Deutsche Bank, Germany's largest bank, has revealed its Ethereum Layer 2, dubbed Project Dama 2, which is currently in the pilot phase.

This tool offers cheaper and more efficient transactions. This layer 2 was built using ZKsync technology, and its official launch is expected to occur in 2025.

ZKsync is a second-layer scaling technology for Ethereum that uses Zero-Knowledge Proofs (ZK) to enable fast and cheap transactions without compromising the security or decentralization of the Ethereum mainnet.

With ZKsync, transactions are processed off the mainnet and then consolidated into a single transaction on Ethereum, significantly reducing gas costs and increasing processing speed , while maintaining user privacy as zero-knowledge proofs allow the validity of transactions to be verified without revealing the underlying details.

In general, this is one of the technologies that rollups use to reduce costs and make transactions more private.

Boon-Hiong Chan, head of applied industry innovation for Asia-Pacific at Deutsche Bank, explained that Layer 2 connects to Ethereum, which he called “the busiest commercial highway in cryptocurrencies,” Bloomberg reports.

This approach allows banks to avoid the risks associated with public networks, such as Bitcoin and Ethereum, which are freely usable. “By using two chains, several regulatory concerns should be able to be satisfied,” Chan said.

Project Dama 2 is part of the Monetary Authority of Singapore's Project Guardian, an initiative in which 24 major financial institutions are exploring ways to use Bitcoin 's inherent technology to tokenize assets.

As explained in the announcement, the second-layer network was born after a collaboration with cryptocurrency companies Memento Blockchain Pte. and Interop Labs.

According to Chan, Layer 2 will allow for the creation of a “more personalized list of validators,” who process digital asset transactions in exchange for rewards. Another significant advantage is the possibility of granting regulators, and only them, “super administrator rights,” making it easier to oversee fund movements when necessary.

This is not Deutsche Bank's first step into the cryptocurrency ecosystem and the technology behind it. Last July, the bank announced its intention to enter the euro stablecoin race, planning to launch a new stablecoin in 2025.