Authored by Asher Zhang, Bitpush
On June 11th, ZKsync released information regarding protocol token distribution. As a former powerhouse project in Layer 2, ZKsync has finally made its debut, signaling the beginning of a competitive era among the four major Layer 2 projects. This article briefly outlines the latest development directions and technological advantages of the four Layer 2 projects: Arbitrum, Optimism, Starknet, and zkSync.
Arbitrum has surpassed Ethereum in monthly active users with its strategic focus on L3 gaming. Following the upgrade, transaction costs on the Ethereum Layer 2 blockchain have decreased by as much as 99%, making Arbitrum a major winner of the upgrade. Prior to the upgrade, there were only 747,000 transactions on Arbitrum in a week, but post-upgrade, this number soared to 1.5 million transactions. According to Token Terminal data on June 3rd, Arbitrum’s monthly active users exceeded Ethereum for the first time, reaching over 8 million compared to Ethereum’s approximately 7 million monthly active users. Additionally, it has attracted several companies to participate in ecosystem development, including heavyweight companies like Franklin Templeton and Securitize, which helps BlackRock tokenize assets.
Arbitrum leverages L3 advantages to fully engage in the Web3 gaming sector, where the ecosystem has already started to take shape. This highly customized strategy has significantly improved blockchain performance and better meets the needs of gaming users. The Arbitrum Foundation strongly supports these efforts. On June 8th, the Arbitrum community voted to approve the “2 Billion ARB Game Catalyst Plan,” which is currently pending execution. This proposal aims to provide an incentive plan for the Arbitrum gaming ecosystem, offering a total of 2 billion ARB tokens over a three-year period to studios and games in the Web3 industry to drive the Arbitrum gaming ecosystem. The Arbitrum ecosystem already hosts numerous Web3 games. On the night of March 27th, the Arbitrum Foundation announced a partnership with popular NFT brands Azuki and Weeb 3 Foundation to create a Web3 network called AnimeChain, targeting anime enthusiasts. ApeCoin also chose to adopt Arbitrum technology for development through a vote on April 26th, led by Horizen Labs. Other popular Web3 games on Arbitrum include Xai and XPET.
Optimism, in collaboration with Coinbase, is building Op Stack, which is rapidly gaining traction. Op Stack represents a new concept proposed by Optimism, aiming to integrate isolated L2 solutions into a single interoperable and composable system by maintaining the OP Stack codebase as a public good. Op Stack has facilitated the development of numerous Layer 2 solutions, including prominent ones like Base, opBNB, Zora Network, and DeBank Chain.
Base, developed on Op Stack, has seen significant growth and has a close relationship with Optimism. In February 2023, cryptocurrency exchange platform Coinbase announced the launch of the Ethereum Layer 2 network Base, built on Op Stack, and partnered with Optimism. Coinbase, as a core developer, joined OP Labs to contribute to Optimism Collective’s mission, expanding OP Stack’s leading position as the most powerful public good. Base also returns a portion of its transaction fee revenue to the Optimism Collective treasury, further realizing a sustainable future vision where influence equals profitability. Base launched its testnet in February 2023, with the ecosystem rapidly expanding. Within the last 90 days, the number of Unique Active Wallets (UAW) on the BASE network has grown from 20,000 to 270,000, generating $3-4 million in weekly revenue. Base’s monthly inflow of funds has increased by 162% according to Defillama data, ranking it 7th in Total Value Locked (TVL) and surpassing several well-known public chains. With strong support from Coinbase and its user base, the Base ecosystem has significant potential for future growth.
Starknet, while advancing its technological iterations, is also preparing to take a different path. Utilizing a Rollup approach based on STARK, StarkNet offers distinct advantages in decentralization, trustlessness, and censorship resistance compared to other solutions. However, the development of this approach poses significant challenges, and StarkNet is continuously enhancing its performance. Recently, the most important updates from StarkNet include the introduction of Starknet Appchains and Integrity Verifiers.
In 2023, StarkNet announced the launch of StarkNet Appchains and introduced the rapid development toolkit Starknet Foundry for developing StarkNet contracts. Following the launch of StarkNet Appchains, several chain game projects such as Cartridge, Influence, Matchbox DAO, Briq, and Cafe Cosmos have chosen to migrate to StarkNet. However, compared to Arbitrum’s gaming ecosystem layout, StarkNet’s ecosystem development still lags behind. In addition to StarkNet Appchains, with support from StarkWare, storage proof innovator Herodotus introduced its Integrity Verifier, enabling developers to verify Stone proofs on StarkNet. This new verifier allows developers to validate Cairo programs executed elsewhere on StarkNet similar to how they verify StarkNet executions on Ethereum. This is one of the key recent technological upgrades for StarkNet.
Recently, there have been reports of StarkNet venturing into Bitcoin’s scalability layer, which sets it apart from other Layer 2 solutions. However, there is still uncertainty surrounding this move. On June 7th, Starknet clarified its intentions to focus on Ethereum’s scalability and not create new layers or specialized tokens on Bitcoin. The security, governance, and ecosystem of StarkNet will be driven by the STRK token.
The potential expansion of StarkNet on Bitcoin will depend on the approval of the OP_CAT proposal. Bitcoin Core developer Peter Todd expressed concerns about StarkNet entering Bitcoin’s scalability layer as it may introduce disruptive Miner Extractable Value (MEV) exploits similar to Ethereum. Additionally, investing significant funds in new STARKS is considered unreliable, as demonstrated by Zcash’s misuse of token inflation in the past.
After much anticipation, zkSync is now under the spotlight as the awaited token airdrop has finally arrived. According to official sources, the total supply of ZK tokens is 21 billion, with community distribution accounting for 66.7%, ecosystem incentives for 19.9% (distributed by the zkSync Foundation), investor allocation for 17.2%, team allocation for 16.1%, and Token Assembly allocation for 29.3%. Tokens allocated to investors and the team will be locked for the first year and then gradually unlocked over a three-year period from June 2025 to June 2028.
According to Dune data, as of June 11th, zkSync’s total value bridged to Ethereum was approximately 328,642 ETH, with a total of 2,926,969 bridged user addresses. In comparison, Optimism had a bridged total value of 770,890 ETH, Arbitrum had 3,794,152 ETH, and Starknet had 904,659 ETH.
However, based on Defillama data as of June 11th, zkSync’s TVL in the zkSync Era is approximately $130 million, ranking 35th. This indicates that a significant amount of funds on zkSync are still geared towards airdrops, highlighting a significant gap in comparison to other leading Layer 2 projects in terms of long-term capital retention for ecosystem development.
Apart from airdrops, zkSync’s primary focus is on driving the decentralization of the Prover network. The Prover network is now open to all ecosystem participants, aiming to enhance scalability, strength, and independence, eliminating reliance on any entity to maintain a crucial mechanism for calculating proofs to verify transactions. The Prover network milestones include: 1) Testing Integration Phase (early Q3 2024); 2) Proof Verification Phase (mid-late Q3 2024); 3) Real-Time Proof Verification Phase (end of Q3 2024); 4) On-Site Testing Verification (early Q4 2024); 5) Real-Time Verification (Q4 2024).
In conclusion, compared to ZKsync, StarkNet issued tokens earlier and has some notable projects in its ecosystem. It is beginning to plan for entry into the Bitcoin ecosystem, which is a unique approach, although there may be hurdles along the way. Arbitrum may emerge as the biggest beneficiary post-Decun upgrade, with rapid ecosystem development; however, the performance of ARB tokens may be affected due to a large unlock. Optimism, through its partnership with Coinbase and the development of Base on Op Stack, has great potential for growth, although Optimism’s individual development is slightly behind Arbitrum.
zkSync, as the latest project among the four Layer 2 titans, has high expectations. However, community feedback indicates that many are dissatisfied with the current situation. Some participants express concerns about the high failure rate, with less than 70% of the nearly several million addresses receiving airdrops. The hit rate for individual addresses is around 15%, mainly resulting in low returns, coupled with the low ZK token price, making it less appealing. Additionally, while zkSync has bridged a significant amount of assets, its TVL remains relatively small. Ecosystem development on zkSync is noticeably lagging compared to other Layer 2 projects. Furthermore, GemSwap, a decentralized exchange platform on zkSync, exit-scammed before launching, casting a shadow over the zkSync ecosystem. The future development of the Zk series remains to be observed.
