If you’ve been in the cryptocurrency market for a while, you’re probably familiar with concepts like ZK, or Zero-Knowledge Proof. But what is Zero-Knowledge Proof (ZK)? Why has it attracted such strong interest after being around for a while? Will the ZK trend last, or is it just a “flash in the pan”? What are the best ZK-based coins? Let’s explore the “ZK narrative” through the content shared in this article.
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What is Zero-Knowledge Proof (ZK)?
Zero-Knowledge Proof (abbreviated as ZK or ZKP) – a cryptographic technology, allows one party to prove to another (the verifier) that they know a value x, without revealing any information beyond the fact that they know x.
A simple example to help you visualize how Zero-Knowledge Proof (ZKP) works:
- A goes into a liquor store and buys alcohol, the seller asks to see A’s ID to check if he is old enough to buy alcohol.
- A says, “I can prove that I am over 18, but I won’t show you my ID.”
Somehow, A proves that he is over 18 without showing his ID to the seller.
In general, ZKP provides both flexibility and choice for users who want control and freedom over their information. If we combine blockchain technology with ZKP, there are many use cases to discuss.
In the cryptocurrency market, ZK-Rollups are one of the biggest applications of ZKP technology, serving as a Layer 2 scaling solution to improve some of the current blockchain bottlenecks, especially Ethereum. ZK-Rollups aggregate large amounts of Ethereum transaction data into batches and process them off-chain, then push the final results on-chain.
This helps increase transaction speed, reduce gas fees, and optimize application efficiency. This solution is also believed by Vitalik Buterin to outperform Optimistic Rollups and become the long-term future for Ethereum.
Why is ZK receiving so much attention?
So, what stage has the development of this technology reached? In fact, ZK technology is quite complex, and although it has been around for many years, it is still in its infancy. This shows that the ZK trend is not yet strong at this stage, but it is not an overhyped trend. ZK has the potential to grow in the future, and just a chance or any positive news could cause a strong price surge in ZK projects.
What specific catalysts have recently spurred the rise of ZK? The recent fever can be explained by the following three reasons:
- Token release plans from two major Layer-2s, zkSync and Starknet, which are highly anticipated by the community.
- In addition, Polygon’s zkEVM technology is actively developing and has been deployed.
- CZ’s post about applying zk-SNARKs to the Binance PoR verification system.
Improving transparency is an on-going effort. This new system PoR with zk-SNARK is @VitalikButerin's idea (or suggestion). We implemented it now. Keep building. https://t.co/ijVVeF7KQl
— CZ ???? BNB (@cz_binance) February 10, 2023
Top 10 Zero Knowledge Proof (ZK) Coins 2024
As I mentioned above, the ZK trend is not fleeting, especially since ZK has proven its importance, and many major platforms are using this technology. Therefore, you can refer to some Zero Knowledge Proof (ZK) Coins, including:
Apart from the classification as shown in the image above, we will categorize them into two types: tokens already released & tokens not yet released
Group of ZK-based projects that have released tokens
These are projects/coins using ZK-Rollup, which have released tokens, listed on some exchanges so you can easily buy and trade them:
Mina Protocol (MINA)
Mina is known as the world’s lightest blockchain (only 22KB compared to the average size of about 300GB+), and currently uses zk-SNARKs combined with Proof-of-Stake, making it highly scalable. Moreover, this blockchain is invested in by major funds like Polychain Capital, Coinbase, etc.
Over 90% of the total supply of MINA is staked, nearly all tokens for backers and core contributors (45% tokenomic) have been distributed, and the next unlock is in 2024, so there will be no strong selling pressure in 2023. Upcoming catalysts include:
- Launching a developer attraction program to expand the ecosystem.
- Releasing zkBRIDGE to Ethereum (Q1/2023) and zkOracles (Q2/2023).
Loopring (LRC)
The Loopring platform is an open-source decentralized exchange and payment protocol. Built on the Ethereum blockchain, it uses ZK-Rollups to provide fast, low-fee transactions for users. With the growing demand for DEXs, LRC is a ZK coin that could benefit from both DEX and ZK trends.
Recently, the platform’s user base has been well maintained and is trending upwards. The upcoming implementation of LRC Staking on Loorpring L2 is good news for supply reduction and project operation assurance.
Immutable X (IMX)
Immutable X (IMX) is a layer2 scaling solution integrating Starkware’s zk-Rollups technology, optimized for NFT transactions. Many Web3 and gaming projects are being developed on the IMX ecosystem, including Illuvium Universe, Kongregate, and Immutable X also serves as GameStop’s NFT marketplace – a currently very famous game studio.
The current total supply of IMX is 2 billion tokens. The token will continue to unlock, so this is a point to note. One of the next major upgrades to help IMX become a potential ZK coin is the collaboration with StarkNet to launch the Cross-Rollup NFT Liquidity platform.
Polygon (MATIC)
Polygon is the most famous Ethereum Layer2 solution today, with TVL ranking second among Ethereum Layer 2s. The DeFi puzzle on Polygon is nearly complete with over 300 different platforms such as Uniswap, Aave, Gamma Strategies, Gains Network, etc. With fast transaction speeds and low gas fees, the NFT sector on Polygon is thriving, with many major projects from Solana like DeGods and y00ts moving to this Layer. Additionally, famous brands like Starbucks, Meta, Disney, Reddit, etc., also choose Polygon for their blockchain services.
Tokens allocated for investment funds were unlocked 100% earlier this year, so it’s unlikely that there will be any major upcoming supply. A strong catalyst eagerly awaited for Polygon is the zkEVM technology, set to mainnet in 2023. It combines the best features of ZK with the scalability and ease of integration into the EVM ecosystems.
dYdX (DYDX)
DYDX is a DEX focused on margin trading, using Zk-Rollup on StarkEx blockchain to enable trading of ERC20 tokens with up to 10x leverage. The DYDX team includes experienced engineers and financial traders striving to build the most user-friendly and robust margin trading experience.
DYDX makes margin trading easy, with all the benefits of decentralized exchanges. With DYDX, you can trade directly from your wallet, and all transactions are settled on the Ethereum blockchain. DYDX leverages StarkWare’s STARK proof for data integrity to ensure it is a fully non-custodial DEX.
Currently, DYDX is known as one of the most famous DeX platforms. Therefore, like Loopring, dYdX will benefit from both DEX and ZK market trends. Thus, it is definitely a ZK coin you should consider for your watchlist.
Dusk Network (DUSK)
Dusk Network is a private Blockchain for financial applications. A new standard in compliance, control, and collaboration. Dusk Network’s mission is to enable businesses of all sizes to cooperate on a large scale, meeting compliance requirements and ensuring that personal data and transactions remain secure.
Dusk Network applies a ZK Proof (ZKP) system called PlonKup aimed at data protection. Its target customers are primarily businesses and individuals with data storage needs.
MUTE (MUTE)
Mute will be a decentralized exchange using zero-knowledge cryptography to allow quick, private transactions among users. Mute, emerging in March 2021, has already made a name in the ZK-Rollup field.
MUTE is currently being tested on the zkSync 2.0 testnet and will soon launch its mainnet simultaneously with zkSync 2.0. With a small market cap and all tokens already issued, it is one of the best-performing ZK coins (~x3) in the recent wave.
Syscoin (SYS)
Syscoin is a layer1 blockchain providing blockchain services like token issuance security, DEX, digital certificates, etc., with a PoW consensus mechanism combined with Merge Mining. It is also known for allowing miners to simultaneously mine both Bitcoin and Syscoin, a concept known as merged mining. Syscoin itself can be staked to earn rewards, and in the future, users will likely need Syscoin to pay transaction fees.
Another interesting aspect of Syscoin is its ZK-Rollups. Using ZK, Syscoin will be able to process more transactions on its network and provide better interoperability with other networks. Combining Syscoin and ZK-Rollups makes Syscoin a very unique project. According to the development roadmap, Syscoin’s Layer 2 rollups – Rollux – are set to mainnet this year after several rounds of testing.
ZK System Projects NOT Yet Tokenized
Besides the names mentioned above, there are many projects applying ZK-rollup, but currently, they do not have plans for token issuance. However, most of them are highly rated platforms, and it’s anticipated that they will launch tokens this year. Therefore, keep an eye on these platforms, as their token launch and listing will likely be a strong catalyst for another surge in ZK coins.
zkSync
zkSync is an Ethereum Layer 2 using zk-Rollups technology, and it has received over $450 million in investment from major market funds such as a16z, Dragonfly, Lightspeed, etc. Currently, about 150 projects are being built on zkSync, most of which are still in the Beta or Pre-mainnet stage.
The next big step for zkSync is the mainnet launch of zkSync 2.0 with many new features and an upcoming token release.
Starknet
Starknet is also an Ethereum Layer2 product developed by StarkWare using zk-Rollups technology. Previously, it successfully raised over $285 million from renowned investment funds like Paradigm, Sequoia, Ethereum Foundation, Pantera, etc.
This project deployed the $STRK token in November 2022 but has not yet conducted a public sale ($STRK is currently not circulating in the market, so be careful to avoid buying scam tokens). It’s expected that the STRK token will be officially released soon, which could be a boost for this ecosystem.
Starknet
Starknet is also a Layer2 product of Ethereum developed by StarkWare using zk-Rollups technology. Previously, it successfully raised over $285 million from well-known investment funds like Paradigm, Sequoia, Ethereum Foundation, Pantera, etc.
This project deployed the $STRK token in November 2022 but has not yet started a public sale ($STRK is currently not circulating in the market, so be cautious to avoid buying scam tokens). It is expected that the STRK token will officially be released soon, which could be a boost for this ecosystem.
Scroll
Unlike StarkNet and zkSync, Scroll is a Layer2 zkRollup version based on zkEVM technology, valued at $8 billion, ranking fourth among other Layer2s. Currently, Scroll is still in the testnet phase and is likely to airdrop tokens after mainnet. You can look up information about Scroll’s airdrop to participate.
Aztec
Aztec is a protocol providing privacy and security for dAPPs on Ethereum through ZKP. Currently, it is developing zk.money – a platform for concealing transaction data (sending and receiving anonymous tokens and not disclosing transaction information). Aztec has received a $100 million investment in its Series B round led by a16z. Currently, Aztec does not plan to issue tokens, but it is a very promising ZK project and has the potential to become an attractive investment for many people.
zkBNB
zkBNB is an expansion solution using Zero-knowledge proof technology, built as a Layer 2 of BNB Chain. Through zkBNB, users of BNB Chain will experience smoother and significantly improved transaction speeds. zkBNB is being developed under the leadership of CZ, and currently, BNB Smart Chain is building its Layer2 ecosystem using ZK technology.
IN SUMMARY:
In the upcoming time, ZK technology will be more widely applied with the launch of the improvements mentioned above. You can spend time researching more about ZK and the Best ZK Coins 2024 that I have suggested above, to prepare for an upcoming real explosion.
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