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If you are someone who lurks on Twitter, it is hard to miss tweets that contain quirky acronyms like ZK. Investors who were on the feet with tracking new investing narratives like liquid staking derivatives (LSD), Zero Knowledge (ZK) etc have profited massively from the recent price of Bitcoin (BTC).
Ethereum (ETH) can be thought of as a group of computers that stores transactions and maintains a global state (who owns how many ETH, what smart contracts are available etc) of those transactions. But it was becoming increasingly difficult to perform these transactions without a spike in the transaction (gas) fees. This is where Ethereum layer 2 solutions like ZK roll ups come in.
A ZK-proof is a cryptographic tool that can be used to create ZK-rollups. With ZK-rollups, transactions can be processed but don’t require all transaction data to be posted on Ethereum. This helps to reduce the block space used on Ethereum, enabling it to scale and reduce gas fees. They achieve this by moving computationally intensive processes from the Ethereum mainnet (Layer 1) to a sidechain (Layer 2). A rollup submits just enough data to the mainchain so that any participant can recreate the transaction states and detect invalidity or errors. Security isn’t compromised, since the transaction data is stored on the Ethereum mainchain.
ZK rollups carry immense potential as an practical scalability solution for Ethereum. Therefore, to take advantage of this fast-developing technology, here’s a list of protocols that implement ZK-Rollups and their coins.
Polygon network is a ZK-Rollup-based protocol that allows developers to build Dapps which combine the high-security features of Ethereum with the low gas fees and scalability of Polygon Network. MATIC is the native token powering the Polygon Network. It’s used to pay transaction fees, and can also be staked in the PoS consensus to earn passive income. The main reason to keep an eye on MATIC is the rapid growth of the Polygon network, with more interoperable projects launching on it. You can buy and sell MATIC tokens here.
The Loopring network is a ZK-Rollup-powered project that enables developers to create decentralized exchanges (DEXs) with fast settlement for traders on the Ethereum network. Loopring DEXs offer low-cost trading and payment on the Ethereum blockchain, leveraging the high-throughput advantage of ZK proofs. LRC is the native utility token of the Loopring network. Traders pay in LRC when processing each trade. You can trade LRC tokens here.
Immutable X is a layer 2 scaling solution for non-fungible tokens (NFTs) on Ethereum. It uses ZK-Rollups to scale up trading, and to eliminate gas fees for NFT minting and trading, without sacrificing the security of users and assets. IMX is the native utility token of the Immutable X protocol. Users can earn IMX by trading and carrying out other activities on the network. IMX can be used to pay fees, to stake on the protocol, or as a governance token. You can acquire IMX tokens here.
Ahead of the zkSync and StarkNet token releases, in conjunction with the upcoming Polygon zkEVM launch. ZK-related protocols have been performing strongly. It's undeniable that ZK is the future of scaling Ethereum. ZK-rollups help alleviate congestion by 'rolling up' transactions into batches that are executed off-chain. With upcoming mainnet launch in Polygon and interest in ZK technology, as a top-rated exchange in India, Giottus will launch Mina Protocol (MINA), Syscoin (SYS) and Dusk Network (DUSK) in near future.
Use promocode TNM51 at www.giottus.com/profile#promo after registration to get Rs.51 worth free Bitcoin.
Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.