Layer-2 money market zkLend raises $5 million in seed round
Ethereum Layer-2 scaling options are seeing an increasing number of protocols constructing on them because the know-how turns into more and more mature. A month in the past Yearn Finance launched its first layer-2 powered service on optimistic rollup protocol Arbitrum, and three weeks in the past StarkWare themselves raised $100 million at a $6 billion valuation.
The most recent protocol to leap on the layer-2 bandwagon is zkLend, a cash market protocol constructed on StarkWare’s public zk-rollup scaling protocol StarkNet.
Jane Ma, Co-Founding father of zkLend stated:
“Constructing our next-generation cash market protocol on StarkNet signifies that we inherit Ethereum’s safety and decentralization whereas leveraging zk-Rollup’s large scalability potential. For the primary time, it signifies that permissionless and safe monetary providers that put particular person sovereignty first are inside attain. Given the passionate StarkNet group, we’re sure that this would be the future L2.”
Scale at an element of 1-200
In keeping with the press launch, zkLend will be capable of scale at an element of 1-200 of Ethereum’s (ETH) ordinary value, whereas inheriting Ethereum’s excessive degree of safety.
“Moreover, our imaginative and prescient is to welcome the following period of finance: institutional DeFi. ZkLend has two merchandise to cater to each DeFi customers and whitelisted institutional customers, serving as the elemental cash lego within the rising zk-Rollup ecosystem of dapps and customers,” commented Brian Fu, Co-Founding father of zkLend.
The $5 million raised will go in direction of the launch of the Artemis and Apollo merchandise, along with workforce growth throughout tech, advertising and marketing, and enterprise improvement.
Artemis is a permissionless lending providing scheduled to be in Q3 2022. Artemis will, in accordance with zkLend, allow DeFi customers to borrow in opposition to their belongings “in an affordable, environment friendly and protected method.” Institutional and company customers needing a KYC and AML-compliant resolution will be capable of use the second product Apollo, a permissioned resolution anticipated to launch early subsequent yr.
Double-sided borrowing and collateralization elements
The protocol will undertake an modern ouroboros mannequin to incentivize customers to take part within the focused cash market swimming pools. An ouroboros is an historic image depicting a serpent or dragon consuming its personal tail. Different highlighted options enabled by zkLend embody double-sided borrowing and collateralization elements, protocol-to-protocol lending, and variable liquidation charges.
The native protocol token, ZEND, is a linchpin of the protocol. Customers staking ZEND will be capable of take part in governance, booster price rewards, and claims to the curiosity earnings earned by the swimming pools.
Tom Shaughnessy, Companion, and Co-Founding father of Delphi Ventures stated:
“Cash markets are a core part of the DeFi monetary stack with robust current product-market match. Couple a cash market with the technical prowess of StarkNet’s decentralized zk-rollup which is dwell and confirmed and you’ve got zkLend. The zkLend workforce is sensible, polished and pushed to execute and ship on this dual-approach resolution servicing each DeFi customers and establishments. Delphi is proud to be an investor and to assist construct zkLend.”
Different main traders on this seed spherical embody Genesis Block Ventures, Alameda Analysis, CMS, MetaCartel DAO, DCVC, Amber Group, TPS Capital, Ascensive, D3Web Capital, 4RC, and SkyVision Capital.
Distinction between zk- and optimistic rollups
Zk-rollups depend on zero-knowledge (zk) proofs for all state transitions to perform accurately. Afterward, every transaction is in comparison with the good contract on the mainchain.
Zero-knowledge proofs shield all state transitions, which ensures that no invalid transactions or malicious contracts will be executed as a result of every thing have to be validated in opposition to the good contract earlier than it may be carried out.
Zk-rollups have the benefit of being considerably quicker than optimistic roll-ups since it’s significantly lighter on layer-2 as a result of the validation happens on the Ethereum mainchain relatively than on the sidechain. As a result of mainchain validation happens nearly immediately, zk-rollups are quicker and extra scalable than beforehand.
The key draw back of zk-rollups is that they aren’t but Ethereum Digital Machine (EVM) suitable, and thus can not run good contracts developed for the Ethereum mainchain with out main modifications. Optimistic roll-ups, nonetheless, can run mainchain good contracts just about as they’re.