After a short break, gas prices rise again enormously.
As the demand for Ethereum scaling reaches critical mass, the number of decentralized finance projects and internet firms investing in Layer 2 solutions is increasing.
A Series A financing round for the Layer 2 scaling protocol zkSync from Matter Labs has now been announced. The aim is to bring the smart contract language Solidity to the platform.
The round was led by some big names in the crypto and internet security industries – including early Twitter investor Union Square Ventures (USV), Cloudflare, Firebase, Twilio, MongoDB, and Coinbase.
Matter Labs first released its Layer 2 product in December 2019 after raising an undisclosed amount.
Layer 2 comes to life
zkSync speeds up Bitcoin Champion transactions by using zero knowledge rollups to stack transactions and process them from the root chain. It also offers security guarantees that are comparable to a normal layer 1 smart contract.
According to the announcement, security will be a big factor for users.
„The crypto community will strongly prefer solutions with the least compromise in security, decentralization and UX.“
The zkSync ecosystem can grow without limits by using the compositional ability and the composing network effects. This is important for protocols like Aave, Balancer and Curve, which are already worth billions of dollars.
zkSync has already processed over 1.1 million transactions and is integrated with a number of dApps and platforms such as Golem, Numio, StablePay and Storj.
Matter Labs is planning further integrations into large wallets such as those from Coinbase and Huobi and adds that it could become the main payment backbone of Ethereum ( see Buy Ethereum Instructions ).
„All users will also be able to create and possibly top up their accounts directly from exchanges or on-ramp services (for example Coinbase, Huobi, Binance, Ripio or Moonpay) without a single L1 transaction.“
Investments from the seed round are to be channeled to create Turing-complete smart contracts with Solidity to zkSync through its own Zinc programming framework. The blog post states that the public test network for smart contracts on zkSync will be available in a few months.
Gas charges are rising again
The gas fee respite didn’t last long – transaction costs are on the way back up. As major crypto assets begin to show signs of recovery from last week’s correction, average transaction fees have also increased.
According to BitInfoCharts, the average Ethereum transaction fee is $ 13, which is well below the high of $ 40 last week, but is still going in the wrong direction.
Even at these levels, microtransactions on the network are unprofitable, which makes the demand for Layer 2 payment channels such as zkSync even greater and makes many users look out for alternative platforms such as the Binance Smart Chain .