zkSync Unveils Final Protocol Upgrade in Anticipation of Token Launch

zkSync, an Ethereum Layer-2 network, has achieved a pivotal milestone in its journey towards decentralization with the upcoming release of its final protocol upgrade, v24. This significant update is poised to transfer network governance to the community, signaling the culmination of zkSync’s decentralization process and potentially heralding the launch of a governance token.

Achieving Full Decentralization

Since incorporating EIP-4844 in March, zkSync has been steadfast in its pursuit of full decentralization. The impending v24 release represents the last essential upgrade required for this transition. The company anticipates completing all remaining steps by the end of June. This meticulous process demands careful consideration of both technological and legal frameworks, as zkSync prioritizes long-term technological development over immediate gains. The aim is to establish itself as a pivotal player in the blockchain industry, driving the advent of a verifiable internet era that can serve billions of users.

The announcement of the v24 upgrade has ignited speculation regarding a possible token launch. zkSync has hinted at an upcoming governance token airdrop slated for the end of June. This potential airdrop has been eagerly anticipated since last year when investors moved over $8 million worth of tokens to zkSync, hoping to qualify.

Currently, the total value locked (TVL) in zkSync is $141 million, according to DefiLlama. In a recent post on the X platform, zkSync confirmed that the v24 release will be the final protocol upgrade before transferring network governance to the community, with the remaining components expected to be completed by the end of June.

Scaling Ethereum with Zero-Knowledge Rollup Technology

zkSync, which specializes in zero-knowledge (ZK) rollup technology, aims to scale Ethereum by facilitating cheaper transactions through off-chain computation and data storage. This Layer-2 network leverages zero-knowledge cryptography, a cutting-edge advancement in blockchain technology.

The issuance of a governance token is viewed as the next logical step following a series of airdrops from projects like EigenLayer, Renzo, Ethena, and Wormhole, which have chosen to reward early adopters instead of conducting traditional token sales. This strategy is designed to cultivate a sense of loyalty and involvement within the community.

Matter Labs, the company behind zkSync, has secured $458 million from investors including Blockchain Capital and Dragonfly Capital. This financial support is intended to bolster zkSync’s mission to develop scalable and efficient blockchain solutions. In April, Circle, a major stablecoin issuer, extended support for its USD Coin (USDC) to Ethereum’s zkSync.

This integration allows USDC to be utilized on a scalable platform, enhancing its application across various decentralized finance (DeFi) protocols. USDC on zkSync remains redeemable on a one-to-one basis for U.S. dollars through Circle and can be transferred across chains via cross-chain bridges. 

Surpassing Ethereum in Transaction Volume

zkSync has recently exceeded Ethereum in monthly transaction volume, processing over 35 million transactions in the last 30 days, compared to Ethereum’s 34.2 million and Arbitrum One’s 31.4 million. This surge in activity is largely driven by the growing popularity of zkSync’s inscriptions, which witnessed a record 5.3 million transactions in a single day following the launch of its sync inscription. This increase in transaction volume has occasionally led to network congestion, highlighting both the demand for zkSync’s services and the challenges of scaling.

Furthermore, the total value locked (TVL) in zkSync has surpassed $500 million, marking a 12% increase in just one week. This significant rise in TVL underscores the network’s growing popularity and the confidence investors have in zkSync’s scaling solutions. The network’s capability to handle high transaction volumes and its expanding ecosystem of decentralized applications position zkSync as a leading Ethereum Layer-2 solution.