What is zkLink?

zkLink is an innovative cross-chain Layer 2 infrastructure that utilizes zero-knowledge proof (ZK Rollup) technology. It is specifically designed to tackle the issues of liquidity fragmentation and the complexities of cross-chain transactions in the blockchain ecosystem. With zkLink, users can effortlessly transfer assets across various blockchains and Layer 2 networks, such as Ethereum, Arbitrum, and zkSync, removing the need for traditional cross-chain bridges. The core technology, ZK Rollup, ensures transaction security and simplifies the deployment of decentralized applications (dApps) through cross-chain state synchronization, significantly lowering transaction costs.

zkLink’s architecture enables multiple blockchain networks, including Ethereum and BSC, to aggregate liquidity. The ZK Rollup technology safeguards the integrity of off-chain computations using zero-knowledge proofs, which greatly enhances transaction efficiency and reduces the complexity of cross-chain operations, maximizing the utilization of liquidity. Compared to traditional cross-chain bridges, zkLink provides a more secure and decentralized solution, ensuring that transaction data remains immutable and eliminating funding risks. Furthermore, its oracle network streamlines cross-chain logic, improving interoperability among different chains.

Additionally, zkLink’s multi-chain settlement solutions, such as Nexus and Origin, facilitate efficient cross-chain operations for decentralized applications, including decentralized exchanges and NFT marketplaces, by integrating liquidity across various chains. zkLink has also introduced zkLink Nova, a Layer 3 aggregation network that connects Ethereum and its Layer 2 networks, allowing for unified liquidity management and enhanced interoperability. This architecture effectively addresses the problem of fragmented liquidity and further reduces operational complexity and costs, establishing a strong foundation for the scalability of the blockchain ecosystem.

Why do we Need zkLink?

As blockchain technology rapidly evolves, numerous blockchains (L1) and Layer 2 networks (like Arbitrum and zkSync) are emerging, creating a complex multi-chain ecosystem. However, this multi-chain setup presents challenges such as liquidity fragmentation and difficulties with cross-chain transactions. Users frequently encounter high fees, delays, and complicated procedures when transferring assets between chains. Moreover, traditional cross-chain bridge solutions have faced criticism due to security concerns and risks associated with asset custody. These issues have impeded the widespread adoption of decentralized finance (DeFi) and cross-chain applications. zkLink addresses these challenges by simplifying the cross-chain transaction process with its innovative ZK Rollup-based solution, which reduces complexity and offers users a more efficient and secure experience for transferring assets across chains.

Historically, the process of managing tokens across different blockchains has been both complex and costly. For instance, if a user wanted to exchange Token A on Chain A for Token B on Chain B using a decentralized exchange (DEX), it typically involved several steps and multiple fees. First, the user would need to install a wallet and buy gas tokens for Chain B. Next, they would have to swap Token A for a stablecoin or an intermediary token that could be bridged to Chain B. Finally, the user would purchase Token B on Chain B via a local DEX. While the introduction of various cross-chain asset bridge applications has made this process somewhat easier, the costs associated with cross-chain token exchanges remain high, making seamless token interactions across chains difficult and expensive for users.

Using a “multi-chain” ZK-Rollup architecture, zkLink stands out from other cross-chain projects by not relying on traditional cross-chain bridges. This is a significant difference—most cross-chain solutions depend on converting assets into wrapped tokens for cross-chain use, which can introduce security vulnerabilities and efficiency challenges. In contrast, zkLink enables users and developers to interact directly with native assets across blockchains (L1) and Layer 2 networks (L2), significantly improving security and streamlining the operational process.

Source: zkLink Documentation

Key Benefits of zkLink

Using ZK Rollup technology, zkLink delivers a decentralized multi-chain solution that offers several key benefits:

Security: Leveraging zero-knowledge proofs, zkLink guarantees that transaction data cannot be altered, eliminating the need for traditional cross-chain bridges and significantly reducing the risk of fund theft.

Efficient Liquidity Aggregation: zkLink consolidates liquidity from various blockchains and Layer 2 networks into a single platform, enabling users to trade effortlessly across multiple networks and greatly improving capital efficiency.

Cost-Effectiveness: The zkLink architecture minimizes the number of intermediary steps in cross-chain transactions, lowering transaction fees. It also enhances the network’s scalability through state synchronization and ZK Rollup, reducing the computational resources needed for on-chain validation.

Multi-Chain Interoperability: zkLink’s multi-chain settlement solutions, such as Nexus and Origin, offer a more flexible cross-chain experience for decentralized applications like DEXs and NFT marketplaces while eliminating the centralization risks commonly found in traditional cross-chain bridges.

Applications of zkLink

zkLink has successfully launched its Layer 3 aggregation network, zkLink Nova, on the mainnet. This network integrates liquidity from Ethereum and its Layer 2 networks, effectively tackling the problem of liquidity fragmentation. Since its launch in March 2024, zkLink Nova has rapidly exceeded $1 billion in total value locked (TVL) and has facilitated over 2 million transactions. Additionally, zkLink is actively promoting user growth through initiatives like the “Aggregation Parade” reward program, which aims to enhance the development of its ecosystem further.

Technical Overview of zkLink

The zkLink architecture is structured into four main layers: the settlement layer, execution layer, sorting layer, and data availability (DA) layer. Each layer is designed independently, allowing for flexible and scalable Rollup deployments.

Source: zkLink Documentation

Settlement Layer

The settlement layer of zkLink employs ZK Rollup technology to guarantee the security and integrity of multi-chain transactions.

Source: zkLink Documentation

zkLink offers two primary settlement solutions:

Nexus: This solution is mainly designed for Ethereum and its Layer 2 networks, leveraging Ethereum’s robust security. It synchronizes transaction states across multiple chains using ZK Rollup, ensuring secure cross-chain transactions.

Origin: This solution supports integration with other Layer 1 networks, such as Solana, and Ethereum. It incorporates a lightweight oracle network to facilitate rapid communication between blockchains, securing transactions through ZK proofs.

Execution Layer

The execution layer manages cross-chain transactions and state updates. zkLink’s TSzkVM provides a high-performance execution environment tailored for applications like decentralized limit order books (CLOB) and NFT trading. Built on the PLONK aggregator, it ensures that all transaction state transitions are accurate while significantly lowering the costs associated with on-chain validation.

Sorting Layer

The current sorting mechanism in the zkLink system is centralized. While this design allows for greater flexibility and efficiency during the initial development stages, it also brings risks, such as single points of failure and a lack of decentralization. These risks include transaction censorship and miner extractable value (MEV), which can undermine the network’s fairness and transparency. ZkLink plans to implement decentralized sorting solutions through platforms like Espresso, Astria, and Fairblock to mitigate these challenges associated with centralized sorting. These decentralized platforms will handle and validate transactions using a distributed node network, thereby increasing the network’s security and transparency, eliminating single points of failure and censorship issues, and providing users with a more equitable and efficient Rollup solution.

Data Availability Layer (DA Layer)

zkLink guarantees data availability through various methods. By default, it utilizes the main chain as the DA layer. It supports Validium mode, which incorporates external data availability solutions like Celestia and EigenDA to cater to the diverse needs of developers. Furthermore, the zkLink DAO can establish a Data Availability Committee (DAC) to offer additional options for developers.

Introduction to zkLink Ecosystem Project

AGX

Source: AGX medium

AGX is a decentralized exchange (DEX) for multi-chain perpetual contracts built on zkLink Nova, allowing for leveraged trading up to 100 times. It merges the user-friendly trading experience of centralized exchanges with the security features of decentralized platforms, enabling users to perform low-cost, quick-settlement trades using non-custodial wallets. The AGX ecosystem creates liquidity through multi-asset pools (ALP) and facilitates multi-layer yield aggregation, which includes liquidity mining and LRT yields. Users can earn AGX tokens through various activities such as trading and staking.

Key features of the product include:

Leveraged Perpetual Trading: The multi-asset pool comprises half stablecoins and half assets (LRT, ETH, WBTC), allowing liquidity providers to earn fees through market making, swaps, and leveraged trades.

Multi-Tiered Yields: LP mining can yield annual returns exceeding 100% APY, with sources of income coming from EignLayer points, LSD yields, and zkLink Nova points.

Pyth Oracles: Pyth Oracles power dynamic pricing, aggregating prices from various exchanges to ensure the security and accuracy of transactions.

ZKEX

Source: ZKEX Official Website

ZKEX offers a seamless multi-chain trading environment, allowing users to trade across various blockchains using its Layer 2 wallet. It employs deep liquidity and zero-knowledge proof technology to ensure security. Traders can engage in spot and derivative trading through an order book model, supporting automated order types such as limit orders and stop-loss orders. The design of ZKEX mitigates the risks associated with slippage and miner extractable value (MEV), while enhancing capital efficiency by aggregating stablecoins from different chains into a unified USD for trading, guaranteeing complete control over user assets.

ZKJump

zkJump is a cross-chain bridge built on the zkLink infrastructure aimed at simplifying the transfer of native assets across various blockchain networks. Unlike traditional cross-chain bridges, zkJump allows for direct handling of native asset transfers without intermediary or wrapped tokens, improving user experience and efficiency. It supports multiple Layer 1 and Layer 2 networks, providing enhanced security and user-friendly asset management through liquidity sourced from zkLink. A significant advantage of its design is that it removes the necessity for independent liquidity pools, utilizing the liquidity from decentralized applications built on zkLink to facilitate cross-chain transactions.

Team, Financing Situation, and Roadmap

zkLink is a multi-chain trading infrastructure company founded by Vincent Yang and is based in Singapore. The team comprises global technical experts with impressive backgrounds from top institutions like École Normale Supérieure in Paris, Imperial College London, and Tsinghua University, specializing in cybersecurity and cloud computing.

Since its inception in 2021, zkLink has raised around $18.5 million through four funding rounds. Notable investors include prominent venture capital firms like Coinbase Ventures, OKX Ventures, Republic Crypto, and Cypher Capital. The most recent funding round took place in July 2024, raising $4.72 million to support zkLink’s ongoing development and ecosystem growth.

The roadmap for zkLink in 2024 outlines several key development phases that focus on technological enhancements and the introduction of new features.

The specific objectives are as follows:

Q1 2024: Focus on expanding the TS-zkVM circuit, integrating modular data availability solutions, and implementing ZK social login and ZK Oracle support. These upgrades are designed to improve decentralized applications’ compatibility and overall performance (dApps).

Q2 2024: New features will include support for NFT minting and trading APIs, implementing a hybrid model that combines Automated Market Making (AMM) with a Central Limit Order Book (CLOB), and introducing a Proof Auction market. This phase aims to broaden zkLink’s protocol capabilities to accommodate a wider array of DeFi use cases.

Q3 2024: The focus will shift to achieving interoperability across Rollups, enabling asset aggregation between Layer 1 and Ethereum Layer 2, and developing new recursive proof systems to enhance security and efficiency.

Q4 2024: Plans include integrating hardware acceleration solutions and decentralized ordering services to optimize the protocol’s performance further.

These development initiatives aim to strengthen zkLink’s overall functionality, enhancing its scalability and security within the multi-chain DeFi ecosystem.

Token Economics

The ZKL token is zkLink’s native governance and utility token, specifically designed to support the multi-chain trading infrastructure of the zkLink protocol. With a total supply of 1 billion ZKL, the token distribution is divided into several key categories: community rewards (29.875%), ecosystem development (22.5%), founding team and advisors (20%), early investors (20.5%), liquidity reserves, and CoinList sales.

Here is the detailed distribution plan:

Community Treasury (29.875%): This is the largest share, managed by the zkLink DAO, and is allocated for community rewards, developer incentives, and other initiatives.

Ecosystem Development (22.5%): Funds dedicated to supporting the growth and development of the ecosystem.

Early Private Investors (20.5%): This allocation is for pre-seed, seed, and private funding round investors.

Team and Advisors (20%): This portion will be distributed monthly after a 6-month lock-up period and continue for a total of 3 years.

Liquidity Reserve (4%): Half of this will be released at the Token Generation Event (TGE), with the rest distributed monthly over the following year.

CoinList Sale (3.125%): This allocation is specifically for participants in community sales. Part of it will be unlocked at TGE, and the remainder will be released linearly over nine months.

The ZKL token serves several important functions within the zkLink ecosystem:

Staking: Provers must stake ZKL tokens to participate in zkLink’s proof generation market, providing zero-knowledge proof (ZKP) services for decentralized applications (dApps). After completing tasks, provers earn ZKL as a reward.

Payment: ZKL is the main payment method in the zkLink proof generation market, where dApps pay provers in ZKL to use the zkLink rollup infrastructure. Certain application rollups and services are also required to pay ZKL to the zkLink DAO.

Governance: ZKL holders can participate in governance through the zkLink DAO, allowing them to influence the project’s future direction and decisions.

The ZKL token is utilized to access zkLink’s rollup infrastructure services, cover the computational costs of zero-knowledge proofs, and act as the governance token for the zkLink DAO, enabling holders to vote on the protocol’s future. Additionally, zkLink has introduced a community incentive program to encourage users to earn ZKL rewards through liquidity provision and staking.

Conclusion

zkLink’s innovative architecture leverages zero-knowledge proof technology and multi-chain liquidity aggregation to deliver an efficient and secure multi-chain DeFi trading platform. With its ZK-Rollup technology, zkLink enables seamless cross-chain asset transactions, providing a highly scalable infrastructure for decentralized applications (dApps). Additionally, zkLink’s tokenomics model, supported by the ZKL token, fosters ecosystem growth through staking, payments, and governance functions, further reinforcing the platform’s decentralization and user incentive mechanisms.

ZkLink’s roadmap includes plans to expand the zkVM circuit, enhance cross-chain interoperability, and introduce decentralized ordering services, showcasing its long-term vision for advancing DeFi and the multi-chain ecosystem. As more features are rolled out and the ecosystem expands, zkLink is poised to play a significant role in the blockchain industry, offering a smoother and more efficient multi-chain trading experience.