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ZKSwap x Satoshi CLUB AMA Session 6 Feb 2021

Hello, Satoshi clubbers and guests of this site. Today we will talk about the ZKSwap project.
ZKSwap is a layer2 dex using ZK-Rollups and AMM model.
The AMA took place on February 6 and our guests were Alex — Lead Team of ZKSwap.

The total reward pool was 500$ and has been split into 3 parts.

In this AMA Recap, we will try to summarise the most interesting points for you.

Part 1 — introduction and questions from the Website

Mary | Satoshi Club:
Hello Satoshi Club! We are happy to announce our AMA session with ZKSwap! Welcome to Satoshi Club

D. | Satoshi Club:
Hello all!

ZKSwap Official:
Hi!

Mary | Satoshi Club:
Welcome here

ZKSwap Officia:
Thank you for hosting the AMA. We are ZKSwap, a layer2 dex using ZK-Rollups and AMM model.

Mary | Satoshi Club:
Great! We are really excited to hear more about it!

Mary | Satoshi Club:
For the beginning please, introduce yourself

ZKSwap Official:
We are about to launch on the Ethereum mainnet in a few days. I am the team lead Alex.

Mary | Satoshi Club:
Nice to meet you, Alex!

ZKSwap Official:
Glad to be here Mary.

Mary | Satoshi Club:
Tell us how old is ZKSwap?

ZKSwap Official:
ZKSwap was founded in Aug 2020, a pretty new project but our team members are OG in the industry.

Mary | Satoshi Club:
Are they public or anonymous?

ZKSwap Official:
Yeah, we are anonymous due to regulatory concerns.

Mary | Satoshi Club:
How many team members do you have?

ZKSwap Official.
About 20, most devs some supporting.

Mary | Satoshi Club:
Big team, a lot of things are possible

ZKSwap Official:
I agree.

Mary | Satoshi Club:
Thank you for the introduction, Alex! Ready to start with the questions from our community?

ZKSwap Official:
Sure! Happy to.

Mary | Satoshi Club:
Let’s go

Q1 from Telegram user @JoanaZ
The ZKSwap name Suggests that you have a relationship with the famous Zk-snarks mechanism, so do you actually use it? How?

ZKSwap Official:
Yes.

ZKSwap Official:
We use one of the ZK-Rollup scheme called PLONK. ZK-Rollups are the best layer2 scalability solutions, with better fund security and finality than some other solutions (optimistic rollups).

Mary | Satoshi Club:
Does it mean that transactions will be faster? And does it mean that they will be cheaper?

ZKSwap Official:
Yes.

ZKSwap Official:
When ZKSwap first started, ZKSwap was based on the ZKSync framework. As we delve deeper into the development process, we learned that ZKSync had many issues to be solved. Zksync only supports payment and does not support token swap, and based on its public code its TPS is less than 10, its layer2 still costs gas fees, and the fee is somewhat expensive. So in the subsequent development, we only reused ZKSync’s open-source code of layer 1 contract, for layer2 solutions, we basically developed it independently, achieving both high TPS and gas efficiency.

ZKSwap Official:
The ZK-Rollup system developed by ZKSwap is the zero-knowledge proof system currently deployed on the largest server cluster and with the fastest TPS. Based on the team’s deep optimization of the ZK-Rollup Plonk Scheme, ZKSwap’s TPS can be over 100. It means the entire ZKSwap system can handle nearly 10 million transfers and swap transactions every day. Subject to the computation speed of SNARKs and the native chain TPS, the TPS of most other layer2 solutions is lower than 10.

D. | Satoshi Club:
Does anyone use ZK-Rollups now? any decentralized exchange?

ZKSwap Official:
Yes.

ZKSwap Official:
With the rising gas fee, more and more users are looking at layer-2. And many projects have chosen ZK-Rollups, e.g., Matter Labs (zkSync 1.0 only supports transfers), StarkWare (from StarkEx to StarkNet), Loopring (currently only supports trading and Transfer), Hermez (currently only supports transfer), etc.

Mary | Satoshi Club:
Yes, you’re right! Almost all projects are looking for these solutions, but it doesn’t fully work in any of them, as I know.

ZKSwap Official:
Layer2 is inevitable.

ZKSwap Official:
Among all solutions, ZK-Rollups are the best for dex. And we have optimized it for better speed and even lower fees.

Mary | Satoshi Club:
Right or we will spend everything on fees

D. | Satoshi Club:
All our profit

ZKSwap Official:
Yeah $80 gas fee for one transaction just does not make sense.

Mary | Satoshi Club:
Thank you for your answers! Next question is connected with this

ready to proceed?

ZKSwap Official:
Yeah absolutely.

Q2 from Telegram user @manugotsuka
The ZKSwap is basically a mix between the Zk-Rollup + Automated Market Maker, so how this combination can help you to overtake competitors like Uniswap?

ZKSwap Official:
We are one of the few first pioneering with AMM model on layer2.

ZKSwap Official:
Truth be told, zero-knowledge proof is difficult.

Mary | Satoshi Club:
Yes, a bit

D. | Satoshi Club:
And also, how do you think, why Uniswap still not use L2?

ZKSwap Official:
The key to a good dex boils down to users.

Mary | Satoshi Club:
Btw, will we need to pay for using L2? I am not talking about fees, I am talking about any payment for l2 connection?

ZKSwap Official:
No matter what moon math tech we use, the point is to provide a good smooth user experience, of course, smooth transaction, high speed, and low gas fees make a good UX. That’s why ZKSwap will take over layer1 dexes for sure.

ZKSwap Official:
Transferring on layer2 using ZKSwap is gas-free, 0 gas fee.

ZKSwap Official:
All transactions executed on layer-2, including sending, swapping, adding/removing liquidity, are gas-free. Depositing from layer-1 (the Ethereum native chain) to layer-2 and withdrawing from layer-2 to layer-1 requires gas-fees, but ZKSwap subsidizes the withdrawal gas.

Mary | Satoshi Club:
Any hidden payments for connections?

Mary | Satoshi Club:
Got it!

ZKSwap Official:
I guess by connections you mean deposit and withdrawal between layer1 and layer2, Depositing from layer-1 (the Ethereum native chain) to layer-2 and withdrawing from layer-2 to layer-1 requires gas-fees, but ZKSwap subsidizes the withdrawal gas.

ZKSwap Official:
Yeah, so there you go, if you are an avid trader making lots of swapping, layer2 is a no brainer.

Mary | Satoshi Club:
Yes, something like this

D. | Satoshi Club:
yes, this is what we wanted to know.

ZKSwap Official:
As I said, layer2 is inevitable and it’s coming.

ZKSwap Official:
The beginning of layer2 spearheaded by ZKSwap marks a new phase for DeFi.

Mary | Satoshi Club:
Thank you! We all are waiting for this day to come!

ZKSwap Official:
Like Elon Musk said, looking back it was inevitable.

Mary | Satoshi Club:
Ahaha

Mary | Satoshi Club:
Ready to jump to the next question?

ZKSwap Official:
Sure!

Q3 from Telegram user @pthtx
You know that there are many investors in the US. Maybe I think they can boost the volume and price of the ZKS itself. But somehow, they’re restricted to using ZKSwap for some reason. how ZKSwap team solves this?

ZKSwap Official:
That’s a decision the team has to make due to regulatory concerns.

ZKSwap Official:
Lack of clarity is really hindering the industry.

Mary | Satoshi Club:
Only the USA or you have other countries that are restricted?

ZKSwap Official:
I’ll have to get back to you on this.

Mary | Satoshi Club:
Do you check IP? Or it just a warning for these citizens?

ZKSwap Official:
We restrict IP.

Mary | Satoshi Club:
Thanks!

D. | Satoshi Club:
but people from the US can use VPN, will it allow them to use ZKSwap?

Mary | Satoshi Club:
Lol, it’s secret

D. | Satoshi Club:

ZKSwap Official:
Shall we move on to the next question?

D. | Satoshi Club:
Sure!

D. | Satoshi Club:
Thank you for the answer!

Q4 from Telegram user @Wormz28
The ZKSwap team will give away 40 Million ZKS before the mainnet launch worth about 70 million USD, so may I ask what’s the reason and the purpose of why ZKSWAP will temporarily remove the liquidity on Uniswap? Also, I think many are waiting & interested in the Airdrop, so what are the rules, and how we can join and participate?

ZKSwap Official:
Yes, we are currently taking snapshots of holders addresses, to do that we removed liquidity temporarily on Uniswap so the tokens lock-in liquidity pools will be freed and eligible for the snapshot.

ZKSwap Official:
This community giveaway is our way of thanking the early participants.

Mary | Satoshi Club:
So, we are late to participate?

ZKSwap Official:
We have hosted 4 large scale testnet incentive programs since last November. As we approach mainnet launch, we will also announce two community mining events, proof-of-staking, and proof-of-gas.

ZKSwap Official:
It’s never late to join the community as there will surely be more community engagement events.

Mary | Satoshi Club:
How many participants did you have?

D. | Satoshi Club:
Indeed.

ZKSwap Official:
Oh, a lot. I mean, honestly, our recently closed proof-of-gas incentive program we’ve seen over 20K users(individual IPs) participating.

Mary | Satoshi Club:
Wow! Incredible numbers!

Mary | Satoshi Club:
Which feedbacks did you get?

D. | Satoshi Club:
How many tokens overall, do you plan to give to your community? Do you have particular numbers?

ZKSwap Official:
Mostly positive. Since it’s testnet incentive, we welcomed bug report and there were feedbacks about user experience related features.

Mary | Satoshi Club:

ZKSwap Official:

https://esatoshi.club/wp-content/uploads/photo_2021-02-07_16-12-45-1024x241.jpg

ZKSwap Official:
Haha, so there you go, all the detailed number of our past events.

Mary | Satoshi Club:
Wow

Mary | Satoshi Club:
Your community should be happy! They did a great job and will be rewarded!

Mary | Satoshi Club:
Ready to proceed?

ZKSwap Official, [06.02.21 13:38]
Yeah, sure.

Q5 from Telegram user @chzrles
How does ZKSwap stay sustainable if it doesn’t charge commissions and also makes big airdrops worth millions of dollars, all this in less than a year since this project was launched?

ZKSwap Official:
Haha, fair question but we got it all figured out.

ZKSwap Official:
If you check our economy whitepaper you’ll see we have allocated what we think is the right amount of tokens for community growth.

ZKSwap Official:
ZKSwap aspires to attract users with smooth user experiences. We do community engagements to attract existing DeFi users to try DeFi on layer2.

Mary | Satoshi Club:
Can you share your wp with us?)

ZKSwap Official:
Sure, one sec.

ZKSwap Official:
https://medium.com/zkswap/zkswap-economy-whitepaper-31d57b10cae6

ZKSwap Official:
While we are at it, can I share our social media for folks to learn more?

ZKSwap Official:
@madamlobster

Mary | Satoshi Club:
Of course!

D. | Satoshi Club:
Umm, a big piece of pie for community

ZKSwap Official:
Awesome. You can find us here

:
ZKSwap Official Website: https://zks.org/en
ZKSwap APP: https://zkswap.app
ZKSwap Twitter: https://twitter.com/ZKSwapOfficial
ZKSwap Official Telegram group: https://t.me/zkswapofficial
ZKSwap Medium Publication: https://medium.com/zkswap
ZKSwap Discord: https://discord.gg/ZRxS8fYTDv
ZKSwap Github page: https://github.com/l2labs

ZKSwap Official:
Yes indeed, 60% for community mining, 8% for third-party devs, and ecosystem growth.

Mary | Satoshi Club:
Thanks! Satoshiclubbers join!

ZKSwap Official:
The more the merrier!

ZKSwap Official:
This is the perfect timing to learn about community mining.

Mary | Satoshi Club:
And 15% for team

do you plan to lock that tokens?

ZKSwap Official:
Yes.

Mary | Satoshi Club:
Explain it to our community

ZKSwap Official:
One year lock up and Starting from the second year, 5% of the total token supply will be distributed to the ZKSwap team every year till the end of the fourth year;

ZKSwap Official:
Also lock up for angel investors till listing on major exchanges, which explains the currently low circulating supply of only 40 m atm.

Mary | Satoshi Club:

ZKSwap Official:
I’ll add a bit more about this.

ZKSwap Official:
Community mining includes:
Proof-of-Liquidity-Mining (15% of the total supply);
Proof-of-Gas (10% of total supply);
Proof-of-ZK-Snarks (15% of the total supply);
Proof-of-TransFee (10% of the total supply);
Smart Contract Staking (10% of the total supply)

ZKSwap Official:
Any more questions from the community?

Mary | Satoshi Club:
Yes!

D. | Satoshi Club:
We have the last question in this part

Q6 from Telegram user @Unknown_Mark
I surfed your website for a lot of time and I didn’t find anything talking about security, so can you please tell me what procedures do you take for the security of your project? How can you proof to me that it is safe and secure to invest in your token? Thanks.

ZKSwap Official:
Definitely a great question!

ZKSwap Official:
Security is key to any DeFi project.

D. | Satoshi Club:
I smell question about audit here @madamlobster

ZKSwap Official:
The security of the ZKSwap system mainly includes the security of the Layer 1 smart contract and the circuit security of Layer 2.

Mary | Satoshi Club:
Ahaha

ZKSwap Official:
At present, the team is working closely with three audit teams to independently audit and test all the codes of ZKSwap, including those that focus on the field of zero-knowledge proof audits. The ABDK team, the Certik audit team, and the SlowMist audit team, according to the feedback from the audit team, currently our code is good to go on mainnet.

Mary | Satoshi Club:
And reports will follow soon, right?

ZKSwap Official:
Another part about security is whether funds are SAFU at layer2. This we can assure you it’s mathematically guaranteed.

D. | Satoshi Club:
Wow, nice audit firms.

ZKSwap Official:
We actually have audit reports from the slow mist on our social channels. Reports from ABDK and CertiK will come soon.

ZKSwap Official:
Good eye!

Mary | Satoshi Club:
Great! We will follow updates from you!

Part 2 — live questions from the Telegram community

Q1 from Telegram user @Damilola145
What are the goals ZKSwap seeks to achieve before the end of this first quarter?

ZKSwap Official:
Good question, our immediate goal is of course mainnet launch, then making the ZKSwap.app accessible to more users; In mid-term we will cooperate with exchanges and wallet providers to integrate with ZKSwap. Our long-term plan is to abstract the technology of ZKSwap and builds a layer-2 protocol; to support more DeFi projects, and use ZKSwap technology to build future DeFi on Layer 2.

Q2 from Telegram user @azrayeni
What is proof of the gas concept? Can you explain the difference from proof of stake?

ZKSwap Official:
Proof-of-gas in simple English is trading ZKS with ETH. For each transaction on the ZKSwap layer-2, ZKSwap needs to submit zero-knowledge proofs to Ethereum layer-1 to ensure security. For each interaction with the Ethereum layer-1, a certain amount of Gas fee will be consumed. In zkSync and other ZK-Rollups-based systems, this part of the Gas cost is covered by the user.
ZKSwap proposes Proof-of-Gas (POG), a proof mechanism based on Ethereum Gas consumption, making it possible to allow a third party to pay the user’s gas fees.

Q3 from Telegram user @CrisTubista
There are currently many emerging Swap platforms. What would you say to users, so that they consider ZKSwap as their alternative header?

ZKSwap Official:
It all boils down to user experience, transaction speed, cost, security, liquidity. We are confident about all these factors.

Q4 from Telegram user @Akira23
Does ZKswap have an incentive program running at the moment? How can we benefit from the ZKswap incentive program? Where and when were the prizes from the incentives program distributed?

ZKSwap Official:
We wrapped up all testnet incentive programs. Going forward we have planned community mining and other community engagement events, e.g. we are preparing community dev grants. Stay tuned by following our social media channels.

Q5 from Telegram user @boradam
Security and smart contract auditication very crucially in blockchain projects, especially DeFi projects. How can we make certain of the security of the ZKSwap?

ZKSwap Official:
Good question. That’s why we chose three respected auditing teams. ABDK is the auditing team for ZKSync, CertiK is a cutting edge security company co-founded by professors at Yale Computer science department and Columbia Uni. All very respected in the industry.

Q6 from Telegram user @JuanSB07
How is it possible that the transaction gas within ZKSwap has a cost of “0”? In addition to this, how do you provide a high-performance exchange infrastructure? What is the performance you offer to say that is “ultra-high”?

ZKSwap Official:
All transactions happen on layer2, which is off-chain, but we use zk-rollup technology to ensure the consistency of layer2 and layer1.

Q7 from Telegram user @adamlike
To get more liquidity more users are needed, so how do you plan to win more users to use the ZKSwap project?

ZKSwap Official:
Community engagements! If you are an avid DeFi user of an existing platform, we might have good news for you soon!

Q8 from Telegram user @abdullah_Nl
What is the idea behind the name? Why Zkswap?

ZKSwap Official:
Yes, we are essentially a layer2 dex, so Swap; and our backbone technology is zero-knowledge proof, so ZK; collectively ZKSwap, pretty catchy, yeah?

Q9 from Telegram user @Joseunda
Do I need to have KYC in order to use ZKSwap?

ZKSwap Official:
No! It’s a dex, no KYC needed. Yeah!!!

Q10 from Telegram user @Dwan10
Why does Zkswap still use Ethereum blockchain while it has a slow speed and high gas fee? Do you have any plans to launch your mainet or convert to other blockchains in the future?

ZKSwap Official:
We chose Ethereum because it amasses the largest user base and has the most defi legos to interact with.

Part 3 — Quiz Results

In the final part, we tested your knowledge in terms of ZKSwap. They’ve prepared 4 questions for this part. The total reward pool for the quiz was 300$.

For more information and future AMAs, join our Social Media channels:
English Telegram group: https://t.me/Satoshi_club
Russian Telegram group: https://t.me/satoshi_club_ru

Spanish Telegram group: https://t.me/satoshi_club_spanish
Telegram Channel: https://t.me/satoshi_club_channel
Twitter: https://twitter.com/realsatoshiclub
Website: https://esatoshi.club/

Our partners:
ZKSwap Official Website: https://zks.org/en
ZKSwap APP: https://zkswap.app
ZKSwap Twitter: https://twitter.com/ZKSwapOfficial
ZKSwap Official Telegram group: https://t.me/zkswapofficial
ZKSwap Medium Publication: https://medium.com/zkswap
ZKSwap Discord: https://discord.gg/ZRxS8fYTDv
ZKSwap Github page: https://github.com/l2labs

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Satoshi_storyteller

Storyteller for Telegram community @satoshi_club