Ethereum (ETH) L2 Rollup zkSync is Launching a Token! Learn Now and Benefit Later This Year

By Michael @ CryptoEQ | CryptoEQ | 31 Jan 2022


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zkSync and Matter Labs

zkSync is a ZK-rollup by Matter Labs (started in 2019) where users can deposit ETH onto the network and send payments between other zkSync accounts for much lower transaction fees. It is a standard L2 ZK-rollup scaling solution, in the sense that all funds are held by a smart contract on Ethereum mainnet, computation and storage are performed off-chain, and every batched/rollup block generates a zero-knowledge proof which is verified by L1. This methodology, paired with the power of SNARKS, means ZkSync is unable to move or steal funds and is easier to integrate for EVM compatibility. 

However, because zkSync uses SNARKs (PLONK especially), it’s slower than its STARK counterpart used by Starkware and is reliant on a trusted setup at genesis. That means the entirety of the zkSync ecosystem is dependent upon a trusted ceremony conducted in 2019. The good news is the system is 100% provably secure if even just one participant was honest. The ceremony included many well-known and public crypto figures that are in their best interest for zkSync to succeed. Therefore, it’s likely this trusted setup is not an issue and was not compromised. 

ZkSync launched its V1 in June 2020, with the only use case being for simple token transfers. 

At a high-level, the architecture of zkSync can be represented by a system that involves a server, a prover and a verifier. The server and prover run on L2 while the verifier exists on L1 as shown below.



However, in April 2021, the ZkSync team announced zkSync 2.0 and its zkPorter technology which aims to provide ~$0.01 transactions by moving transaction data off-chain (Validium style) and offering 20K transactions per second (TPS). It boasts a sharded infrastructure design that interoperates seamlessly with the ZK-rollup of ZkSync. 

zkSync 2.0 is another L2 rollup that supports EVM programming languages like Solidity, Yul, and Vyper, and in the future Rust and Zinc (2022). This means developers can easily deploy EVM code (Ethereum L1) onto zkSync 2.0, and for users, zkSync 2.0 offers instant withdrawals and objective finality limited only by batch frequency. 


Source: Delphi Digital


zkPorter will be part of the ultimate zkSync 2.0 vision. With zkSync 2.0, the L2 state will be divided into two distinct options: a zk-Rollup with on-chain data availability, and the zkPorter option with off-chain data availability.

zkPorter is the internal consensus mechanism for data availability within zkSync 2.0, enabling the large TPS numbers. zkSync 2.0 can handle ~1,000 to 5,000 TPS as a standard ZKRU, but with zkPorter it can accommodate ~20,000 to 100,000 TPS (depending on the complexity of each transaction). However, it should be noted that, when utilizing zkPorter, the user is relying on zkSync's internal consensus mechanism. This requires the user to place their trust in Matter Labs and rely on a far less secure or decentralized rollup solution that leverages L1’s consensus mechanism. 

The good news is that users are able to choose either option based on their preferences and the trade-offs presented. zkPorter will offer negligible cost but lower security for trivial transactions and the ZK-rollup mode offers maximum security. Both parts will be composable and interoperable: contracts and accounts on the zk-Rollup side will be able to seamlessly interact with accounts on the zkPorter side and vice versa. 


The primary difference between zkPorter and Starkware’s Volition is that a user must choose with each zkPorter account whether to produce transactions with off-chain data availability, while in Volition, a user can choose for each transaction within an account.

As of Q1 2022, zkSync has processed over 4 million transactions with transfers fees less than ~$1. Despite being fairly new, users began moving funds over to ZK-rollup projects like Loopring and zkSync in 2021, especially in Q4 as the chart below illustrates. By November 2021, unique users increased by ~90,000 and deposits eclipsed ~$75 million. For zkSync, the wave of adoption can be contributed to its top projects ZigZag Exchange and Gitcoin, a crowd-funding platform. According to L2fees, token swaps through ZigZag on zkSync have the lowest fees.




In October 2021, a closed testnet for zkSync 2.0 launched with Curve Finance as the only initial dApp being trialed. However, UniSync, a fork of Uniswap v2, is currently on a testnet to trial zero-knowledge, general-purpose, EMV-compatible functionality.

In November 2021, Matter Labs raised $50M in new Series B funding to build out the zkSync infrastructure. Leading the round was a16z and included existing investors Placeholder, Dragonfly, and 1kx. A second financing round was closed with strategic partners such as,, Consensys, ByBit, and Covalent. The raise built on a previous $6M Series A round in Feb. 2021. 

In true crypto fashion, in January 2022, BitDAO and Matter Labs established zkDAO, a $200M DAO dedicated to growing the zkSync ecosystem. According to the proposal, 70% of the funds were allocated towards strategic growth, 10% for research and education, 7.5% for grants, 7.5% to security/audits, and 5% to operations.

zkSync remains dedicated to continuing its product development and hitting future milestones like:

  • V2: A big focus for zkSync is delivering its V2, however, no mainnet launch date has been set.
  • Exchange support: Expect easier onboarding once zkSync 2.0 has launched. OKEx and Huobi have signaled an intent to support direct deposits and withdrawals.
  • Decentralization: Currently there is strong centralization with the security council. Look for the Team to decentralize the security council eventually, perhaps with a future governance token (airdrop). zkSync has stated there will be a token in the future. 

However, it should be noted that the current state of zkSync is highly centralized. Although the zkSync multi-signers have q shared economic interests in the success of the project, contracts can be upgraded anytime via the 9/15 multi-sig. Matter Labs claims “the probability of bugs is significantly higher than a malicious collusion between the Matter Labs team and 9/15 members of the security council”.





Less data contained in each transactions increases throughput and decreases fees

No withdrawal periods and faster finality 

Inherent (and cheap) privacy 



Generalized smart contract support (similar to StarkNet) not live or production ready

Initial trusted setup ceremony scares some, introduces trust

New, less battle-tested cryptography 




zkSync applications






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Michael @ CryptoEQ
Michael @ CryptoEQ

I am a Co-Founder and Lead Analyst at CryptoEQ. Gain the market insights you need to grow your cryptocurrency portfolio. Our team's supportive and interactive approach helps you refine your crypto investing and trading strategies.


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