Parallax and zkSync — Revolutionizing Ethereum Scaling

4 min readApr 7, 2023

A few weeks ago, we updated our 2023 roadmap to include a host of new features and products. These new products and features were specifically designed to enhance and provide even more value to our users. Since then, we’ve received great support from the Arbitrum core team, community, and advisors, who have been integral in helping us take our vision to the next level.

However, we are not content with just stopping there.

Today, we’re excited to announce another iteration on our roadmap: zkSync.

Our original thesis for building on Arbitrum was that layer 2 solutions would help ETH transition to the global economic settlement layer. We still strongly believe in this thesis and see it as a fundamental part of our vision for the future.

About zkSync

zkSync is a Layer 2 scaling solution built on Ethereum that uses zero-knowledge proofs (zk-proofs) to enhance the network’s capacity, speed, and security. It employs a technology called ZK-Rollup, which bundles multiple transactions off-chain, generating a single proof that can be verified on the main Ethereum blockchain.

Why zkSync

First, let’s understand what zkSync is:

It is a solution for Ethereum designed to address issues with transaction speed and cost.
It uses zero-knowledge proofs to batch transactions off-chain and only sends a compressed proof to the main chain. This reduces gas fees and processing time.
It also offers enhanced privacy features and is compatible with Ethereum’s smart contracts. This allows projects to benefit from layer 2 scaling while still using the Ethereum ecosystem.

zkSync has been making waves in the crypto community lately, especially after Arbitrum announced its airdrop. Many believe that zkSync is the next promising chain in the blockchain space.

In fact, its total value locked (TVL) has been growing rapidly, increasing by more than 2x over the past 2 weeks. This is a testament to the potential of zkSync and its ability to solve some of the key issues facing the Ethereum network.

It is ranked fourth on the list of upcoming L2 chains. You can’t sleep on this.

Vitalik Buterin, the co-founder of Ethereum, has been a vocal supporter of zkSync. In fact, Vitalik even mentioned the potential of zkSync back in 2020, long before it gained widespread recognition in the crypto community.

Since then, zkSync has continued to grow and handle larger volumes of transactions. With its efficient use of zero-knowledge proofs, zkSync is able to provide a high level of security and privacy, while also significantly reducing gas fees and transaction times.

As the Ethereum network continues to face scalability challenges, solutions like zkSync are becoming increasingly important for ensuring that the network can handle the growing demand for decentralized applications and transactions. With its potential to revolutionize the way we transact on the Ethereum network, it’s no surprise that zkSync is gaining so much attention and support from top figures in the crypto space, including Vitalik Buterin himself.

Future of Zero-Knowledge Rollup

Fast forward to today, Vitalik expressed his support for Zero-Knowledge Rollup (ZK-Rollup) during the ETH Seoul event. He emphasized that while Optimistic Rollups might take longer to develop, ZK-Rollup technology has a solid foundation that will make it the optimal scaling solution for Ethereum in no time.

Here’s why we believe that ZK-Rollup will catch on:

ZK-Rollup has one main advantage over Optimistic Rollup for its faster transaction times due to the use of cryptographic validity proofs. This means that there are no waiting periods for transaction validity challenges, allowing for quicker transaction processing
Vitalik has shown strong faith in ZK-rollups’ ability to overcome challenges, as it is making significant developments in the space.
For instance, ZK-Rollup Layer 2 projects like Scroll, zkSync, Polygon zkEVM, and BNB Chain ZkRollup are designed to be compatible with a range of smart contracts.

Parallax zkSync Strategy

What will all this mean for Parallax?

Given the increased TVL on zkSync we think there will be a growing need for yield infrastructure tooling for individuals, DAOs and treasuries. Parallax looks to meet that need by offering all available products on zkSync.

We will begin by launching both Orbital and Andromeda on zkSync.

Orbital — Yield Optimizer: Parallax employs a sophisticated auto-compounding mechanism to boost returns for both liquidity provider (LP) tokens and stablecoins.

Andromeda — Multivariant Yield: Select from our top-tier zksync vaults or opt for Degen vaults, or even become a strategist and create your own vaults.

How about LSDfi with our Supernova product? — Good question. Thus far, there hasn't been a lot of activity regarding LSDs on zkSync. As that changes, we will then look into launching Supernova.

Our goal with a potential zkSync integration is to become the leading source of yield infrastructure for zkSync tokens and assets. We plan to do that by partnering with up and coming zkSync protocols to boost their liquidity and provide additional revenue for their LPs.

Timeline

We plan to launch both products by the end of May, shortly after TGE. Before going live, both vaults will undergo an audit.

About Parallax

Parallax provides liquidity infrastructure that empowers individuals, DAOs, and other protocols to generate yield on Arbitrum.

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