How to use zkSync
5 opportunities to use the next generation of Layer 2s and avoid high gas fees
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Dear Bankless Nation,
We’re bullish on modular blockchains.
It’s how Ethereum will scale to millions of users while maintaining cheap transaction fees. Importantly, we believe this thesis will be a big narrative this year.
Layer 2s (L2) are the backbone of modular blockchains. Polygon, Immutable, Starkware, Optimism, Arbitrum, Aztec, and others will play a crucial role as this thesis unfolds.
It’s also one of Ryan’s big predictions for the year, dubbed L2’22. (Bankless 2022 Predictions drops on Thursday!)
If 2022 is indeed the year of Layer 2s, there’s a big opportunity to capitalize on.
They have an interesting design feature whereby the more transactions processed, the cheaper they are. It flips the blockchain trilemma on its head.
One of the leaders in zkRollups is zkSync. They’re in the early phases, but it’s extremely likely it’ll hit full production on mainnet soon.™️
There’s a key phrase in the tweet above: zkSync will be community-owned.
Now’s the time to get ahead.
William shows you how with 5 opportunities.
P.S. Ryan is out for the count as he tries to survive a winter storm. Might be ngmi.
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5 opportunities to use zkSync
zkSync is one of Ethereum’s most promising scaling solutions leveraging zkRollup technology. With the crypto-economy trending toward rollups and zkSync’s pivot to decentralized governance on the horizon, the time’s ripe to take this on-the-rise L2 for a spin.
This Bankless tactic will show you a handful of projects you can try on zkSync today.
Goal: Learn 5 different ways to use zkSync
ROI: Building out your crypto skill tree + future token airdrop
Welcome to zkSync
zkSync is a layer 2 (L2) scaling solution designed to make Ethereum transactions inexpensive and near-instant.
Built by Matter Labs, zkSync belongs to a class of L2s known as zkRollups. This means zkSync uses “zero-knowledge” cryptographic proofs to efficiently batch and validate Ethereum transactions by zkSync posting data batches “on-chain” to Ethereum while executing transactions externally to the Ethereum base layer. (modular design at work!)
The zkRollup design leads to something pretty magical, which is that, through network effects, zkSync becomes more inexpensive for users as activity on its network increases. That reality stands in stark contrast to traditional blockchains, which become more expensive when demand for their blockspace grows. As such, you can see why a resource like zkSync is so promising as a prospect to scale Ethereum!
Today, zkSync is the 10th largest L2 per total value locked with a $71M TVL according to analytics site L2BEAT. That number is poised to grow as zkSync continues to advance in features and functionalities and more users start migrating to zkRollups for better UX and cheaper transactions.
The coming zkSync token will also undoubtedly attract more liquidity and utility to zkSync. However, Matter Labs has said they will be deliberate and steady with the token’s release, so it may still be many months away.
In the meantime, we can start getting L2 experience and preparing for the future by using zkSync in the here and now. There are no guarantees any of this will make you money. But being on the frontier is always rewarding.
Here are 5 possible opportunities to consider!
Argent is the leading social recovery wallet. It lets you pick out “guardians” who, if you were ever to lose access to your wallet’s signing key, can help you update to a new key and maintain your wallet indefinitely.
This sort of system is ideal for crypto novices and veterans alike since it affords users robust security and more flexibility compared to traditional crypto wallet offerings.
That said, Argent offers a glimpse at the future of crypto wallets. Doubly so because it’s wedded its social recovery system with very fast and low-cost L2 execution power using zkSync.
Therefore if you want to try out zkSync, I think Argent is a wonderful user-friendly gateway to start with.
How to create a zkSync wallet via Argent
Whenever you create an Argent wallet or open up an existing one, you’re now presented with both an L1 Ethereum account (i.e. the “Argent Vault”) and a zkSync account, so the first move is funding your zkSync account.
At this point, you can just go straight to L2. You don’t have to send assets to L1 or pay an expensive L1 activation fee, just the $2.50 zkSync account set-up fee. Of course, it’s totally possible to create and prepare your L1 Argent Vault first, but you can probably save +$100 on fees by just depositing straight to zkSync.
You can do so by pressing the “Receive” button in your zkSync account, at which point you can buy crypto via Ramp or receive funds from another Ethereum wallet or zkSync wallet. Carry through with your preferred process and your zkSync account on Argent will be funded.
Now you’re ready to explore the early in-app L2 investment and staking opportunities, e.g. Yearn vaults or ETH staking via Lido.
Press “Invest” to see the available options and you’re off to the races.
ZigZag Exchange is a decentralized orderbook exchange that has quickly made a name for itself as the first DEX live on zkSync. Accordingly, if you’re looking to trade on zkSync in these early days, then ZigZag’s the center of action for now.
⚠️ Warning! the exchange is currently unaudited. Tread carefully!
While it’s early, the upstart has a lot of things going for it, like a native bridge UI, fast withdrawals to Ethereum, limit orders, and a fiat on-ramp through Banxa. Additionally, the project is working on permissionless pair listings, an NFT marketplace, and more.
If you’re interested in trying ZigZag but feel overwhelmed by the order book UI, consider trying out the exchange’s new Argent integration.
If you set up a zkSync account in Argent, you can press the “Trade” button and enjoy a streamlined UI for making trades through ZigZag. The assets currently supported include ETH, DAI, FRAX, USDC, USDT, and WBTC.
Each quarter Gitcoin hosts Gitcoin Grants, a donation-driven event where Ethereum community members can donate and fund open-source Web3 projects. The unique part about Gitcoin is that all donations get matched through a quadratic funding (QF) format.
Over the past few years, Gitcoin Grants have proven to be a tremendous and collective force for good, yet the program is also notable because it’s supported donations made through zkSync since 2020. How about that for early zkRollups support!
If you want to make a donation to a project via Gitcoin, you can do it any time instead of waiting for the next Gitcoin Grants round (there’s no quadratic funding though).
Just head to Gitcoin, press “Add to Cart” on your desired project(s), and when you’re ready for the checkout process opt for the “Checkout with zkSync” option and follow through with the on-screen instructions.
✏️ Note that for now you’ll first have to set up a wallet through the main zkSync website if you want to make L2 Gitcoin donations!
If you create a wallet through the main zkSync website, another application you can experiment with is the NFT platform zkNFT.
Created by Sudoswap creator 0xmons, zkNFT is a proof-of-concept alpha release so approach the platform like it’s an experiment. Yet at the same time, zkNFT does a great job of highlighting how zkSync’s early NFT API works, thus we can look to it to get an early feel for zkSync’s young NFT scene.
The platform lets you affordably mint, manage, and swap zkSync NFTs. The Mint dashboard is where you’d finalize your token metadata, after which the media gets pinned to IPFS through the nft.storage project.
Before diving in here just keep in mind that zkSync NFTs have unique nuances, e.g. becoming “final” hours after minting. 0xmons does a great job outlining some of the main nuances in this zkNFT intro post, so make sure you understand the big ideas here to avoid confusion.
LayerSwap is a platform that makes it easy and affordable to bridge crypto to zkSync from centralized exchanges (CEXes).
Under the hood, LayerSwap makes use of the fact that transactions between CEX accounts are free and instant for many venues. Alas, as soon as LayerSwap receives your transaction to one of their accounts they use L2 liquidity pools to quickly and inexpensively credit you your funds on zkSync.
For now, the assets supported include ETH and USDT while the CEXes supported include Binance, Coinbase, FTX, Huobi, KuCoin, and OKEx.
Please note that LayerSwap’s liquidity can only facilitate transfers up to 0.15 ETH at this point though that limit should be lifted over time, especially if the project follows through with its liquidity mining plans!
The crypto economy is trending towards zkRollups. They hold tremendous promise, and in the years ahead will help bring Ethereum-based transactions to millions, even billions, of users.
While it’s clear the zkRollup ecosystem is still in its earliest days, it’s also clear that zkSync is a bright early star in that scene that’s demonstrating the beginnings of what zkRollups can do in the wild. And yes, zkSync is poised to evolve considerably from here, so the magic’s truly just starting.
I do want to stress and underline that at this point in time zkSync is an experimental work-in-progress. Dapps like ZigZag and zkNFT are experimental. It’s extremely early. There are non-trivial risks and frictions, so you shouldn’t go aping in with non-trivial sums yet.
That said, I do recommend tinkering with some of these projects in a measured fashion where and when you can. First, zkSync is empowering tech aligned with crypto’s best values and is worth supporting for that reason alone. Secondly, it’s important to keep building out your personal crypto skill tree as the space is trending toward rollups. Getting experience with zkSync now will give you experiences you’ll lean on for years to come here.
Then there’s also the coming zkSync token, of course, which the L2’s creators have made no secret is imminent. Become a community member now, support a compelling project in the process, and later help guide its future once you’re armed with governance tokens.
Welcome to L2 ‘22, ladies and gents, zkRollup style.
Create a zkSync wallet
Try zkSync apps!
Read The best comparison on zkRollups today by Bankless
William M. Peaster is a professional writer and creator of Metaversal—a new Bankless newsletter focused on the emergence of NFTs in the cryptoeconomy. He’s also recently been contributing content to Bankless, DeFi Pulse, JPG, and beyond!
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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.
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