Metaversal is a Bankless newsletter for weekly level-ups on NFTs, virtual worlds, & collectibles
Dear Bankless Nation,
The NFT ecosystem has come far in a short amount of time.
But there’s no question that much of the infrastructure around NFTs remains nascent. What will help considerably is scaling solutions, which make Ethereum transactions instant and extremely inexpensive.
We’re all in luck too, because a major scaling innovation that was recently thought to be years away is now arriving in just a matter of months.
That solution is the zkEVM, the engine of the coming zkSync 2.0 system. Let’s dive into why the zkEVM matters and how its going to help NFT projects seriously level up starting this year!
Scaling NFTs, What to Do?
The vast majority of NFT activity today occurs on Ethereum. And so many people are now trying to use the platform at any given time (for DeFi, NFTs, what have you) that many Ethereum transactions have become acutely expensive and slow.
This naturally isn't great for NFT users in particular, so Ethereum needs to scale if it's going to capably power millions of global NFT transactions in the near future.
Rollups to the Rescue
Fortunately, for starters, the blooming Ethereum scaling ecosystem is making tremendous advances around layer-two (L2) rollups. These rollups are like advanced sidechains, except rather than securing themselves like independent blockchains they inherit all of Ethereum’s security assurances.
L2 transactions are super fast, super cheap, and super secure then. But while things are still so early, there are still unique limitations in the two main styles of rollups — optimistic rollups (ORUs) and zk-rollups (ZRUs) — that NFT projects have to contend with.
ORUs vs. ZRUs
ORUs are great for general computation, meaning NFT projects can readily port over their mainnet Ethereum contracts to ORU implementations. The downside currently? Early ORUs face long withdrawal periods, and no one wants to wait days to receive their NFTs. These withdrawal woes should be solved in the future via L3 solutions like Connext’s Vector, but they’re here for now.
As for ZRUs, they’re magical when it comes to instant and affordable transactions, and they don’t suffer long withdrawal periods. Their tradeoff right now? They don’t offer general computation, so it’s not easy as things stand for NFT projects to port their mainnet Ethereum code to ZRU implementations. The code has to be rebuilt on L2, which is obviously more of an involved process.
The good news? Just like how ORU withdrawal periods will get solved with things like Vector, general computation will eventually make its way to ZRUs. Until recently it seemed this capability was still years away, though, in fact it’s coming much sooner. Like, months from now soon-ish.
The zkEVM Is Coming!
Built by Matter Labs, zkSync is Ethereum’s leading zk-rollup project to date. And the zkSync team is raising the bar again with their coming 2.0 upgrade, which they’re underpinning with what’s called the zkEVM.
Simply put, the zkEVM is special because it combines the speed and power of ZRU tech with the capability of general computation. For NFT projects, this means you’ll be able to easily port over your code to L2 and users will keep their existing Ethereum addresses. Fast and cheap transactions, no withdrawal periods, no code rebuilds. It’ll feel just like using or building on Ethereum but with better UX!
Accordingly, the zkEVM is going to be a game changer for NFT projects, who are gaining more users than ever before right now and need scalability stat.
The amazing thing, then? We’re not going to have to wait years for the zkEVM like we previously thought. Per zkSync’s latest announcement, their 2.0 system is slated to have a live testnet in May 2021 and then hit mainnet in August 2021!
This is great news for NFT projects, as an extremely viable and promising scaling solution is now just around the corner.
And while we won’t have to wait much longer for the power of the zkEVM, the zkSync team is going to make things easier for NFT users in the meantime by supporting “native minting, transfers, and atomic swaps of NFTs” on the zkSync 1.x system starting next month.
Keep an eye on the NFT + ZRU space, then. Big things are coming, things that are going to help us take NFTs truly mainstream.
📰 Read “An Incomplete Guide to Rollups” by Ethereum creator Vitalik Buterin
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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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