Ethereum price has staged a decent recovery above $1,620 on Saturday after renewed upward action heading into the weekend. Market data shows that Ether marched past $1,600 for the first time since Sept. 15 earlier today, printing a daily and multi-week high of $1,645. This broader market price ascent has resulted in more interest in crypto projects, even among developers who had moved to the sidelines.
Ethereum’s new smart contracts spike
Analyst Easy OnChain noted on Oct. 26 that the number of new smart contracts deployed daily on Ethereum recently reached a new year peak. CryptoQuant data shows that the number of daily new contracts trailed below 20K between mid-March to October.
In contrast, contracts have been rapidly deployed recently, with two major spikes observed a week apart on Oct. 15 (59,605 new contracts) and Oct. 22. (77,538 new contracts).
“The development of new smart contracts decreased [during the bear market] probably because no one wanted to put out a new dApp project while the market was going down. However, the number of new smart contracts began to increase since Oct. 9, reaching levels not seen since July 2021. This could indicate that developers have improved their expectations about the future of the market and activity on the network.” the analyst theorized.
To learn more, check out our Investing in Ethereum guide.
Outside the market, blockchain development teams have ramped up efforts to deliver improvements and, overall, advance their ecosystems. Particularly, there has been a lot of hype around the zero-knowledge proofs technology as teams race to birth an optimal zero-knowledge proof-based EVM.
The Ethereum community, including the project co-founder Vitalik Buterin, long conceded that the network will rely on layer two platforms to achieve improved transaction speeds and lower gas fees. Leading the ambition to achieve this are optimistic and zero-knowledge rollups. Optimistic rollups like Arbitrum and Optimism send transactions to a sidechain before they are bundled and sent back to the base layer for validation. These have improved performance but still face adoption hurdles even as they evolve. A big challenge with this technology is the long withdrawal periods, which zero-knowledge rollups are designed to remedy.
Zero-knowledge proof-based rollups for Ethereum scaling
Rather than optimistically assume that transactions are accurate during proving, ZK rollups employ fancy cryptography to verify the correctness of transactions. The mechanism eliminates any security risks and extended delays, and its design is seen as possible to achieve near-infinite scalability. Earlier this week, Buterin commended zk layer 2 Ethereum scaler, Scroll for sharing a detailed post that sheds light on zero-knowledge proofs.
“It’s necessary (to make all our moon math as understandable and accessible to people as possible) if we want to keep our ecosystem open and welcoming to people who did not follow a traditional many-year university math education track,” he wrote.
Polygon’s zero-knowledge-based EVM-equivalent network
Polygon, an Ethereum scaler leveraging the potential of zero-knowledge-based innovation, earlier this month announced the launch of the public testnet for Polygon zkEVM – a network that uses performant zero-knowledge (ZK) proofs within an Ethereum Virtual Machine-equivalent environment. On the same day, Scroll released an upgraded version of its pre-alpha testnet that features smart contract functionality. The team plans to release its permissionless testnet at a later unconfirmed date.
Polygon described its virtual environment as a first of its kind in the crypto space and a breakthrough towards achieving the much-desired seamless scaling. The open-source zkEVM proving system has been tagged as EVM-equivalent, and the Polygon team feels it’s the best bet to achieve scalability to enable Solidity developers to seamlessly interact with Ethereum smart contracts, wallets and developer tools in an enhanced environment.
Internal breakthroughs accelerated Polygon’s zkEVM
Even with such high demand for an EVM-equivalent environment, there are questions about Polygon’s build. For starters, it was initially projected to take up three to five years of work, which has apparently been reduced to under a year. Polygon co-founder Mihailo Bjelic attributed the condensed timelines to developmental breakthroughs that helped unlock better efficiency.
Also, zkSync’s chief product officer Steve Newcomb is not so sure of Polygon’s EVM-equivalent effort. Newcomb has disputed Polygon’s claim of Ethereum-equivalence, but the blockchain’s team clarified that its definition is tied to opcode-level compatibility/ ability to natively run bytecode without compiling it. Newcomb is also skeptical of Polygon achieving its projected timeline of mainnet launch in early 2023, as a lot is yet to be done.
However, according to Bjelic, events are fast-tracked, and thus the ideal 9-month testnet period floated by Newcomb is subjective. Buterin has in the past warned that it would take several years of development and audits before Ethereum users are completely at ease holding their assets in a ZK-rollup running a full EVM.
To learn more, check out our Investing in Polygon guide.
Matter Labs launches zkSync v2 mainnet to beat out competitors
In a related development, Matter Labs, the innovation lab behind Ethereum layer 2 scaling protocol zkSync, on Friday deployed the second version zkSync, pitching it as the first of its kind to launch on Ethereum. This claim sparked a debate in the crypto community, specifically from competing platforms and skeptical minds.
The release ‘Baby Alpha’ didn’t arrive as a complete package as most of the platform’s features remain inaccessible to outside teams. At present, it allows the team to test out zkSync’s systems and confirm that the production system is running as it should. The platform will be accessible to a few in the coming months and then open to the public after the full launch, which is, on paper, expected before the end of the year.
There were questions around Matter Labs’ latest release earlier this week, with the biggest concern being the practicality of zkSync’s prover technology. In a recent tweet, Offchain Labs CEO Steven Goldfeder raised doubts about the technology, adding that creating hype around ‘a first zkEVM on mainnet’ is misleading. Goldfeder’s remarks are somewhat expected, given that Offchain Labs is the co-founder of Arbitrum.
“Here’s the current state of zkEVM: lots of teams are making steady progress, but we’re not ready for prime time by any means. Unfortunately, the race to be first is sometimes allowing marketing to take over,” he wrote. “Marketing the ‘first mainnet zkEVM’ when we’re still so far away isn’t good for anyone. It muddies the narrative for users that just want to understand the facts. And it puts competitors trying to do the right thing in a tough spot.”
Matter Labs has remained firm amid these doubts, confirming via its chief product officer Steve Newcomb that the developments are on schedule and in line with its roadmap. The team intends to launch a native token as well. zkSync 2.0 introduces smart contracts deployment and aims to achieve a similar result as Polygon zkEVM. It, however, subscribes to Ethereum compatibility rather than equivalence – it omitted only three opcodes for performance’s sake. This latest iteration entered the development stage in 2020 and got on the testnet in February.
The future of Ethereum zero-knowledge scaling
Notably, Matter Labs has adopted a different approach from Polygon zkEVM, choosing to only open-source its EVM system once the mainnet ships. zkSync currently has a total value locked of $64.26 million, according to data from L2beat. In the last 30 days, the user-centric zk rollup platform has logged 1.21 million transactions. Arbitrum and Optimism’s rollups have TVL figures of $2.68 billion and $1.64 billion, translating to a 51% and 31% market share, respectively.
Design choices to improve Ethereum’s flaws have inspired more projects like Polygon zkEVM and zkSync 2.0. Starkware and Loopring are targeting non-EVM-compatible zk-rollups, while Scroll and Taiko bear the same ambitions as Matter Labs and Polygon.
A sign of even more purpose, Matter Labs plans to release a proof of concept of an EVM-compatible layer-3 prototype, Opportunity, which it is working on early next year. Layered on zkSync, it will act as a complementary off-chain computation service on zkSync’s main network. The project, currently in the pipeline, was initially dubbed Pathfinder before being rebranded to Opportunity.
To learn more, check out our Investing in Optimism guide.
Polygon’s Sandeep Nailwal dismisses the notion that blockchains solve ‘new’ problems
Elsewhere, Polygon co-founder Sandeep Nailwal recently rejected suggestions that blockchain technology solves new problems. The blockchain developer argued that rather, the vast majority of them are built to solve traditional problems in various areas, such as finance and assets, in a much better way using existing technical mechanisms.
Nailwal has also recently noted that products in the current crypto space are very weak therefore insisting on a focus on building in response to Solana co-founder Anatoly Yakovenko’s disparaging comments about Ethereum. Yakovenko previously told Decrypt that his creation is progressing well, even better than Ethereum in some cases, such as developer adoption.