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ZKSwap

Zkswap space layer-2 for all!
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Finance
Blockchain
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Ethereum
Currency
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ZKS
Publisher
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Zswap Team
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What is ZKSwap?
ZKSwap is a DEX protocol based on the automatic market maker (AMM) model, featuring real-time transaction and low gas fee. You can become liquidity providers by adding funds to ZKSwap L2 pool and earn the liquidity fee provided by traders. You’ll earn 0.25% of all trades on this pair proportional to your share of the pool. Fees are added to the pool, accrue in real-time, and can be claimed by withdrawing your liquidity. Decentralized finance, also known as DeFi, has been growing rapidly, with blockchain developers creating a range of applications based on Ethereum network and major public chains, including exchanges, collateral lending, stablecoins, insurance, oracles, games, etc forming an increasingly holistic decentralized financial ecosystem. On-chain assets have been growing rapidly and kept setting new records since 2019, with the size of assets locked in various DeFi protocols surpassing $100 billion by May 2021. As more blockchain applications are developed and implemented, new users continue to become familiar and engaged, it is bound to further drive the development of DeFi and the continued activity and growth of on-chain assets.
Information
Type
Staking
Blockchain
Ethereum
Currency
ZKS
Platform
Android, Windows
Publisher
Zswap Team
Version
Version 3.2.1
FAQ
Since 2019, the blockchain industry has undergone breathtaking changes. Decentralized finance(DeFi) continues to grow at an exponential rate. The Total Value Locked in different DeFi protocols has exceeded 70 billion U.S. dollars. With the continuous development of numerous on-chain assets and off-chain assets going on-chain, we believe that the Total Value Locked in DeFi protocols will soon exceed 100 billion U.S. dollars. These on-chain assets require fast, frictionless, trust-free, and real-time exchange services, which has led to the rise of new decentralized exchange(DEX) protocols such as Uniswap.
Although the new DEX model spearheaded by Uniswap has achieved significant development, it still has obvious drawbacks. First, the high gas fee of dozens of dollars per transaction hinders new users to entry; second, every transaction and every execution needs to wait for at least one block to confirm, which gives an unsatisfactory experience; and third, subject to the limiting TPS of Ethereum, Uniswap has a clear bottleneck in transaction numbers and transaction capacity per second. Those drawbacks are not unique to Uniswap. They are common issues faced by all DEXes.
ZKSwap (a ZK-Rollups based token Swap protocol) is a brand-new exchange protocol based on ZK-Rollups technology. Through Zk-Rollups technology, all ERC20 tokens are transferred through Layer2, and the consistent state of Layer1 and Layer2 is guaranteed based on continuously generated zero-knowledge proofs. This solution allows all transactions and swaps to execute on Layer 2, achieving real-time swap with zero gas fees, unlimited scalability, removing the constraint from Ethereum's TPS. The user no longer has to wait for the one-block confirmation time for each transaction. ZKSwap enables a DEX to provide the smooth user experience of a centralized exchange(CEX) while allowing the users to have full custody over their funds. We believe that ZKSwap is the future form of a token trading platform. It will trigger a significant evolution of all existing DEX and CEX.
Although new Dex such as Uniswap has made great progress, there remain considerable amounts of shortcomings. ZKSwap's has the following advantages compared to Uniswap:
0 Gas Fee: Compared to dozens of dollars worth of Gas Fees resulted from transactions on traditional Dex (Gas Fee will continue to increase as the price of Ethereum increases), ZKSwap transactions on Layer-2 requires zero Gas Fee,which greatly reduces transaction cost for users.
High TPS(Transation Per Second): Hindered by TPS limitations on Ethereum, traditional Dex such as Uniswap has an obvious bottleneck in transaction numbers and capacity per second. Through optimizing GPU, ZKSwap can conduct hundreds and thousands of TPS with the trustless method. In the case of having enough machines to support expansion, ZKSwap's TPS can theoretically reach 6000.
Real-time transaction: All transactions on ZKSwap are transferred to Layer-2 and are valid for real-time transactions, users DO NOT need to wait for the one-block confirmation time.
The centralized crypto exchange, represented by exchanges such as Binance, Huobi, OKex, etc., has gathered a huge number of users and transactions. The main differences between ZKSwap and centralized exchanges are as follows:
From the perspective of asset security, the CEX wallet stores and manages all users’ assets. Due to a large number of funds, it is easy to attract hackers. Once a problem occurs, almost all users will suffer losses; in ZKSwap, users’ Assets are not stored on the platform but managed by smart contracts. During the transaction, the platform does not touch the user's assets. Each transaction requires users to complete the confirmation with a private key signature, and the swap of assets is directly transferred to the account L2 wallet.
From the perspective of asset control, in CEX, user assets are controlled by the platform, and users need to transfer their assets to the wallet of the trading platform. The asset custody function of the centralized trading platform is just like a bank. The user deposits the money in the bank, and the bank gives the user an account to record the user’s funds. The bank has absolute control over the user’s funds; on ZKSwap, the user’s assets are completely in the control of the user. ZKSwap does not provide fund custody services, so it cannot control or transfer users' funds. As a decentralized exchange in Layer-2, ZKSwap has passed the security audits of three major audit institutions (ABDK, Certik, and SlowMist) for its contracts and circuit codes. Users control their own private keys and their assets are safe and controllable.
From the user registration process, in CEX, users register for an account and set a password to enter the exchange. This process generally requires KYC. Corresponding materials need to be submitted to be reviewed. On ZKSwap, users can use ZKSwap without KYC by connecting the Ethereum wallet to the ZKSwap platform, making the process faster and more convenient.
From the transaction process, CEX transactions are completed through order book matching; ZKSwap uses the automatic market maker AMM model, which has obvious advantages in user asset utilization efficiency and transaction depth. The transaction process is executed by the smart contract, without any third party acting as an intermediary.
The user's assets in ZKSwap Layer-2 are entrusted in the smart contract and are completely under their own control. Except for the user who owns the account's private key, other third parties cannot control or transfer the user ’s assets. Even if the project team stops the service, the users can still retrieve the assets autonomously from the smart contract.
The main difference between ZKSwap and Loopring is areas of product route, technical details, and user experience.
In terms of product design, Loopring is a Layer-2 DEX based on the order book model, and it has also begun to explore Layer-2 DEX based on the AMM model. ZKSwap mainly focuses on Layer-2 DEX based on the AMM model and hopes to build more Layer-2 infrastructure in the future.
In terms of technical details, Loopring uses Groth16's zero-knowledge proof algorithm, and the circuit needs to be reset every time a trading pair is launched. ZKSwap is based on the newer Plonk zero-knowledge proof algorithm, which is more efficient and is capable of updating the trusted settings without having to update the circuit every time.
Overall, Layer 2 is a track with high opportunities, and Layer 2 projects are too few, not too many. We believe that more and more projects will enter this track in the future and bring more innovation and diversity into the ecosystem. ZKSwap hopes to build a complete Layer 2 ecosystem together with these projects.
After the user connects the wallet to zks.app, deposits assets to the second-tier account of ZKSwap, he can then start trading. For the specific transaction process, please refer to: ZKSwap Web app Tutorial
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