
• Mainnet release zkSync 1.0: 18-6-2020
• Opened up registrations for developers for it's "mainnet" zero-knowledge rollup platform (17-2-2023).

Audits & Exploits

• Bug bounty program can be found [insert here].
• From L2beat (13-10-2022) on zkSync:

"Funds can be stolen if…

1. the cryptography is broken or implemented incorrectly,
2. a contract receives a malicious code upgrade. There is a 21 days or 0 if overridden by 9/15 MSig delay on code upgrades.

Funds can be lost if…

1. the user is unable to generate the non-trivial zk proof for exodus withdraw.

Users can be censored if…

1. the operator refuses to include their transactions. They can still exit the system.

MEV can be extracted if…

1. the operator exploits their centralized position and frontruns user transactions."

Bugs/Exploits

• Got hit with the Inscription wave. Made its nodes lag, but did not halt the chain (16-12-2023). zkSync Era network issued (26-12-2023) post-mortem: safety procedure caused sequencer to wait for computed state update mismatch to be resolved
• From ChainLight (2-11-2023):

"On September 15th, we discovered and reported a critical bug in @zkSync Era's ZK-Circuits that could have drained all the tokens passing through the bridge. This bug allows a malicious prover to produce "proofs" for invalidly executed blocks, which the verifier smart contracts on L1 would have blindly accepted. Since our bug discovery, $1.9B has passed through the bridge. Matter Labs quickly reacted to the report and deployed a fix for the issue. For disclosing a critical issue, they proactively awarded us with 50K USDC."

• zkSync went down (1-4-2023):

"This incident resulted in over 4 hours of downtime, but the fix for the issue only took 5 minutes. One reason for the slow response time in responding to this issue is that the monitoring for the database that went down failed to work as expected. The protocol tweeted “The database health alert did not trigger because it could not connect to it to collect metrics.” Another reason given for the delay is that all the team was at an off-site, so they did not have engineers in multiple time zones like normal. Downtime started at block 5308 until block 5312."

Governance

ZK Nation

• zkSync governance went live, with the community voting on scheduled upgrades and a security council being able to pause withdrawls, but not do emergency upgrades (12-9-2024).
• From Decrypt (11-6-2024):

"An initiative where the community, security experts, and technical experts will work in tandem to maintain and grow the ZKSync ecosystem.

For now, the privacy-focused network said its ZK Nation will oversee three major divisions, which will be responsible for all network-related activities.

ZkSync Token Assembly will be a community-driven initiative whose primary objective is to participate in the on-chain governance of the protocol. These will include putting forth proposals, voting on proposals, delegating votes, and more.

ZkSync Guardians will embody the principles of ZK Credo. Its members will have the ability to enforce actions to safeguard the protocol such as taking emergency actions, vetoing actions, and more. Initially, five individuals will take on the mantle of being a ZKsync Guardian. Their identities will be revealed later.

The ZkSync Security Council will be the third pillar of the initiative. It will consist of cybersecurity professionals, engineers, and auditors. They will provide technical reviews of the upgrades put forth by the Token Assembly. Further, they will have the power to halt the entire protocol or parts of the protocol in order to combat threats arising from critical bugs and exploits. At launch, twelve individuals will be part of this group."

Admin Keys (has been deprecated)

• Has used (30-11-2023) it's centralized powers to delete tx batches or state roots 8 times (!).
• zkSync Era got scored lower than zkSync Lite (the previous version) by L2beat (27-3-2023). There is no mechanism for users to escape censorship if the sequencer decides to do so. The code can also be changed without notice. According to Bankless (3-2023):

" zkSync Era is set to evolve further. For example, the L2 is currently centralized in how it is maintained, but it’s set to be “transitioned to a decentralized system shortly” the zkSync team has said."

• From L2beat (13-10-2022) on zkSync:

"ZK-SNARKs require a trusted setup to operate. The system has a centralized operator. The operator is the only entity that can propose blocks. A live and trustworthy operator is vital to the health of the system. Force exit allows the users to escape censorship by withdrawing their funds. The system allows users to force the withdrawal of funds by submitting a request directly to the contract on-chain. The request must be served within a defined time period. If this does not happen, the system will halt regular operation and permit trustless withdrawal of funds. If enough time passes and the forced exit is still ignored the user can put the system into Exodus Mode, disallowing further state updates. In that case everybody can withdraw by submitting a zero knowledge proof of their funds with their L1 transaction.

The system uses the following set of permissioned addresses:

1. zkSync MultiSig 0xE24f…0d99 (MultiSig) This MultiSig is the master of Upgrade Gatekeeper contract, which is allowed to perform upgrades for Governance, Verifier and ZkSync contracts. It can change the list of active validators.
2. MultiSig participants0xA5F3…b0FF (EOA), 0x474D…53D4 (EOA), 0x9D5d…f607 (EOA), 0x9dF8…747A (EOA), 0x3068…d2Bc (EOA), 0xa265…6769 (EOA) These addresses are the participants of the 3/6 zkSync MultiSig.
3. Security Council0xa260…1769 (EOA), 0x9D5d…f607 (EOA), 0x002A…7346 (EOA), 0x71E8…88c3 (EOA), 0x76C6…cB11 (EOA), 0xFBfF…3190 (EOA), 0xAfC2…c0d6 (EOA), 0x4d1E…38C6 (EOA), 0x19eD…8567 (EOA), 0x3941…e1b6 (EOA), 0x399a…52C2 (EOA), 0xee8A…5eaB (EOA), 0xe7CC…231f (EOA), 0xA093…e33B (EOA), 0x225d…086e (EOA) By default upgradeable contracts can be upgraded only after 3 weeks period. Security council can vote to cut this period to 0 days making the upgrade possible immediately if at least 9 out of 15 counselors agree on this.
4. Active validator 0x01c3…F91e (EOA) This actor is allowed to propose, revert and execute L2 blocks on L1.
5. Token listing beneficiary 0x2A0a…d027 (EOA) Account receiving fees for listing tokens. Can be updated by zkSync MultiSig."

Token

Launch

• Token airdrop scheduled for mid-June, with governance capabilities (11-6-2024).
• Token got confirmed on 3-5-2022. But (16-11-2022):

“We are not in a hurry to do the token,” Newcomb told Decrypt. “There’s a trilemma that exists in decentralization: the trilemma of decentralizing your organization, decentralizing your technology, and decentralizing your economy. The token is only one part of this. And we want to make sure we handle that trilemma really, really well.”

• zkSync hasn’t launched a native token yet, but the L2’s roadmap explicitly mentions tokenomics so it’s clear such a token is forthcoming:

“There is no need for a token at this point. The token will be required once you want to decentralize the sequencer. Everything has to have its objective and justification. In order to have permissionless participation in the validator set, we don't have anything better than a token right now — like how you make it permissionless. But for now, since we are on this sequencer, it's not yet necessary,” said Gluchowski. He estimated that the sequencer will be decentralized in around a year's time.

Utility

• From their docs (3-5-2022):

"When zkSync becomes fully decentralized, the token will be used for staking in order to become a validator in the zkSync network. More details to come."

Tech of zkSync L2s

• There will be two distinct zkSync L2s: zkSync Lite and zkSync Era (3-2023).
• zkSync docs can be found here.
• Code for zkSync can be viewed here. The team announced (16-11-2022) that it would be open-sourcing all of its code, too, as per the MIT Open Source Initiative.
• Built on: L2 on Ethereum
• zkSync Era is a zkEVM
• Programming language used in zkSync Lite: Solidity, has SDKs in JavaScript, Python, Go and Java (31-10-2022).
• They don’t use Geth. Instead, they built a full client from scratch in Rust, which is more performant.

Transaction Details

• From Bankless (18-11-2021):

"The highest capacity measured so far was during a Gitcoin grants round that saw a peak load of 20,000 transactions per hour—5.6 TPS. Though it is a significant amount less than the 18,000 transfers demonstrated by StarkEx, it was sustained for an entire hour."

• Latency:

How it works

Key Features of the Elastic Chain (from Messari 8-7-2024):

1. "Unification: Users can use one address across all ZK Chains, transact with a single signature, and pay fees in any token.
2. Security: The ZK Gateway leverages Ethereum's cryptographic verification, eliminating the need for third-party bridges, and ensuring secure transactions between different ZK Chains.  
3. Scalability: The chain can grow without increasing transaction costs, allowing for more chains and higher capacity.
4. Elastic Validation: The chain validates transactions within a fixed timeframe, regardless of complexity, mirroring the economic concept of elasticity by scaling supply to meet rising demand."

• From L2beat (13-10-2022) on zkSync:

"Each update to the system state must be accompanied by a ZK Proof that ensures that the new state was derived by correctly applying a series of valid user transactions to the previous state. Once the proof is processed on the Ethereum blockchain the L2 block is instantly finalized. All the data that is used to construct the system state is published on chain in the form of cheap calldata. This ensures that it will always be available when needed."

• From CoinDesk (5-12-2019):

"Funds move between users inside the smart contract, which is orchestrated by validators and guardians. When a contract is open, validators package transactions into blocks. Elected by guardians, validators have a near-perfect probabilistic guarantee of participating honestly with safety features such as built-in collateral (to disincentivize cheating). Users also decide when a contract closes, sending funds back to the main ethereum chain."

Upgrades

• In February 2023, Matter Labs renamed zkSync 2.0 to “zkSync Era,” rebranding zkSync 1.0 to “zkSync Lite” in the process, and began the Fair Onboarding period of its Era alpha so that registered projects could start launching on the L2. Finally on March 24, 2023, the zkSync Era mainnet alpha was launched.
• zkSync v2.0 deployed for the team; apps will be able to deploy later this year, opens to users next year (29-10-2022).
• From Our Network (23-4-2022):

"Matter Labs team has been focused on building zkSync 2.0, which has been live on testnet since Feb 2022. Powered by zkEVM, zkSync 2.0 is the first EVM compatible ZK rollup bringing Solidity developers the scaling, security and UX benefits of zero knowledge proofs."

Oracle Method

• Redstone is the first Oracle on zkSync (22-5-2023).
• zkSync will integrate with Chainlink (11-11-2021).

Their Projects

zkPorter

• Will join zkSync Era (3-2023):

"Additionally, in the future the L2 will be extended by zkPorter, a novel volition system that can facilitate up to ~20,000 transactions per second (TPS) and will offer users the ability to switch between a ZK rollup mode and a validium mode at will."

• zkPorter is a new L2 scaling technique combining zkRollup and sharding in a highly scalable yet atomically composable blockchain network.

Usage

• From Our Network #45 (30-10-2020):

"Live with payment support since June 2020, zkSync has processed over 300,000 transactions in total. The Gitcoin grants round 7 was one big driver in transaction volume, starting on 15th September and ending on 2nd October. It is worth noting that there are no block rewards or delegations on the current zkSync network yet and therefore all 300,000 transactions represent real interactions between users. 1inch’s Mooniswap and Balancer are currently in the process of completing their integrations as well."

Projects that use it / build on top of it:

• Argent; plans to integrate it (16-3-2021).
• Curve implemented (11-10-2020) on zkSync’s Zinc VM, live on testnet.
• Gitcoin. Used by Gitcoin (11-9-2020).

Partners

• imToken has joined with Matter Labs to support zkSync (29-3-2021)

Roadmap

• Roadmap can be found here (27-3-2021).
• ZkSync is working on (29-10-2022) Layer 3 blockchain for Ethereum called Opportunity. The team plans to release a proof of concept in the first quarter of 2023. Opportunity will be an additional off-chain computation layer on zkSync's Layer 2 main network.
• From Coin98 (27-4-2022):

1. "December 2019: ZK Sync v0.1 Testnet
2. June 2020: Mainnet version of @zksync
3. August 2020: zkSync 1.1
4. May 2021: zkSync version 1.x
5. June 2021: zkEVM Testnet.
6. February 2022: zkSync 2.0 Public Testnet"

• Can be found here (3-5-2022).

Usage

• From Our Network (24-5-2024):

"Live on mainnet for now over one year, zkSync Era has amassed nearly $1B in TVL, more than 375M transactions, and nearly 7M unique active addresses. In just the last few months, the TVL contribution from natively minted tokens has grown to more than $75M."

• From Our Network (23-4-2022):

"zkSync 1.0 has processed over 7.3m transactions. Despite the lack of smart contract functionality, zkSync 1.0 continues to see healthy growth. There have been more than 378k transactions from ETH Mainnet to zkSync by more than 257k unique addresses. At time of writing, zkSync 1.0 currently has ~$132.4m TVL. TVL reached an all-time high in March 2022 of $163m."

Projects that use or built on it

• From Decrypt (16-11-2022):

“We have 150 launch partners,” Newcomb said. “We can include in that launch partner list Chainlink, SushiSwap, Uniswap, Maker, 1inch, Gnosis, and Wintermute."

• Curve, Aave, Balance, 1inch, Loopring (9-3-2021)

Pros and Cons

Cons

• Has used (30-11-2023) it's centralized powers to delete tx batches or state roots 8 times (!).

Team, Funding, Partners

Team

• Full team can be found [here].
• Developed by Matter Labs
• Alex Gluchowski; CEO
• Marco Cora; Head of BD (10-2023)
• In August 2022, Gluchowski published a blog post announcing Matter Labs’ new chief product officer, Steve Newcomb. In November, Gluchowski posted about the appointment of Ankur Rakshit as the company’s chief financial officer.
• Ryan Sean Adams and David Hoffman; disclosed themselves to be an advisor (28-4-2023)
• "We don't wanna grow beyond 150 people" (6-2023) Laid off 16% of their workforce (3-9-2024), 24%, meaning they grew beyond 150 people.

Funding

• Raised $200M in their Series C (16-11-2022):

"Blockchain Capital and Dragonfly co-led the Series C round and was joined by Variant, a16z, and LightSpeed Venture Partners."

• From Coin98 (27-4-2022):

1. September 2019: $2M from Hashed, Dragonfly Capital, etc.
2. February 2021: $6M from Binance, Coinbase Ventures, etc.
3. November 2021: $50M from a16z, etc.
4. January 2022: a $200M DAO to fund projects on @zksync

• From their blog (8-11-2021):

"Announced US$50M in new funding today (in addition to US$6M raised at Series A in February this year).

The Series B financing was led by Andreessen Horowitz and included existing investors Placeholder, Dragonfly, and 1kx. A second financing was closed with strategic partners such as Blockchain.com, Crypto.com, Consensys, ByBit, OKEx, Alchemy, Covalent and joined by the founders and leadership of AAVE, Paraswap, Lido, Futureswap, Gnosis, Rarible, Aragon, Liquity, Celer, Connext, Perpetual, Euler, Opium, and 70 more."

• From their blog (1-3-2021):

"This [undisclosed amount] round is led by Union Square Ventures, Cloudflare, Firebase, Twilio, MongoDB, and Coinbase. It also includes our existing investors — Placeholder, 1kx, and Dragonfly — who have provided us with incredible support over the last two years."

Partners 

• Participated (9-2019) in the Ignition MPC ceremony for PLONK organized by AZTEC Protocol.

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