zkLink is a cohesive multichain trading framework fortified by zk-SNARKS. It facilitates the development of advanced decentralized trading solutions, including order book DEXs, NFT marketplaces, and other applications. zkLink’s comprehensive, multi-functional ZK-Rollup middleware empowers developers and traders to utilize pooled assets and liquidity across diverse chains. By interlinking various L1 blockchains and L2 networks, zkLink facilitates a seamless multichain trading experience and enhances the accessibility and efficiency of the DeFi ecosystem.

What is zkLink?

zkLink is a multichain Layer 2 network centered on trade, with consolidated liquidity backed by ZK-Rollups. zkLink develops a ZK-Rollup middleware that seamlessly integrates with many L1 and L2 networks, offering a range of advanced APIs. The middleware facilitates developers deploying trading dApps with extensive customizability and access to pooled liquidity. At the same time, end users enjoy a smooth multichain trading experience. Additionally, zkLink facilitates issuing and bridging OFT (Omnichain Fungible Token).

zkLink employs zero-knowledge technology to facilitate multichain interoperability through a trustless and decentralized separation of powers framework, ensuring the security of assets, transactions, and multichain data transfers. Furthermore, zkLink resolves the inconsistencies among stablecoins across various blockchains and types, facilitating multichain liquidity aggregation to create a substantial stablecoin liquidity pool through a distinctive protocol-controlled debt (PCD) mechanism. Thus, zkLink provides a capital-efficient, cost-effective, and accessible infrastructure.

Background of zkLink

zkLink was established in 2021 by Vince Yang and is headquartered in Singapore. Yang is a former engineer and Bitcoin holder who began investigating the potential of blockchain and zero-knowledge proofs after commencing Bitcoin mining. Under the leadership of Vince Yang, zkLink Labs has obtained $23.1 million from private investors and successfully conducted a community sale to finance the development of zkLink. On March 11, 2024, zkLink Nova’s Layer-3 public mainnet was launched, accommodating nine networks, including Ethereum. It provides users and developers an interoperable platform integrating liquidity and assets from Ethereum Layer 2 solutions. Since its inception in early March 2024, zkLink Nova has garnered approximately $300 million in total value locked (TVL), indicating a prospective need for a comprehensive general-purpose L3 platform. zkLink has 34 investors, including noteworthy entities such as Chain Capital (Shanghai), Coinbase Ventures, OKX Ventures, and Cloud3 Ventures.

zkLink’s Investors

Features of zkLink

Native Asset Aggregation

• Multichain Token Listing and Trading: Decentralized applications developed on the zkLink protocol may list and trade tokens across several Layer 1 and Layer 2 networks, encompassing fungible and non-fungible tokens, without the necessity of a bridge to reduce cross-chain risks and fees.
• Multichain Token Portfolio Management: zkLink offers a unified wallet functionality for managing multichain portfolios akin to a centralized exchange.

Liquidity Aggregation

• Token Merge: Utilizing zkLinks, tokens of identical types issued across many chains are consolidated into a singular token, facilitating a seamless multichain user experience similar to that of a centralized exchange, however devoid of counterparty risk. For example, USDT ERC20, USDT SPL, and USDT BEP20 will be consolidated into a singular token (USDT) within the zkLink rollup network.
• Stablecoin Liquidity Unification: Using USD as a single pricing currency within the zkLink system eradicates inconsistencies among fiat-backed stablecoins across various networks. The automatic conversion from designated stablecoins (USDC, USDP, BUSD, and others) to USD is optional for decentralized applications.

Application-specific Zero-knowledge Circuit

The zkLink protocol’s zero-knowledge circuit is tailored to provide exceptional performance (above 1000 TPS) for order book trading, addressing the requirements of high-frequency traders and on-chain products. zkLink was designed for developers to select the networks to link, determine where to use DA, and modify certain functionalities. zkLink aspires to achieve great efficiency by utilizing app-specific circuits, which are significantly smaller than general-purpose zk circuits, reducing computational resources and on-chain gas consumption.

zkLink’s Interoperability Solutions

Despite the substantial value generated by the multichain landscape for DeFi, the absence of interoperability has resulted in fragmentation and inefficiencies within the ecosystem. The advent of next-generation ecosystems has led to the creation of diverse liquidity silos. This situation presents considerable difficulties for users in managing assets or executing transactions independently across many chains. This has resulted in navigation complexity marked by a cumbersome procedure requiring interaction with several networks, incurring gas fees, and presenting a challenging user experience.

The security risks associated with inter-chain transactions are the primary inefficiencies resulting from the absence of interoperability. Maintaining asset security during chain-to-chain transactions presents a significant technical barrier in cross-chain operations. Bridges have become the most vulnerable element of trading; even without a bridge, many chain-interoperability protocols rely on multi-signature committees to validate state changes and cross-chain statuses, increasing the risk of assaults.

In response to the challenges and inefficiencies in the multichain DeFi ecosystem, zkLink seeks to fulfill the increasing demand for a secure, user-friendly, and comprehensive infrastructure that consolidates assets and liquidity across multiple chains by leveraging advanced zero-knowledge-proof technologies. Concerning chain interoperation solutions, zkLink presents potential solutions to the issues arising from the absence of interoperability.

Security

In the contemporary blockchain landscape, security remains the paramount concern. Liquidity suppliers must be assured of the safety of their funds. At the same time, traders must be confident in obtaining the appropriate quantity of tokens. zkLink has completed its second security audit of smart contracts and circuits, which ABDK Consulting undertook. ABDK specializes in the zero-knowledge domain and has performed more than 40 audits of blockchain projects, including zkSync. CertiK completed the initial audit cycle in 2021, achieving a score of 91.49%. The initial audit conducted by Certik encompassed an evaluation of the code, fundamentals, operations, governance, market dynamics, and community aspects.

zkLink Audit by Certik

Compatibility

Most chain-interoperation protocols exclusively support EVM, whereas consumers require a more versatile solution in an environment encompassing both EVM and alternative infrastructures. Due to ZK-Rollup, the sole requirement for a qualifying chain to link to zkLink is the ability to validate zero-knowledge proofs, indicating that zkLink can accommodate any chains capable of executing smart contracts.

Cost-effective

As a variant of the ZK-Rollup solution, zkLink is inherently designed for scalability, leading to reduced transaction expenses. As a multichain ZK-Rollup, zkLink possesses enhanced flexibility in selecting an appropriate L1 to satisfy data availability requirements.

zkLink Architecture

zkLink X is a multichain ZK-Rollup infrastructure consisting of four layers: the settlement layer, the execution layer, the sequencing layer, and the data availability layer. The four layers are detached to facilitate configurable app rollup deployment. The primary value proposition and the majority of innovations of zkLink X pertain to execution layer solutions and settlement layer solutions.

Sequencing Layer

The sequencing layer is a crucial element of roll-up systems, tasked with accepting user transactions, sequencing them, and aggregating them into batches. The batches are subsequently committed to the settlement layer. Furthermore, when the system utilizes an external DA layer, the sequencer guarantees the effective transfer of transaction data to the DA layer. Like other rollups, App Rollups will initially employ a centralized sequencer paradigm. This technique provides development efficiencies but also introduces obstacles and hazards, including potential single points of failure, transaction filtering, and concerns over miner extractable value (MEV), which impact network fairness and transparency.

To mitigate these issues, zkLink X intends to integrate decentralized sequencer solutions. These systems, such as Espresso, Astria, and Fairblock, seek to alleviate centralization problems by processing and validating transactions inside a distributed node network. This plan will enhance network security and transparency while providing a safer, more equitable, and more efficient roll-up solution for its users.

Execution Layer

The execution layer involves performing transactions that accurately update the state. Consequently, execution must guarantee that only legitimate transactions are processed, specifically those that yield proper state machine transitions.

Settlement Layer

A conventional ZK-Rollup network often designates a singular chain, such as Ethereum, as the proof verification and transaction settlement layer. The settlement layer ensures the security and integrity of off-chain transactions. To safely consolidate liquidity and native assets across Layer 1 and 2 networks, zkLink presents two novel settlement layer deployment solutions paradigms within its rollup infrastructure framework: zkLink Nexus and zkLink Origin.

zkLink Nexus L3 rollup finalizes transactions and state transitions on Ethereum’s L2s, settling on Ethereum. The smart contract on Ethereum is essential for verifying the consistency of sync hashes from several rollups. Nexus rollup transmits data and zero-knowledge proofs to the associated L2s, where the verifier contract validates the accuracy of the states and transactions.

Security inheritance of zkLink Nexus

Unlike Nexus, zkLink Origin’s architecture facilitates integration with Alt-L1s. A zkLink Origin rollup will finalize transactions and state transitions across all connected chains, provided that at least one network (designated as the primary chain) facilitates zk-SNARKs proof verification and that there exists a safe and efficient method for state synchronization among the networks.

Data Availability (DA) Layer

Data availability (DA) involves ensuring the accessibility of transaction data. The DA layer is essential for rollups to facilitate the reconstruction of rollup states in the event of an unexpected service interruption. Both zkLink Nexus and zkLink Origin inherently utilize the primary chain as the data availability layer.

Nexus and Origin endorse Validium, which incorporates an external data availability solution. To address developers’ varied requirements, zkLink will incorporate multiple third-party modular data availability systems, including Celestia, EigenDA, and Avail. Additionally, the zkLink DAO may establish a Data Availability Committee (DAC). This DAC offers developers an alternative and ensures supplementary data availability assurance.

zkLink Technological Solutions

zkLink seeks to integrate Layer 2 and Layer 1 solutions, improving the user experience and ensuring secure decentralized application development with zero-knowledge proofs (ZKP). zkLink provides two primary solutions: zkLink Nova, a universal Layer 3 designed to tackle Ethereum’s liquidity and asset fragmentation issues, and zkLink X, a specialized scaling engine that facilitates tailored multichain decentralized application development by linking Layer 2 and Layer 1.

zkLink Nova Bridge

A “zkLink Nova bridge” denotes a cross-chain bridge built on the zkLink Nova network. This Layer 3 scaling solution employs zero-knowledge proofs (ZKPs) to facilitate seamless asset transfer and interoperability among various Ethereum Layer 2 networks. It effectively consolidates liquidity across multiple L2s, enabling users to trade assets without individually transferring them between chains; it essentially functions as a “bridge between bridges” for Ethereum’s L2s.

The function lets users transfer assets across several Ethereum Layer 2 networks without reverting them to the Ethereum mainnet first. It also enables users to utilize ZK-SNARKs (a form of zero-knowledge proof) for secure, privacy-enhancing cross-chain transactions. It also functions as a Layer 3 network atop current Ethereum Layer 2s, offering enhanced scalability and interoperability.

zkLink Nova

zkLink Nova is an EVM-compatible, open platform designed to efficiently and rapidly create various smart contracts. The zkLink Nova platform enables aggregating dispersed assets across Ethereum Layer 2s for interoperable transactions. zkLink Nova is fortified by zero-knowledge proof technology, incurs minimal gas fees, provides rapid finality, and derives its security from Ethereum.

zkLink is the inaugural aggregated Layer 3 zkEVM network, integrating Ethereum and its Layer 2 rollups. zkLink Nova offers superior security with zero-knowledge proof and features outstanding composability, interoperability, and scalability. Its modular architecture consists of four levels.

Sequencing

The zkLink team manages the sequencers; however, this does not imply that zkLink is a centralized project. The sequencing layer oversees on-chain deposits into the L3’s smart contracts, preserves the L3’s state, and coordinates processing and proof generation transactions.

Execution

Transactions that modify the L3 state are conducted on this layer. zkLink Nova processes transactions using the zero-knowledge Ethereum Virtual Machine (zkEVM) from the ZK Stack. The zkEVM provides a secure execution environment for zkLink Nova’s smart contracts, verifying every step of the program’s execution with ZKPs.

Settlement

zkLink Nova’s proprietary settlement framework, zkLink Nexus, enables settlement across multiple L2s and Ethereum, unlike traditional ZK-rollups that settle on Ethereum. Thus, the L3 may effectively consolidate all user deposits into its smart contracts on alternative L2s without recalculating proofs. Thanks to its stack-agnostic nature, zkLink Nova can connect to all Ethereum L2s regardless of technology stack (e.g., ZK or OP L2s).

Data Availability (DA)

Transaction and state transition information is available on the data availability layer. Currently, zkLink functions as a validium, maintaining transaction data off-chain through a Data Availability Committee (DAC). The DAC maintains a copy of the L3’s transaction data and its state history, storing transaction data cost-effectively, especially for ZK-rollups that also incur proof verification costs.

zkLink X

zkLink X is an application-specific engine for deploying high-performance applications (e.g., financial applications like AMMs and DEXs) across multiple networks. Interoperability between different L1s and Ethereum L2s continues to improve with the emergence of cross-chain bridging solutions attempting to connect these networks. Yet, users must still face the challenge of moving and managing assets across these diverse networks with different technology stacks and tooling.

zkLink X streamlines the dApp development process and offers developers a unified point for deploying applications with access to extensive liquidity across multiple networks. It enables dApp users to easily access, trade, and manage their assets across L2s and L1s through a single capital-efficient platform. zkLink X is a modularized deployment solution that allows developers to easily customize apps across execution, settlement, DA, and sequencing layers for diverse application needs. Hence, developers can deploy high-performance applications and customize the above components by:

• Leveraging decentralized sequencers like Espresso, Astria, and Fairblock.
• Executing transactions using zkLink’s proprietary trading-specific zkVM, designed for high-performance financial products like CLOB, AMMs, and DEXs.
• Setting transactions to either of zkLink X’s proprietary settlement frameworks: Nexus or Origin. With Nexus, transactions can be settled on Ethereum and its L2s, whereas Origin enables settlement on alternate L1s like Avalanche or Solana. Additionally, Nexus verifies the transaction state across all connected L2s with multichain state synchronization. In contrast, Origin verifies the same across all connected L1s and L2s via a Light Oracle Network.
• Utilizing external DA solutions like Celestia and Eigen DA to store transaction and state data.

zkLink Automated Market Maker (AMM)

A zkLink AMM denotes an Automated Market Maker (AMM) constructed on the zkLink platform, employing zero-knowledge proofs (ZKPs) to facilitate secure and scalable decentralized trading capabilities. This enables users to exchange cryptocurrencies across various chains with substantial liquidity aggregation while preserving privacy via ZKP technology. It functions as a decentralized exchange where users can trade assets directly from liquidity pools overseen by smart contracts, supported by zkLink’s privacy-centric infrastructure.

zkLink x Multi-Chain AMM DEX offers an enhanced multi-chain user experience featuring heterogeneous token exchanges secured by zero-knowledge proof technology. It is a comprehensive, multi-chain swap decentralized exchange (DEX) that includes liquidity pairs composed of native tokens from various blockchains.

Features of zkLink Automated Market Maker

• ZKPs for Privacy: This is the principal characteristic of utilizing ZKPs. This cryptographic method allows users to demonstrate the legitimacy of transactions without disclosing confidential information regarding their assets or trading activities.
• Multi-chain liquidity: zkLink AMMs seek to consolidate liquidity from several blockchains, enabling users to exchange assets across diverse networks effortlessly.
• Scalability: Utilizing ZKPs, zkLink may attain elevated transaction throughput and reduced fees relative to conventional DEXs.
• Developer-oriented: The platform offers tools to seamlessly integrate developers’ decentralized applications (dApps) with zkLink’s automated market maker (AMM) capabilities.

Orderbook DEX

A zkLink order book denotes the digital compilation of buy and sell orders for a cryptocurrency on the zkLink decentralized exchange (DEX), employing zero-knowledge proofs (zk-SNARKS) to guarantee privacy and security while preserving a conventional order book trading methodology, in contrast to numerous other DEXs that depend on automated market makers (AMMs). In contrast to several DeFi DEXs utilizing AMMs, zkLink functions with a conventional order book, allowing users to view bid and ask prices at various levels. The feature prioritizes privacy, as zk-SNARKS technology enables users to execute trades without disclosing their order specifics to other market participants, augmenting confidentiality.

zkLink’s Token (ZKL) Utility

ZKL is the native utility token and governance token of the zkLink protocol. ZKL grants users access to zkLink’s rollup infrastructure service and grants tokenholder governance over the zkLink project. The asset’s functions include:

• Staking: Provers can stake ZKL to access zkLink’s proof generation market, where dApps request proof generation services. Subsequently, provers can earn ZKL rewards for completing these tasks.
• Payments: ZKL is the primary payment token for zkLink’s proof-generation market. dApps leveraging zkLink’s rollup infrastructure will pay provers in ZKL for ZKP generation services. Governance: Through a future ZkLink DAO, ZKL token holders will exercise governance rights over the direction and development of zkLink.

zkLink Governance

zkLink DAO is a decentralized organization that governs zkLink. It enables users to make decisions that benefit the zkLink ecosystem. zkLink was established on the principle that any user, regardless of location, may access the advantages of blockchain technologies. Given the extensive and varied user base, there are expected to be divergent and occasionally contradictory needs. Due to this, zkLink advocates for DAO governance to attain Pareto optimality for zkLink. This strategy ensures widespread adoption of blockchain technology, enabling the general populace to experience its advantages fully. Users throughout the ecosystem may engage in governance. ZKL tokens provide voting on zkLink DAO governance ideas, enabling ZKL holders to collectively influence the future of zkLink.

ZKL Token Distribution

ZKL launched with a maximum token supply of 1 billion without inflation. The token’s allocation is as follows:

• Community Treasury (29.875%)
• Ecosystem development (22.5%)
• Early Private Purchasers (20.5%)
• Team and Advisors (20.00%)
• Liquidity Reserve (4%)
• CoinList Sale (3.125%)

Conclusion

As Ethereum’s ecosystem becomes increasingly intricate with the gradual introduction of additional Layer 2 solutions, innovations such as zkLink and its Layer 3 are essential for optimizing the user and developer experience on Layer 1. Furthermore, the emergence of other Layer 1 blockchains exacerbates fragmentation within the blockchain ecosystem, highlighting the necessity for capital-efficient multichain applications. zkLink seeks to resolve fragmentation issues using zkLink Nova, its versatile Layer 3 solution, and zkLink X, its tailored application-specific scaling engine.