Key Takeaways
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At the time of writing, zkSync Era has 10 protocols, and a TVL of $55.5 million. It is dominated by the SyncSwap and Mute.io DEXes.
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zkSync utilizes zero-knowledge rollups to improve the scalability of Ethereum, offering users faster transactions and lower fees. It is also suited for exchanges, has native support of NFTs, and also provides smart contract support.
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While zkSync Era is currently dominated by DEXes, there are also other projects like EraLend, a decentralized lending protocol.
zkSync Era is one of the first zero-knowledge rollups to be publicly launched. One reason why zero-knowledge rollups are highly anticipated is their promise faster withdrawals, which usually take 15 minutes to 3 hours, instead of the usual seven days required in the case of optimistic rollups like Optimism. In the case of a zero-knowledge rollup, once the zk-rollup contract has verified the validity proof, the exit transaction will be executed.
As a Layer 2 solution, zkSync Era also promises lower fees and improved scalability. It does this by “rolling up” multiple transactions to be validated as a single transaction on Ethereum, so that the total fee for all the transactions only amounts to the fee paid for a single transaction. According to zkSync, it can offer up to 2,000 TPS at peak load, which is significantly higher than Ethereum’s current 13 TPS.
If you're looking to learn more about zkSync and Era, check out our article on the protocol and how it works.
Before zkSync Era opened to the public, a number of decentralized solutions had already started building on the network. At launch, some of these projects went live as well. These projects that launched early on the network have contributed to the ecosystem’s enrichment and growing TVL. At the time of writing, a handful of them have gained prominence in the ecosystem. Interacting with these projects could be an airdrop criteria, and you can read this article to learn more about the potential zkSync airdrop.
Let’s look at some of the projects on zkSync.
SyncSwap
SyncSwap is a decentralized exchange on zkSync Era powered by AMMs (Automated Market Makers). SyncSwap offers a one-stop platform for trading crypto assets on zkSync Era with low fees, partly due to the base zkSync technology.
On SyncSwap, asset owners can lock their tokens in the liquidity pools and receive incentives from trading fees and other liquidity incentive programs. At launch, the passive income APR on SyncSwap liquidity pools was as high as 1700%, although the highest APR is now at 94.1% for the OT and USDC pool.
On DefiLlama, as of time of writing, SyncSwap is the dominant protocol on zkSync, making up more than 40% of the chain’s TVL.
SyncSwap also presents a platform for new projects on the zkSync Era to launch. Through the SyncSwap Launch Pad, new projects in the ecosystem will be able to benefit from the existing liquidity and other facilities the project offers.
Mute.io
Mute is one of the earliest DeFi projects to launch on zkSync Era. It brands itself as a liquidity hub for projects built on zkSync. The Mute team brings in experience from past involvement with the zero-knowledge protocol, having rebranded from NIX, a privacy coin for P2P transactions. Through MuteSwitch, Mute plans to deliver a basket of decentralized finance solutions on zkSync Era. According to the project, the MuteSwitch is a decentralized exchange with limit orders, powered by Automated Market Makers (AMM).
At the time of writing, MuteSwitch has recorded over $12 million in locked assets (TVL) and has processed over 350,000 asset swap requests with over $30 million in cumulative trading volume.
Since launch, we have done some impressive numbers on @zksync, but this is just the start 🔥
— Mute.io - Live on zkSync Era Mainnet (@mute_io) March 31, 2023
We're excited to announce that Amplifier and Bond protocols are finalizing their audits today by @code4rena 👀
Stay tuned for more updates! #zkDeFI pic.twitter.com/ccoBcWbm1q
Mute will utilize the efficiency and cost-effectiveness that zkSync offers to deliver fast and cheap DeFi services to its users. Through the Mute Amplifier, liquidity providers are incentivized to commit selected assets to the liquidity pool. Incentives are distributed in the project’s native token – MUTE. The MUTE token is currently trading on Uniswap, MEXC exchange, and BKex. See active trading pairs for Mute
Mute operates via a DAO. The Mute DAO undertakes the scrutinization and approval of financial and technological proposals that concern the Mute project. New improvement proposals are submitted to the DAO portal and are implemented only if they win the majority vote.
Some of the additional features teased by the project include the Mute Bond platform. According to the project, Mute Bonds designed to enable investors to purchase MUTE at a discount when they sell their LP tokens to the Mute DAO.
SpaceFi
SpaceFi operates on the zkSync and Evmos networks and offers blockchain interoperability by connecting both networks. SpaceFi offers an array of services to cryptocurrency and NFT enthusiasts, including its own NFTs which offer their holders rewards and dividends. Meanwhile, its DeFi facilities include an AMM-powered decentralized exchange with incentivized liquidity pools and a single-asset pool.
The DeFi platform also features an airdrop pool, where users earn airdrops by locking up the project’s native token – SPACE. The SPACE Token currently trades on the SpaceFi DEX only. Users of the SpaceFi swap can also earn extra income for swapping their assets through the traders’ incentives that reward users in SPACE according to the volume of their transactions.
SpaceFi also operates a DAO. Investors who lock their SPACE tokens to the governance portal receive XSpace, which is the gateway to the SpaceFi DAO. As in most DAOs, holders of the governance token can submit and vote on improvement proposals.
Other features on the DeFi platform include the launchpad and asset bridge. The launchpad enables new projects on the network to easily get started through token sale portals and liquidity programs. Meanwhile, the bridge allows users to switch their assets between supported networks, where SpaceFi presents a bridging portal for EVMOS and zkSync.
For NFT enthusiasts, SpaceFi offers a suite of services for NFT investors. Facilities on the platform include an NFT minting portal and a marketplace for NFTs on the network. The staking program also allows NFT holders to stake their NFTs and earn rewards in SPACE tokens.
EraLend
EraLend is the first native decentralized lending protocol on zkSync Era. Eraland also has a strategic partnership with SyncSwap, where users can supply their SyncSwap LP positions to EraLend, starting with the SyncSwap USDC-ETH pool. This lets them continue earning LP trading fees, while also enabling depositors to borrow USDC/ETH using their LP tokens as collateral.
Existing projects
zkSync Era is also set to welcome some already existing projects. The zk-rollup has garnered interest from several older projects who could potentially deploy their solutions on the network. At the time of writing, some of these projects have already started their operations on the network. Some of them include Argent, Onto, and Numio wallets.
Ramp and Banxa are also live on the network and processing on-ramp transactions for cryptocurrency investors, and interoperability projects, including Celer and Multichain, are also live on the zkSync Era.
As zkSync grows, other big names to look out for include 1inch, Balancer, Gnosis Safe, and MetaMask.
View the complete list of projects on the zkSync era.
Final Thoughts
There's no doubt that a lot of work has gone into bringing zkSync Era to life, but it is also worth noting that a lot still needs to be done. New and existing projects launching on the network will have to understand the platform and optimize their applications for it, including the security provisions. With the base layer itself still in alpha, it’s possible that the project may face challenges.
As always, before interacting with any protocols, do your own research. This includes checking out smart contract audits and other security documentation, and also applying risk management strategies where possible.
This article is meant for educational purposes and should not be taken as financial advice or endorsement of specific projects.
An earlier version of this article included Mint Square, an NFT marketplace, which has since ended service on June 30.
Joel is deeply interested in the technologies behind cryptocurrencies and blockchain networks. In his over 7 years of involvement in the space, he helps startups build a stronger internet presence through written content. He is the founder of CryptocurrencyScripts. Follow the author on Twitter @agboifesinachi
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