ZkSync: Scalability & Low Costs

Basic Information

  • Token name: TBA (potentially $ZKS).

Features

  • Mainnet-level security with zero reliance on 3rd parties

Comparables

Figure 1: Compare zkRollup with Other Layer 2 Solutions, Source: Greythorn Asset Management, Data: Matter Labs

Bullish Fundamentals

1. Vitalik is LT bullish — In general, my own view is that in the short term, optimistic rollups are likely to win out for general-purpose EVM computation and ZK rollups are likely to win out for simple payments, exchange and other application-specific use cases, but in the medium to long term ZK rollups will win out in all use cases as ZK-SNARK technology improves.

2. Offers more features compared to Polygon & StarkWare.

Figure 2: zkSync vs Scroll, Polygon & StarkWare, Source: Greythorn Asset Management, Data: zkSync

3. A significant portion of token supply may be staked, reducing circulating supply primarily as it will be required to become a validator on the network.

4. Gas fees can be payable on multiple tokens.

5. Addresses scaling issues, high txn fees all while maintaining ETH’s security & privacy.

6. Considerable number of dApps built on zkSync, including 1inch, Multichain, Sushi, Frax, Maker, Binance Wallet, OKX Wallet. See all here: https://ecosystem.zksync.io/

7. Can potentially achieve VISA-scale throughput.

Figure 2: zkSync vs Scroll, Polygon & StarkWare, Source: GreythoFigure 3: Cryptocurrencies Transaction Speeds Compared to Visa & Paypal, Source: Greythorn Asset Management, Data: HowMuch.net

Bearish Fundamentals

1. The consensus mechanism security of zkSync is compromised by consensus networks, such as practical Byzantine fault tolerance (pBFT) and delegated proof-of-stake (DPoS), that are adopted for faster speed block production and transaction finality and the speed of layer-2 networks is arguably enhanced however, falls back short in solving the decentralisation issue in the Blockchain Trilemma.

2. The general support of an ever changing EVM landscape roots zkSync in rocky grounds as functionalities and EVM code may change, which is a pain point to the project and may cause developmental set-backs if technology stacks are not compatible, especially in terms of generating validation proofs and transaction processing.

3. At this time, zkSync is solely run and operated by the zkSync team’s servers and is therefore centralized. However, this will be transitioned to a decentralized system in the future.

Important notice and disclaimer

This presentation has been prepared by Greythorn Asset Management Pty Ltd (ABN 96 621 995 659) (Greythorn). The information in this presentation should be regarded as general information only rather than investment advice and financial advice. It is not an advertisement nor is it a solicitation or an offer to buy or sell any financial instruments or to participate in any particular trading strategy. In preparing this document Greythorn did not take into account the investment objectives, financial circumstance or particular needs of any recipient who receives or reads it. Before making any investment decisions, recipients of this presentation should consider their own personal circumstances and seek professional advice from their accountant, lawyer or other professional adviser.

This presentation contains statements, opinions, projections, forecasts and other material (forward looking statements), based on various assumptions. Greythorn is not obliged to update the information. Those assumptions may or may not prove to be correct. None of Greythorn, its officers, employees, agents, advisers or any other person named in this presentation makes any representation as to the accuracy or likelihood of fulfilment of any forward looking statements or any of the assumptions upon which they are based.

Greythorn and its officers, employees, agents and advisers give no warranty, representation or guarantee as to the accuracy, completeness or reliability of the information contained in this presentation. None of Greythorn and its officers, employees, agents and advisers accept, to the extent permitted by law, responsibility for any loss, claim, damages, costs or expenses arising out of, or in connection with, the information contained in this presentation.

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