Introduction

Scroll (SCR) is an Ethereum Layer 2 scaling solution that uses zero-knowledge rollup technology to address this network’s commonly high transaction costs and limited throughput. Its zero-knowledge Ethereum Virtual Machine (zkEVM) ensures good compatibility with Ethereum’s existing infrastructure, which enables developers to deploy smart contracts without modifying their applications.

The Scroll blockchain enhances Ethereum’s capabilities by processing transactions off-chain and bundling them into cryptographic proofs submitted to the Ethereum mainnet, reducing gas fees and increasing efficiency, while preserving the principles of decentralization and security. The SCR token is very important to the Scroll ecosystem. It facilitates transaction fee payments, incentivizes network participants like provers and sequencers, and enables governance participation. By serving as a utility and governance token, SCR supports the Scroll Layer 2 solution while fostering a community-driven approach to development and decision-making.

What is Scroll?

Scroll (SCR) is a Layer 2 scaling solution for Ethereum built to enhance the network’s efficiency and accessibility by using advancements in zero-knowledge proofs and blockchain design, to provide an additional layer on Ethereum that is more responsive and capable of supporting a larger user base. Through Ethereum compatibility, developers and users can transition to Scroll without learning new tools, frameworks, or workflows.

Scroll is designed as a zkEVM-based rollup, meaning it processes transactions off-chain. It publishes its cryptographic proofs to Ethereum’s mainnet, ensuring that all activities comply with Ethereum’s rules, preserving security, decentralization, and censorship resistance. It replicates Ethereum’s functionality, allowing users to interact with decentralized applications (dApps) like Uniswap or Aave, while benefiting from faster transactions and reduced gas fees. It is a security-focused scaling solution for Ethereum, meaning its primary goal is to address Ethereum’s scalability challenges while maintaining a strong level of security.

ZkEVM Types: From Type 1 to Type 4

Vitalik Buterin, co-founder of Ethereum, has categorized zkEVMs into four types based on their compatibility with the Ethereum protocol and the Ethereum Virtual Machine (EVM):

Type 1: Fully Ethereum-Equivalent zkEVMs
These zkEVMs aim for complete equivalence with Ethereum, making no changes to the existing Ethereum system. They preserve all aspects of Ethereum’s state and transaction trees, hash functions, and other consensus logic. This full compatibility allows existing Ethereum applications and infrastructure to operate without modifications. However, this approach may result in slower proof generation times due to the complexity of Ethereum’s design.

Type 2: Fully EVM-Equivalent zkEVMs
Type 2 zkEVMs strive for full compatibility with the EVM, enabling existing applications to function with minimal changes. They may modify Ethereum’s data structures to facilitate easier development and faster proof generation. While they maintain compatibility with most Ethereum applications, these slight alterations mean they are not entirely equivalent to the original Ethereum protocol.

Type 3: Almost EVM-Equivalent zkEVMs
These zkEVMs are mostly compatible with the EVM but implement more substantial changes to Ethereum’s design to enhance performance. As a result, some existing applications may require modifications to operate correctly. The trade-off involves improved efficiency at the expense of full compatibility with Ethereum’s existing infrastructure.

Type 4: High-Level Language Equivalent zkEVMs
Type 4 zkEVMs are compatible with high-level programming languages like Solidity but do not execute EVM bytecode directly. Instead, they translate high-level code into their own native bytecode, necessitating significant changes to existing applications and tools. This approach can lead to faster proof generation but requires more extensive adaptations from developers.

Scroll is working towards becoming a Type 1 zkEVM, aiming for full equivalence with Ethereum to ensure seamless integration with existing applications and infrastructure. This goal involves replicating Ethereum’s functionality without modifications, allowing for complete compatibility and ease of use for developers and users.

How Scroll Works

Scroll enhances Ethereum’s scalability by implementing a zkEVM-based rollup architecture, which processes transactions off-chain and submits succinct proofs to the Ethereum mainnet, which maintains Ethereum’s security and decentralization while increasing transaction throughput and reducing costs.

Transactions are initially processed off-chain within the Scroll network. This involves executing Ethereum Virtual Machine (EVM) operations in an environment that mirrors Ethereum’s functionality, ensuring compatibility with existing smart contracts and decentralized applications (dApps).

After executing transactions, Scroll generates zero-knowledge proofs, specifically zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge). These cryptographic proofs attest to the validity of the off-chain computations without revealing the underlying data, preserving privacy and security. The generated proofs, along with the corresponding transaction data, are then submitted to Ethereum’s Layer 1, and the smart contracts then verify these proofs to confirm that the off-chain transactions were executed correctly and adhere to the network’s rules.

This approach is advantageous in terms of scalability, cost efficiency, security and decentralization, allowing Scroll to provide a scalable and efficient solution for Ethereum users and developers, facilitating the growth of dApps and the broader Ethereum ecosystem.

How to Get Started with Scroll

Users can explore Scroll through its live mainnet or the Scroll Sepolia testnet, a zero-knowledge rollup test network built on Ethereum’s Sepolia testnet. To begin, users must set up a compatible wallet, such as MetaMask, and connect to the Scroll network. The network configurations can be added manually or through automated tools provided in Scroll’s documentation. Once connected, users can transfer assets from Ethereum to Scroll using the bridge application.

The Scroll Sepolia testnet allows users to experiment with Scroll’s functionalities without using real funds. Using the bridge application, users can obtain testnet ETH from a Sepolia faucet and transfer it to the Scroll Sepolia network. From there, they can interact with pre-deployed demo applications such as Uniswap and Aave. The testnet offers a safe environment for developers and users to familiarize themselves with Scroll’s ecosystem.

Scroll’s Features

Scroll offers users a more efficient and cost-effective experience on Ethereum. By processing transactions off-chain and publishing proofs to Ethereum’s mainnet, Scroll significantly reduces gas fees. This makes decentralized applications (dApps) on the network accessible to a broader audience, including those deterred by high transaction costs.

1. Scroll’s Mainnet Deployment

The Scroll mainnet is the live, fully functional Layer 2 network built on Ethereum. It allows developers to deploy their decentralized applications (dApps) directly onto a scalable, cost-efficient platform without compromising security or compatibility with Ethereum’s existing ecosystem.

2. Sepolia Testnet on Scroll

The Sepolia Testnet is a part of the Scroll ecosystem, providing developers with a sandbox environment to test, refine, and optimize their decentralized applications (dApps) before deploying them to its live mainnet. It mirrors the functionalities of Scroll’s mainnet, offering a realistic environment where developers can simulate real-world scenarios without financial risks, by acquiring test tokens through available faucets, such as the Scroll Sepolia Faucet or third-party Ethereum test faucets. These tokens help to interact with the network, enabling developers to simulate transactions and test application workflows without incurring actual costs.

The Sepolia Testnet includes pre-deployed tools and applications such as Uniswap and Aave. Developers can interact with these dApps to test integrations, explore functionality, and refine user interactions, to reduce setup time and allow developers to focus on building their applications.

The Scroll Bridge integration is fully functional on the testnet, allowing developers to simulate token transfers between Ethereum and Scroll’s Layer 2 network. This feature ensures that cross-network transactions can be tested comprehensively before deployment to the mainnet. Multiple block explorers, including Scrollscan, L2Scan, and Dora Explorer support it. These tools allow developers to track transactions, analyze contract interactions, and identify potential issues, providing detailed transaction histories and error logs to simplify debugging.

3. Comprehensive Documentation and SDK

Scroll provides detailed and accessible documentation to help developers understand its infrastructure and build efficiently. The documentation includes guides for deployment, integration, and troubleshooting, making it easier for developers to adapt their projects to the Scroll ecosystem.

For users looking to deploy custom blockchains or applications, Scroll offers an SDK (Software Development Kit), a tool that empowers developers to take ownership of their blockspace, enabling tailored blockchain solutions that fit specific project requirements.

Scroll $SCR Tokenomics

The Scroll (SCR) token is an important element of the Scroll ecosystem, serving as the primary governance mechanism and facilitating the network’s decentralization. Its total supply is capped at 1 billion SCR tokens, the distribution is structured to support facets of the platform’s growth and sustainability.

Token Allocation

• Ecosystem & Growth (35%): This portion is dedicated to fostering the development and expansion of the Scroll ecosystem. It includes allocations for the Scroll DAO Treasury (10%) and ecosystem incentives, such as the Binance Launchpool allocation (25%).
• Scroll Contributors (23%): Allocated to team members, advisors, and future contributors, this segment recognizes and incentivizes those who actively contribute to the project’s advancement.
• Investors (17%): Reserved for individuals and entities that have invested in Scroll, providing the necessary capital to support the project’s development and operations.
• Scroll Foundation (10%): This allocation supports the foundation’s initiatives, including research, development, and community engagement efforts.
• Airdrops (15%): Designed to reward early adopters and active participants within the Scroll community, this allocation is divided into an initial airdrop of 7% and future airdrops totaling 8%.

Scroll’s Vesting Schedule and Utility

To ensure the project’s long-term stability and aligning to its incentives, specific allocations are subject to vesting periods. For instance, tokens allocated to investors and contributors are typically locked for a certain period before being gradually released. This approach helps maintain a balanced token supply and mitigates potential market volatility.

Beyond governance, SCR tokens incentivize providers and sequencers, ensuring the network’s security and efficiency. As Scroll progresses towards full decentralization, SCR will be central to various protocol functions, including transaction validation and network maintenance.

Scroll Ecosystem and dApps

Scroll has become a promising platform for decentralized applications (dApps), attracting many projects across various sectors such as DeFi, gaming, and infrastructure.

Aave V3

A proposal was made to deploy Aave V3 on the Scroll mainnet to establish Aave as a key DeFi application within the Scroll ecosystem. The initial deployment plans to support assets such as WETH, USDC, and wstETH as collateral, with USDC available for borrowing.

Aave, a leading decentralized liquidity protocol, has proposed deploying its V3 version on the Scroll mainnet. This integration aims to bring lending and borrowing functionalities to the Scroll ecosystem, allowing users to supply and borrow assets like WETH, USDC, and wstETH. Aave’s deployment on Scroll is expected to enhance its reach while leveraging Scroll’s zkEVM rollup for low-cost and efficient transactions, making DeFi more accessible to a wider audience.

Stargate Bridge \
Stargate, a composable liquidity protocol, is actively integrated into Scroll to facilitate seamless cross-chain transfers. Stargate enhances asset mobility across chains by supporting bridging between Scroll and other EVM-compatible networks such as Arbitrum, Optimism, and Avalanche. This integration aligns with Scroll’s objective of reducing friction for users who need to move assets between networks while maintaining cost efficiency and transaction speed.

Uniswap \
Uniswap, a popular decentralized exchange (DEX), has also been exploring opportunities to expand onto Scroll. By integrating with Scroll’s zkEVM infrastructure, Uniswap could bring its token-swapping capabilities to a broader range of users, offering lower gas fees and faster transactions than Ethereum Layer 1. This deployment would further strengthen Scroll’s DeFi offerings and attract liquidity providers seeking better efficiency.

Lido \
Lido’s liquid staking service has been proposed as a valuable addition to the Scroll ecosystem. Through Lido, users can stake Ethereum on Scroll and receive liquid staking derivatives, allowing them to maintain liquidity while earning staking rewards. Scroll’s scalable infrastructure and Lido’s staking model could attract users looking for a cost-effective staking experience with enhanced utility for their staked assets.

DeBank \
DeBank, a Web3 portfolio tracking tool, has integrated with Scroll to provide users with a seamless way to monitor their DeFi assets. This includes tracking token balances, yield farming rewards, and lending positions within Scroll’s ecosystem. DeBank’s analytics and management tools enhance the user experience, offering a streamlined approach to managing assets across Scroll and other blockchain networks.

Scroll’s Development Team, Backers and Partners

Scroll’s development team is formed by Sandy Peng, Haichen Shen, and Ye Zhang, guiding Scroll through its developmental phases to address Ethereum’s scalability challenges. The team operates with a global presence, with members spread across 30 countries, reflecting a commitment to decentralization and inclusivity.

Its international collaboration has helped to build Scroll’s zkEVM, an open-source zero-knowledge Ethereum Virtual Machine. The development process has been conducted in collaboration with the Ethereum Foundation’s Privacy and Scaling Explorations (PSE) team and a community of individual contributors, ensuring that the zkEVM aligns with Ethereum’s principles.

Scroll’s Partnerships and Investors

Scroll has established significant partnerships and attracted investments from important investors and backers in the blockchain and cryptocurrency sectors, underscoring its commitment to scaling Ethereum effectively.

In September 2024, Ether.fi, a decentralized staking protocol, integrated Scroll as its Layer 2 settlement layer, a collaboration focused on using Scroll’s zero-knowledge rollup technology to efficiently process transactions. Through its gasless transactions, Ether.fi eliminates the financial barrier associated with network fees, creating a more accessible platform for its users. This partnership allows Ether.fi to enhance its staking services while ensuring users can interact with the protocol without worrying about high transaction costs, improving functionality and accessibility.

In October 2024, Scroll joined forces with Nansen, a prominent on-chain analytics platform. This partnership is designed to improve the availability of blockchain data and insights within the Scroll ecosystem. Developers and investors benefit from detailed analytics and actionable information that supports decision-making and growth. Nansen’s expertise in on-chain analytics enriches Scroll’s ecosystem by offering tools that track transactions, identify trends, and analyze user behavior. This makes the platform more appealing to participants in decentralized finance and other blockchain-based projects.

Notable Investors

Polychain Capital, a leading cryptocurrency investment firm, participated in Scroll’s $50 million funding round in March 2023, contributing to the project’s valuation of $1.8 billion.

The Chinese arm of the global venture capital firm Sequoia Capital, Sequoia China also invested in Scroll during the March 2023 funding round, supporting the project’s development and expansion.

The crypto-focused investment division of Bain Capital, Bain Capital Crypto, was among the investors in Scroll’s $50 million funding round, highlighting confidence in Scroll’s vision and technology. In March 2023, OKX Ventures, the investment arm of the cryptocurrency exchange OKX, announced a strategic investment in Scroll. This investment aligns with OKX Ventures’ vision of supporting Ethereum’s scalability through off-chain solutions utilizing the latest technology.

These partnerships and investments reflect the industry’s recognition of Scroll’s potential to enhance Ethereum’s scalability and usability, positioning it as a significant player in the blockchain ecosystem.

Scroll’s Funding Rounds

Series A (April 2022)

Scroll secured $30 million in this round, led by prominent investors, including Bain Capital Crypto, Polychain Capital, and Sequoia China. This funding was directed toward advancing its zkEVM (zero-knowledge Ethereum Virtual Machine) technology and expanding its development team.

Series B (March 2023)

The company raised an additional $50 million, elevating its total funding to $83 million. This round saw investors such as Moore Capital Management, Variant Fund, Newman Capital, IOSG Ventures, and Qiming Venture Partners participate.

Valuation

Following the Series B funding, Scroll’s valuation reached approximately $1.8 billion, which is a big milestone that helps to signify the industry’s recognition of Scroll’s potential to significantly impact Ethereum’s scalability and efficiency. These investments are very meaningful to help accelerate Scroll’s development, enabling the launch of its mainnet and the implementation of key protocol upgrades.

Conclusion

Scroll (SCR) is a Layer 2 scaling solution designed to address Ethereum’s scalability and cost challenges by using zk-rollup technology to enhance efficiency while maintaining security and decentralization. With its zkEVM compatibility, developers can deploy dApps without modifying existing code, making the platform accessible and straightforward for users and developers alike.

The Scroll ecosystem contains features such as its live mainnet, the Scroll Sepolia testnet for risk-free experimentation, an in-depth and comprehensive developer documentation, and an SDK to enable custom blockchain solutions. The SCR token plays a significant role, serving as a utility and governance token while supporting network participants and ensuring decentralization.

Scroll’s success is also demonstrated through its partnerships with Ether.fi and Nansen, as well as its significant funding from major investors such as Polychain Capital, Sequoia China, and Bain Capital Crypto. With a valuation of $1.8 billion, Scroll is well-positioned to drive growth and innovation within the Ethereum ecosystem, providing a scalable, efficient, and user-friendly environment for decentralized applications and blockchain-based solutions.