What is zkSync? Guide to Ethereum Scaling Solution 

What is zk-Sync?

Zk-Sync is a trustless layer-2 scaling solution that utilizes cryptographic ZK proofs to offer increased throughput and low-cost transactions on the Ethereum blockchain. It basically takes transactions off the mainchain, computes and stores most data off-chain (on layer-2), and only records processed data on the Ethereum mainnet. This way, it reduces the load on the underlying Ethereum network- providing enhanced scalability with the same level of security.

Matter Labs– the team behind zkSync, was co-founded by Alex Gluchowski and Alex Vlasov in 2018. They began development of the project in 2019 and launched the first version ZkSync 1.0, in June 2020. zkSync 1.0 successfully delivered fast and cheap transactions, but it lacked the support for EVM smart contracts. Later in October 2022, the team launched the second iteration- zkSync 2.0 with significant improvements, including support for EVM compatibility and ZK smart contracts. The layer-2 protocol currently offers zkSync lite (formerly zkSync1.0) and the latest zkSync 2.0, which has been rebranded as zkSync Era.

Read More: Complete Guide to Ethereum Layer 2 Solutions

How does zk-Sync work?

Before diving into how zk-sync helps scale Ethereum transactions, let’s understand ZK technology. ZK proofs, short for zero-knowledge proofs- is a type of cryptographic method where one party proves the validity of a statement to the verifier party without revealing any information (except for the statement). 

Zk-Sync Era is based on the concept of the ZK-rollups scaling technique. It performs computation on transactions off-chain and then consolidates or rolls those transactions into a single batch. Next, the ZK rollup operator generates a zero-knowledge proof of validity for every batch and submits it to the Ethereum mainnet. The Ethereum nodes only need to verify the proof for the correctness of the batch of transactions instead of processing each individual transaction- thereby significantly reducing the load on the Ethereum network. Zk-Sync uses SNARK zero-knowledge proofs, which are more efficient, cheaper, and require less storage than other Zk-proofs. However, the current implementation of Zk-rollups is constrained to specific transactions and lacks compatibility with Ethereum virtual machines and smart contracts. 

Zk-Sync Era has developed future-proof zkEVM, which is EVM compatible and supports zero-knowledge technology. zkSync zero-knowledge EVM uses LLVM compilers with EVM languages like Solidity, Vyper, and Yul to run custom Zk virtual machines. This enables developers to migrate Ethereum smart contracts and applications rather than recreating the entire code.

Benefits of zkSync

• Hyper Scalability: zkSync significantly enhances the scalability of the Ethereum network, improving its transaction throughput from 14 TPS to over 2000 TPS. Its zk-rollup technology rolls many transactions into a single batch, verifying several transactions in one go.
• Low-Cost Transactions: It processes transactions off the mainnet and sends them in batches for validation on Ethereum, eliminating the need for gas fee payment with every transaction. This makes zkSync transactions much cheaper than on-chain transactions and enables microtransactions previously hindered by high gas fees.
• Mitigate Network Congestion: zkSync’s off-chain processing also helps in mitigating network congestion issues of Ethereum, giving users with faster transaction confirmation times and a seamless experience.
• Secure and Trustless Transactions: With zkSync’s ZK proof-based approach, users can confidently engage in transactions, knowing that their funds are secure and the system is resilient against malicious actors. The zero-knowledge proof allows the validation of transactions without revealing any sensitive information, thereby preserving the privacy and security of user information.

Challenges of zkSync

• Consensus Mechanism Security and Centralization: zkSync uses Byzantine fault tolerance (pBFT) and delegated proof-of-stake (DPoS) consensus for faster transaction speeds. But these mechanisms can introduce centralization risks to the system, undermining the trustless nature and security guarantees of zk-Rollups. 
• Wallet and Exchange Support: While some major wallets and exchanges support layer-2 networks like zkSync, they may not be synchronized. This might lead users to mistakenly send transactions intended for exchanges to the layer-2 network, resulting in potential irretrievable loss of funds if the transaction isn’t recognized on the layer-2 network.

Additional Read: Top Zero-Knowledge Rollup Tokens 2023

Use cases of zk-Sync

• Fast and Low-cost transactions: Users can benefit from faster and cheaper transactions, including microtransactions with zkSync, as it processes transactions off-chain and relays them to record on Ethereum mainnet.
• DeFi applications: DeFi protocols need to process a large number of transactions, which leads to high gas fees. Zk-sync helps mitigate this issue, offering users a better experience and making token transfers, trading, and yield farming more affordable.
• Decentralized Exchanges: DEXs often face scalability issues on Ethereum- higher transaction fees and slow trade confirmation. zkSync reduces gas costs and improves throughput and liquidity for better performance of DEXs. Some DEXs built on Zk-sync include Curve, Zig-Zag, etc.

Conclusion

In conclusion, Zk-sync layer-2 has positively resolved the’s scalability issues of Ethereum. Till Ethereum is working on its scalability issues and version 2.0 upgrades, these layer-2 scaling solutions can improve its performance, giving steady growth and development. Zk-sync’s zero-knowledge roll-up technology and recent zk-sync Era version offer more efficient, seamless, and cheaper transactions with EVM compatibility for dApp development, making it one of the promising zk-based solutions for Ethereum scaling.