With the need to scale Ethereum reaching large volumes, the number of decentralized financial projects and internet companies investing in layer-2 solutions is increasing.
A Series A funding round for the Matter Labs zkSync layer 2 scaling protocol has been announced. Its goal is to bring the Solidity smart contract language to the platform.
The round is led by a number of big names in the crypto and internet security industry including early Twitter investor Union Square Ventures (USV), Cloudflare, Firebase, Twilio, MongoDB, and exchange giant Coinbase.
Matter Labs first released its layer 2 product in December 2019 after raising an undisclosed sum to limited partners. zkSync tweet:
“Pleased to announce an ecosystem investment round to become Ethereum’s main payment backbone – and turn into an EVM-compatible ZK aggregator.”
Layer 2 is evolving
zkSync speeds up Ethereum transactions by using knowledgeless aggregates to batch execute and process them off-chain. It can also provide the same security guarantees as a normal smart contract on layer 1.
The message says security will be an important factor for users to decide which layer 2 solution to deal with.
“The crypto community will especially prefer the solutions with the least damage in terms of security, decentralization and user experience.”
In addition, the zkSync ecosystem can grow indefinitely, taking advantage of the ability to synthesize and combine network effects. This is crucial for protocols like Aave, Balancer, and Curve, which are already worth billions of dollars.
zkSync processes more than 1.1 million transactions and is integrated into a number of dApps and platforms including Golem, Numio, StablePay, and Storj.
Matter Labs is expected to integrate more into major wallets such as those provided by Coinbase and Huobi, adding that it could become Ethereum’s primary payment.
“All users will be able to create and be able to fund their accounts directly from exchanges or services on the network (e.g. Coinbase, Huobi, Binance, Ripio or Moonpay) without a let’s take a layer 1 transaction ”.
The investments from the seed round will be channeled into bringing Turing-complete smart contracts with Solidity to zkSync via its own Zinc programming framework. The blog post says a public testnet for zkSync smart contracts will roll out in the next few months.
Gas charges have gone up again
Gas fee break time is not long due to transaction costs tend to increase again. As major crypto assets are starting to show signs of recovery following last week’s correction, average transaction fees are also on the rise.
According to BitInfoCharts, Ethereum transaction fees averaged $ 13, down from a peak of $ 40 last week but still not very optimistic after a slight drop over the weekend.
Even at these levels, micro-transactions on the network are impossible, making the demand for layer 2 payment channels like zkSync even greater.