A multi-chain Internet centered on Rollup, can't we do without it?

Original | Odaily Planet Daily

Author | Husband How

When Paradigm, a top investment institution, announced 10 potential trends, among them "multiple trends centered on Rollup Chain Internet" triggered my thinking. The concept of multi-chain interconnection has been discussed in the past few years. From the interconnection between public chains to the interconnection between L2, the history is always surprisingly similar.

The industry has determined at least one basic direction, that is, the multi-chain universe based on Ethereum is gradually taking shape. Although it is centered on L2 and the entire ecology is connected through the Rollup method, it still needs to be verified, but one thing is certain is that the future narrative scenarios of related projects are large in scale and have the space to breed the next Alpha.

At this moment, zkLink came into our sight because of the announcement of a new round of rules for obtaining loyalty points. When Odaily Planet Daily learned about its specific rules, it conducted research on zkLink and found that it could be related to the potential Rollup-centric trend described by Paradigm.

Project Overview

zkLink is a multi-chain ZK-Rollup transaction infrastructure designed to solve the problems of illiquidity in transactions and interoperability of EVM-based L1 and L2.

● **Liquidity: The current situation is that different DEXs on each chain have their own liquidity pools, and the liquidity in the pools is relatively closed. **

For example, if a user wants to use Token 1 on chain A to purchase Token 2 on chain B, the normal procedure is to exchange Token 1 in the DEX of chain A for a stable coin, and then cross to chain B through a cross-chain bridge. Exchange Token 2 in the DEX of chain B. This process not only has high Gas costs, but also lacks security. zkLink is used as middleware to deploy contracts on different chains. Users with the above requirements can directly complete these operations through DEX on zkLink, using zero-knowledge proof as transaction proof, and using lightweight oracle machines between some networks to ensure the validity of transactions performance; at the same time, use zkRollup to reduce Gas costs.

● **Interoperability: zkLink is the inter-chain transaction middleware of the Ethereum multi-chain universe. From the perspective of L1 based on EVM, zkLink belongs to L2. From the perspective of L2, zkLink belongs to L3. The boundaries of the two overlap. **

Currently zkLink supports most EVM-based L1 and L2 such as Ethereum mainnet, BNB Chain, Polygon, Avalanche, zk-Sync, Starknet, Arbitrum, Optimism, etc.

Technical realization

The technical implementation of zkLink is mainly based on two technologies: ZK-Rollup and zkSNARKs. ZK-Rollup technology aggregates transactions on multiple chains and submits a summary of all transactions on the chain, thereby reducing the amount of transaction data and computing costs. zkSNARKs technology is used to compress transactions and ensure the correctness of transaction execution, while protecting the privacy of transactions.

According to the zkLink network flow chart:

• Multiple DApps can share a Rollup state to achieve combination and cost-effectiveness, and the specific ratio needs to be based on the actual situation.

• zkLink will deploy multiple Rollup states to improve performance. Many Rollup states will not directly share the same liquidity pool.

• DApp acts as a sequencer and assumes the responsibility of sorting transactions. DApp needs to be designed to prevent MEV risk protection.

• Numerous Rollup states can further compress the cost through recursive curves, thereby increasing the speed of network operation.

zk-Rollup for zkLink

A normal zk-Rollup has three phases that run sequentially: a commit phase, a proof phase, and an execution phase. zkLink adds a synchronization phase between the proof phase and the execution phase. Since zkLink is a multi-chain unification, the function of the synchronization phase is to unify the states of different chains.

The synchronization phase is the processing process of the oracle network, and its function is to promote the exchange of the final roots between different chains, and compare whether the final roots of the two chains are consistent. The figure below is the Rollup process of zkLink.

zkSNARKs for zkLink

zkLink guarantees the correctness of the offline state and transaction validity through zkSNARKs, verifies the limitation of the offline state through zero-knowledge proof, and ensures the validity of transactions by introducing a lightweight oracle network into specific network requirements.

Application scenarios

zkLink has potential in multiple application scenarios. The official scenario is as follows:

● Order book-type decentralized exchange for multi-chain atomic swap: zkLink realizes seamless multi-chain atomic swap by aggregating orders from different chains together.

● Multi-chain AMM curves: zkLink supports AMM curves on multiple chains, providing a high-performance and low-cost asset trading experience.

● Issuance and bridging of alternative tokens (OFT) across the entire chain: zkLink allows the aggregation of tokens issued on different chains, eliminating cross-chain risks and expensive bridging fees.

● Multi-chain NFT casting and trading: zkLink provides multi-chain NFT casting and trading functions, providing greater liquidity and interoperability for the NFT market.

**We believe that zkLink should be integrated with the current AA wallet in addition to the above-mentioned official application scenarios. As an intent-based component, the AA wallet can cooperate with the zkLink multi-chain transaction unity protocol to form a one-stop transaction experience. Users only need to The final purpose needs to be expressed, and the intermediate process ensures its correctness and stability in a zk way. This approach lowers the barrier to entry for new users. **

Token Economy

zkLink's utility token and governance token are ERC 20-based ZKL, which has not yet been allocated or announced details (the mainnet is not yet online).

ZKL has the following functions:

1. zkLink block fee: as a payment token for DApps to access zkLink services and pay for network block space usage fees. When the dApp server submits a block to the zkLink contract, it needs to use ZKL to pay the validator service fee. The fee is calculated based on the unit price and the sum of the transaction units in the block.

● DApp needs to mortgage ZKL to gain access to the management contract.

● The verifier also needs to pledge ZKL as a security deposit, and obtains ZKL as a reward by generating a zero-knowledge proof.

● Users who hold ZKL can also obtain privileges and special benefits, such as transaction fee discounts.

2. Governance: ZKL holders can mortgage ZKL to obtain veZKL to initiate proposals and vote on proposals to participate in the governance and development of the protocol.

Airdrop Mechanism - Loyalty Points

Currently, zkLink is launching a new loyalty point mechanism in Galxe, which is expected to start in the fourth quarter of this year. This loyalty point will be used as the standard for the airdrop. According to the picture below, what is currently displayed on Galxe is the point reward of previous activities.

** The method of obtaining loyalty points is based on the completion of relevant tasks, and the previous points are still being counted. The new event officially started in the fourth quarter of this year, and the specific rules have not yet been announced. **

Ecological Status

At present, zkLink is in the testnet stage, and the DApps on the chain include ZKEX, zkJump, and OpenWorld.

ZKEX is the first decentralized multi-chain order book exchange based on zkLink. (beta stage)

zkJump is a zkLink-based cross-chain bridge that currently supports 12 chains including BNB Chain, Avalanche, zk-Sync, Starknet, and Optimism. (beta stage)

OpenWorld is a decentralized derivatives exchange based on zkLink. (beta stage)

**ZkLink has not yet been officially launched, and the ecological construction is still in a relatively early stage. However, according to the operation process of the zkLink network, it may be relatively difficult to build DApps on zkLink. After all, some DApps need to act as the sorter function of zkRollup . **

Competitive product comparison

zkLink is positioned as a middleware for multi-chain interconnection related to Ethereum. It realizes transaction interconnection through zkSNARKs and zkRollup, which is essentially part of the cross-chain track. Layerzero is currently developing well on this track, but the implementation methods and paths of the two , The effect is different.

As a general-purpose cross-chain infrastructure, Layerzero uses repeaters, oracles, and Endpoints (contracts deployed on each chain) as tools for cross-chain transmission. The repeater is responsible for the transmission of the transaction proof on the chain, the oracle is responsible for reading the block header information of the source chain and transmitting it, and the Endpoint is responsible for the receiving or transmitting endpoint.

● Pack the data and destination to be delivered to the oracle and repeater through the Endpoint of the source chain.

● The oracle machine reads and confirms the block header. After the oracle machine confirms that the block has passed several block confirmations on the A chain, it sends the block header to the Endpoint on the B chain.

● The Endpoint on the target chain asks the relay through the received block header, and the relay receives the transaction proof of the source chain.

● After the verification under the chain is passed, the oracle machine and the relay will send the relevant transaction information to the target chain to complete the cross-chain communication.

Layerzero transmits block header information and transaction proof separately to achieve relatively safe cross-chain communication. The risk here is to ensure that repeaters and oracles will not collude, which depends on the degree of decentralization of the two.

**Through the above introduction about Layerzero, although both arrange contracts on different target chains to collect transaction proofs, zkLink is more biased towards the application layer to improve interoperability between L1 and L2. Layerzero, as L0, is responsible for the synchronization between chains, etc. The focus of the two is different. **

Some Thoughts

What does Paradigm mean by a Rollup-centric multi-chain internet?

For multi-chain interconnection, due to the slow speed of the Ethereum main network and high gas fees, everyone wants to change it through multi-chain interconnection. In the past few years, projects such as Cosmos and Polkadot have attracted much attention, but so far, the ecology is still lacking. When L2 develops, the demand orientation changes from the interconnection between L1 and L1 to the interconnection between L1 and L2, and between L2.

Therefore, I think the current mainstream direction of Web3 is the interconnection of the multi-chain universe (based on EVM or L2) with Ethereum as the core. For the Rollup-centered interconnection, zkLink explained that Rollup is used as a tool to package the transactions of each chain into the Rollup state of zkLink, so as to realize the unification of the two based on zkLink; increase the correlation between L1 and L2, and improve the mutual Operability, lowering the participation threshold for new users.

Finally, use a metaphor to describe the role positioning of zkLink, as the end of this article:

If the Ethereum multi-chain universe is described as an archipelago, zkLink is equivalent to a ship. It only needs to have a dock on each island to be responsible for the connection between each island.