Exploring Layer2 solution zkLink

What is zkLink?

zkLink is an innovative Cross-Chain Interaction Layer 2 infrastructure based on Zero-Knowledge Proof (ZKRollup) technology, designed to address the fragmentation of Liquidity and the complexity of Cross-Chain Interaction transactions in the blockchain ecosystem. Through zkLink, users can seamlessly transfer assets across multiple blockchains and Layer 2 networks (such as Ethereum, Arbitrum, and zkSync), eliminating the reliance on traditional Cross-Chain Interaction bridges. The core technology ZKRollup ensures transaction security and simplifies the deployment of dApps through Cross-Chain Interaction state synchronization, significantly reducing Transaction Cost.

The architecture of zkLink allows multiple blockchain networks (including Ethereum and BSC) to achieve liquidity aggregation. ZKRollup technology protects the integrity of off-chain computations through Zero-Knowledge Proofs, greatly improving transaction efficiency and dropping the complexity of cross-chain interaction operations, maximizing liquidity utilization. Compared to traditional cross-chain interaction bridges, zkLink provides a more secure and decentralized solution, ensuring the immutability of transaction data and eliminating fund risks. Its Oracle Machine network further simplifies cross-chain interaction logic and optimizes interoperability between different chains.

Furthermore, zkLink's multi-chain Settlement solutions (such as Nexus and Origin) enable efficient Cross-Chain Interaction for Decentralization applications (such as Decentralized Exchanges and Non-fungible Token markets) by integrating Liquidity from different on-chain sources. zkLink has also introduced zkLink Nova, a Layer 3 aggregation network that connects Ethereum and its Layer 2 networks, enabling unified Liquidity management and higher interoperability. This architecture greatly addresses the issue of Liquidity fragmentation, further reducing the complexity and cost of operations, and laying a solid foundation for the scalability of the blockchain ecosystem.

Why do we need zkLink?

With the rapid development of blockchain technology, multiple blockchains (L1) and Layer 2 networks (such as Arbitrum, zkSync, etc.) are emerging, forming a complex multi-chain ecosystem. However, this multi-chain landscape also brings challenges of fragmented Liquidity and Cross-Chain Interaction transactions. When users transfer assets between different chains, they often face high transaction fees, latency, and complex operation processes. In addition, traditional Cross-Chain Interaction bridge solutions have been controversial due to security issues and asset custody risks. These problems hinder the widespread adoption of Decentralized Finance (DeFi) and Cross-Chain Interaction applications. zkLink simplifies the Cross-Chain Interaction transaction process, reduces operational complexity, and provides users with a more efficient and secure experience in transferring assets across chains through an innovative solution based on ZKRollup.

In the past, the process of operating Tokens between different blockchains was both complex and costly. For example, if you want to exchange TokenA on chain A for TokenB on chain B through a Decentralization Exchange (DEX), you usually need to go through multiple steps and pay multiple fees. First, users need to install a wallet and purchase gasToken for chain B; then, users must exchange TokenA for stablecoins or other intermediate Tokens that can be bridged to chain B; finally, on chain B, purchase TokenB through the local DEX. Although the emergence of various Cross-Chain Interaction asset bridge applications has simplified this process to some extent, the cost of Cross-Chain Interaction Token exchange is still high, making it difficult for users to achieve seamless Token interaction across chains at an affordable price.

By adopting a 'multi-chain' ZK-Rollup architecture, zkLink significantly differs from other Cross-Chain Interaction projects that rely on traditional Cross-Chain Interaction bridges. This is a key difference - most Cross-Chain Interaction solutions rely on transferring assets as wrapped Tokens for Cross-Chain Interaction, which may introduce security risks and efficiency issues. In contrast, zkLink allows users and developers to directly interact with native assets between multiple blockchains (L1) and Layer 2 networks (L2), greatly enhancing security and simplifying the operation process.

Use the Nexus solution of zkLink for multi-chain synchronization (Source: zkLink document)

Key Advantages of zkLink

Through ZKRollup technology, zkLink provides a multi-chain solution for Decentralization, which has the following advantages:

Security: Based on Zero-Knowledge Proof, zkLink ensures the immutability of transaction data, without relying on traditional cross-chain bridges, dropping the risk of fund theft.

Efficient Liquidity Aggregation: zkLink aggregates Liquidity from different blockchains and Layer 2 networks onto one platform, allowing users to seamlessly trade across multiple networks, greatly improving capital efficiency.

Low cost: The architecture of zkLink reduces the intermediate links of Cross-Chain Interaction transactions, drops Money Laundering, and improves the network's scalability through state synchronization and ZKRollup, reducing the computational resources required for on-chain verification.

Multi-chain interoperability: zkLink's multi-chain Settlement solution (such as Nexus and Origin) provides a more flexible Cross-Chain Interaction experience for decentralized applications (DEX, Non-fungible Token market, etc.), and eliminates the centralized risks commonly associated with traditional Cross-Chain Interaction bridges.

Practical Applications of zkLink

zkLink has been launched on the Mainnet, introducing its Layer 3 aggregation network zkLink Nova. Through this network, zkLink has achieved the integration of Liquidity on Ethereum and its Layer 2 networks, effectively solving the problem of Liquidity fragmentation. Since its launch in March 2024, zkLink Nova's total value locked (TVL) has rapidly exceeded 1 billion US dollars and has supported over 2 million transactions. In addition, zkLink has actively carried out user rise activities, launched the 'Aggregation Parade' reward program, further promoting the development of its ecosystem.

Technical Details of zkLink

The zkLink architecture consists of four main layers: the settlement layer, the execution layer, the ordering layer, and the data availability (DA) layer. Each layer is designed independently to achieve flexible and scalable Rollup deployment.

Official schematic diagram (Source: zkLink document)

Settlement Layer

zkLink's Settlement layer utilizes ZKRollup technology to ensure the security and integrity of multi-chain transactions.

Official schematic diagram (source: zkLink document)

zkLink provides two main Settlement solutions:

Nexus: Mainly used for Ethereum and its Layer 2 network, inheriting the security of Ethereum. Transactions are synchronized across multiple chains through ZKRollup to ensure the security of Cross-Chain Interaction transactions.

Origin: Supports integration with other Layer 1 networks (such as Solana) and Ethereum. It introduces a lightweight Oracle Machine network to ensure fast communication between different blockchains and secure transactions through ZK proofs.

Execution Layer

The execution layer is responsible for handling Cross-Chain Interaction transactions and state updates. TSzkVM of zkLink provides an execution environment optimized for high-performance applications, capable of supporting decentralized order book (CLOB), Non-fungible Token transactions, and other financial applications. It is based on the PLONK aggregator, ensuring all transaction state transitions are correct and significantly dropping on-chain verification costs.

Sorting Layer

The sorter in the current zkLink system is centralized, which provides flexibility and efficiency in the early stages of development. However, centralized sorting also brings potential risks such as single point of failure and insufficient decentralization, including transaction review, miner-extractable value (MEV), and other issues that affect the fairness and transparency of the network. To address the problems caused by centralized sorting, zkLink plans to introduce decentralized sorting solutions, including Espresso, Astria, and Fairblock decentralized platforms. These platforms process and verify transactions through a distributed node network, further enhancing network security and transparency, avoiding single point of failure and review issues, and providing users with a more fair and efficient Rollup solution.

Data Availability Layer (DA Layer)

zkLink ensures data availability through various means. By default, it uses mainchain as the DA layer and supports Validium mode, an off-chain data availability solution such as Celestia and EigenDA, to meet the different needs of developers. In addition, zkLink DAO can also form a Data Availability Committee (DAC) to provide developers with additional choices.

Introduction to Ecological Projects

AGX

Official Introduction Diagram (Source: AGX medium)

AGX is a multi-chain Perptual FuturesDecentralization exchange (DEX) based on zkLink Nova, supporting up to 100x Margin Trading. It combines the trading experience of centralized exchanges with the security of decentralized platforms, allowing users to trade through non-custodial wallets with low fees and fast settlements. The AGX ecosystem generates liquidity through the multi-asset pool (ALP), supporting multi-layer yield aggregation, including Liquidity Mining and LRT rewards. Users can earn AGX tokens through trading, staking, and other methods.

Its product features include:

Perpetual Swap Trading with Leverage: The multi-asset pool consists of 50% stablecoins and 50% assets (LRT, ETH, WBTC), and Liquidity Providers earn fees through market making, swap and margin trading.

Multi-tiered earnings: LP mining annual yield exceeds 100% APY, with earnings from EignLayer points, LSD earnings, zkLink Nova points, etc.

Pyth Oracles: Dynamic pricing is supported by PYTH Oracles, which aggregate prices from multiple exchanges to ensure trading security and accuracy.

ZKEX

Official introduction picture (Source: ZKEX official website )

ZKEX provides a seamless multi-chain trading environment, allowing users to trade on multiple on-chain through its L2 Wallet, and ensuring security using Depth, Liquidity, and Zero-Knowledge Proof technology. Traders can execute Spot and Derivatives trading through an order book model, supporting automated order types such as limit orders and stop-loss orders. ZKEX's design eliminates the risk of Slippage and Miner Extractable Value (MEV), while allowing for higher capital efficiency, aggregating Stablecoins from different chains for unified USD trading, ensuring complete user asset autonomy.

ZKJump

zkJump is a Cross-Chain Interaction bridge built on the zkLink infrastructure, aiming to simplify the transfer of native assets between different blockchain networks. Unlike traditional Cross-Chain Interaction bridges, zkJump does not require the use of intermediate or wrapped Tokens, but directly handles the Cross-Chain Interaction transfer of native assets, improving user experience and efficiency. zkJump supports multiple Layer 1 and Layer 2 networks, achieving higher security and user-friendly asset management through the Liquidity provided by zkLink. One key advantage of its design is the elimination of the need for an independent Liquidity pool, as it leverages the Liquidity of Decentralization applications built on zkLink to perform Cross-Chain Interaction operations.

Team, Funding and Roadmap

zkLink is a multi-chain trading infrastructure company founded by Vincent Yang and headquartered in Singapore. The team consists of global technical experts with research and work backgrounds from top universities such as École Normale Supérieure in Paris, Imperial College London, and Tsinghua University. They focus on areas such as network security and cloud computing.

Since its establishment in 2021, zkLink has raised approximately $18.5 million through four rounds of financing. Major investors include Coinbase Ventures, OKX Ventures, Republic Crypto, and Cypher Capital, among other well-known venture capital firms. The latest round of financing was completed in July 2024, raising $4.72 million to support the further development and ecological expansion of zkLink.

zkLink's 2024 roadmap includes multiple key development stages, covering technological upgrades and introduction of new features. Specific goals include:

Q1 2024: Achieve TS-zkVM circuit expansion, modular data availability (DA) solution integration, and support for ZK social login and ZK Oracle. These upgrades aim to enhance dApp compatibility and overall performance.

Q2 2024: New features include Non-fungible Token minting and transaction API support, implementation of hybrid mode (AMM + Central Limit Order Book CLOB), and introduction of Proof Auction market. This phase aims to expand the protocol functionality of zkLink to meet a wider range of Decentralized Finance use cases.

Q3 2024: Will focus on cross-rollup interoperability, allowing asset aggregation between L1 and Ethereum L2, and developing a new recursive proof system to improve security and efficiency.

Q4 2024: Hardware acceleration solutions and Decentralization sorting services will be integrated to further optimize protocol performance.

These development initiatives aim to enhance zkLink's overall functionality and make it more scalable and secure in the multi-chain Decentralized Finance ecosystem.

Tokenomics

zkLink's Token ZKL is its native governance and utility Token, designed to support the multi-chain trading infrastructure of the zkLink protocol. The total supply is 1 billion ZKL Tokens, and the distribution of Tokens includes several key categories: community rewards (29.875%), ecological development (22.5%), founding team and advisors (20%), early investors (20.5%), as well as Liquidity reserves and CoinList sales, etc.

The detailed allocation plan includes:

Community Treasury (29.875%): The largest share is managed by zkLink DAO for community rewards, developer incentives, etc.

Ecosystem Development (22.5%): Used to support the rise and development plan of the ecosystem.

Early private sale investors (20.5%): Allocated to pre-seed, seed round, and private sale round investors.

Team & Advisors (20%): This will be distributed monthly with a 6-month lock-up period, after which it will last for 3 years.

Liquidity reserve (4%): 50% at TGE issuance, the rest will be distributed monthly within one year.

CoinList sales (3.125%): Participants specifically for community sales, with some unlocking at TGE and the rest linearly released over 9 months.

The ZKL Token of zkLink plays multiple roles in its ecosystem:

stake: Provers need to stake ZKL Token to participate in the zkLink proof generation market and provide ZKP (Zero-Knowledge Proof) services for dApps. After completing the task, Provers will be rewarded with ZKL.

Payment: ZKL is the primary payment method in the zkLink proof generation market, and dApps will pay ZKL to the prover when using the zkLink rollup infrastructure. In addition, specific application rollups and other services also need to pay ZKL to zkLink DAO.

Governance: Through zkLink DAO, ZKL holders will be able to exercise governance over the project's future development and decision-making.

ZKL Token is used to unlock zkLink's rollup infrastructure services, pay for Zero-Knowledge Proof's computing resources, and is also the governance token of zkLink DAO, and holders can participate in the future development of the protocol through voting. In addition, zkLink has also launched a community incentive program to attract users to earn ZKL through Liquidity offers and stakes in return.

Conclusion

The innovative architecture of zkLink provides an efficient and secure cross-chain decentralized finance trading platform by utilizing Zero-Knowledge Proof technology and multi-chain liquidity aggregation. With its ZK-Rollup technology, zkLink achieves seamless transactions of cross-chain interaction assets, providing a highly scalable infrastructure for decentralized applications. Meanwhile, zkLink's token economic model supports the ecosystem's development through ZKL Token, covering stake, payment, and governance functions, further strengthening the platform's decentralization and user incentive mechanism.

Looking ahead, zkLink's roadmap includes expanding zkVM circuits, enhancing Cross-Chain Interaction interoperability, introducing Decentralization sorting services, etc., demonstrating its long-term vision for driving Decentralized Finance and multi-chain ecosystem. With the launch of more features and the growth of the ecosystem, zkLink is expected to play an important role in the Blockchain industry, providing a smoother and more efficient multi-chain trading experience.