Ethereum Layer 2 Network zkSync Era's Locked Value Surpasses $500M

Matter Labs' zkSync Era, a zero-knowledge (ZK) rollup aimed at scaling Ethereum, continues to attract capital at a brisk pace.

The total value locked (TVL) on zkSync Era rose above $500 million early Monday, marking a 12% increase in one week, according to data source L2Beat. The TVL is a metric widely used to track the total value of digital assets locked or staked on a decentralized finance platform.

The scaling solution, which retains Ethereum Virtual Machine (EVM) compatibility while ensuring native account abstraction, is already the third-largest rollup by total value locked next to Arbitrum and Optimism.

Read more: Where Is the Ethereum Virtual Machine Headed in 2023? (Hint: Beyond Ethereum)

At press time, more than 220,000 ether (ETH), or around $378.3 million, about 121 million USDC (a dollar-pegged stablecoin) and 14.43 million MUTE, worth $7.53 million, were locked on zkSync. MUTE is the native cryptocurrency of a zkRollup-based decentralized exchange, Mute.

The daily active addresses have steadily increased since May, averaging 175,000 in the past four weeks. zkSync was launched in March 2023.

Recently, liquid staking solution Rocketpool went live on zkSync Era, joining the list of decentralized applications moving to layer 2 platforms. The increased user demand for rollups is likely driven by Ethereum core developers' focus on implementing the ethereum Improvement Proposal (EIP) 4844, according to Galaxy Digital.

The EIP 4844 will introduce a new transaction type to Ethereum, which accepts "blobs" of data and reduce transaction fees on rollups.

"The prioritization of EIP 4844 as the next major code change in Ethereum’s forthcoming Cancun/Deneb upgrade slated to activate sometime this Fall or Winter next year affirms the importance of rollups for the long-term scalability of Ethereum and the need for dapps built on Ethereum to eventually migrate the majority of their operations to a more cost-effective rollup," Alex Thorn, head of research at Galaxy Digital, said in a newsletter dated June 2.

Note that activity on other ZK rollups like Starknet and Polygon zkEVM also remains brisk. That has some observers calling a Zk season ahead – a crypto market slang for a period where ZK rollups outperform other market sectors by a significant margin.

Read more: Ethereum Layer 2 Network zkSync Era Jumps to Nearly $250M in Locked Value