ZK Stack's Arrival: How Holdstation Plans for This Revolution

ZK Stack's Arrival: How Holdstation Plans for This Revolution

The Current State of zkSync

The highly anticipated Ethereum ‘Decun’ upgrade, poised to be the most significant update since early 2023, is nearing its release. Recently, it went live on the second of three test networks. A key feature of this upgrade, ‘proto-danksharding’, promises to drastically reduce data availability costs. This is set to benefit Layer 2 (L2) networks, potentially leading to significantly lower fees.

Among these L2 networks, zkSync Era stands out technically. It boasts the highest Transactions Per Second (TPS) rate among L2s, averaging 14 TPS daily. Furthermore, zkSync leads in the total number of transactions executed over a 30-day period, surpassing other L2 networks and even Ethereum itself.

Source: L2Beats

In addition to its technical prowess, zkSync Era is having an advantage in network fees and active addresses. Over the past 30 days, zkSync Era’s total active addresses have exceeded 3.1 million, marking a 41% increase in the last six months. The network’s transaction costs are equally impressive, with an average of only $0.1 per transaction in the last 30 days—a 54% decrease compared to the previous 6 months.

Source: Growthepie

Given these advancements, zkSync Era is well-positioned to emerge as a leading L2 platform, combining the best features from various blockchain technologies.

The Revolutionary Technology - ZK Stack

Beyond its current performance, zkSync Era is taking a significant step forward to solidify its position as a technology leader with the launch of ZK Stack. This move positions zkSync to directly compete with the existing OP Stack and the developing Arbitrum Orbit.

What is ZK Stack?

ZK Stack is a modular framework that developers can use to build their own customizable, sovereign blockchains known as Hyperchains. These Hyperchains can be either Layer 2 or Layer 3 solutions, built on top of the Ethereum blockchain and powered by zero-knowledge proofs (ZKPs) technology.

In short, ZK Stack provides the tools and infrastructure to empower developers to build specialized blockchain networks tailored to their specific needs and use cases. The final product - Hyperchain will inherit the ability to perform better, seamlessly connect with each other, and be more privacy-focused.

Why ZK Stack Better?

The development of ZK Stack marks a pivotal move for zkSync, positioning it to rival major L2s like Optimism's OP Stack.

Below, we compare the current capabilities of ZK Stack against OP Stack. Please note that some data are still being refined and should not be taken as final.

Source: Holdstation Research

Here are some points to consider:

  • Technology: ZK Stack is currently the first modular framework that is developing with Zero-knowledge proof (ZKPs)
  • Decentralization: Both platforms aim to be decentralized, but ZK Stack offers a higher degree of customization and potentially greater control for individual Hyperchains.
  • Privacy: ZK Stack has the advantage of enhanced transaction privacy compare to OP Stack
  • Community: OP Stack has a larger and more established community than ZK Stack, which is still growing.
  • Transaction fees: Both ZK Stack and OP Stack offer significantly lower fees than the Ethereum mainnet. However, ZK Stack fees are now proving to be lower than OP Stack's established fee structure.

Current Market

The OP Stack has recently proven its reliability and performance, garnering trust from large entities. Notably, it powers Base, an Ethereum L2 developed by Coinbase, and opBNB, a Binance Chain-specific L2 solution. Additionally, its adoption by prominent names like Worldcoin, Debank, and Mantle reinforces its status as a 'Superchain' - recognized for its effectiveness, open-source nature, and established presence. The OP Stack remains competitive with ongoing 'Bedrock' updates and the integration of innovative features, such as RISC Zero's ZK proofs for faster withdrawals.

ZK Stack is still under development. This poses a challenge but also presents an opportunity for ZK Stack to outperform, at least on paper, and eventually compete directly with OP Stack and Arbitrum Orbit. The market's vast potential still leaves ample room for growth and competition.

Holdstation Adoption of ZK Stack

Current Technological State

Holdstation, a native non-custodial wallet designed for future trading on zkSync, places a strong emphasis on innovative technologies such as Account Abstraction (AA) and ZK Stack. In terms of leveraging native Account Abstraction on zkSync, Holdstation is excelling within the zkSync blockchain ecosystem.

A key feature of AA, Paymaster, has recently seen significant growth with the addition of Orbiter to the Holdstation Paymaster Alliance, joining other prominent supporters like Syncswap, Mute.io, and Velocore. These projects, being OGs on zkSync and influential within the ecosystem, make their support a notable milestone for Holdstation, as it aims to lead in the Paymaster feature and expand its reach across the ecosystem.

In applying the ZK Stack, Holdstation, always keen on innovative features, is eager to integrate this advanced infrastructure into its products. During the latest AMA with zkSync, Holdstation revealed its V2, which includes new features and implementations.

The incorporation of ZK Stack in Holdstation V2 is expected to significantly reduce gas costs and increase TPS, facilitating the development of additional products like trading bots and enhancing user experience.

"Our implementation of ZK Stack in Holdstation V2 aims to create a more CEX-like experience, reducing gas costs and increasing TPS, which will be a game-changer for us" - said Trung Banh, Co-founder of Holdstation, in 'Beyond Borders: Holdstation's Grand Ambitions Fueled by zkSync's Support' AMA.

Adaptation of ZK Stack to the Holdstation Ecosystem

Looking at the bigger view, Holdstation Potential ZK Stack adaptation could be:

  • Leveraging ZKPs: ZK Stack's core technology, zero-knowledge proofs (ZKPs), could enhance Holdstation's already strong privacy features. Integrating ZKPs could further obfuscate transaction data without compromising its validity, offering even greater privacy for users. This is particularly beneficial given Holdstation's use of multisigs for managing funds and asset pools.
  • Customizable Hyperchains: ZK Stack's modular design allows building specialized Hyperchains. Holdstation could create a dedicated Hyperchain tailored for its specific needs, optimizing functionality and user experience within the DeFi context.
  • Interoperability with Other Hyperchains: ZK Stack's Hyperbridges enable communication between different Hyperchains. This could allow Holdstation to connect with other ZK Stack-based applications, expanding its functionalities and user base.
  • Advanced Smart Accounts: With ZK Stack's flexibility, Holdstation could potentially push the boundaries of Smart Accounts by implementing even more sophisticated features like programmable transactions and automated investment strategies, complementing the launch of its Trading Bot, as previously mentioned.

Looking Forward

Integrating ZK Stack into Holdstation presents enormous opportunities for heightened privacy, customization, and interoperability. However, this move requires a careful evaluation of its technical complexities, the nascent stage of ZK Stack development, and ongoing security considerations. Notably, Holdstation currently operates on the zkSync Era network, another Layer 2 solution leveraging ZKPs. A pragmatic strategy might involve fully harnessing zkSync's capabilities before transitioning to ZK Stack.

As both ZK Stack and Holdstation evolve, the feasibility and appeal of such an adaptation are likely to shift. Keeping abreast of their developments will be key to making well-informed decisions in the dynamic landscape of blockchain technology.