Zero-knowledge (ZK) technology is gaining traction in the blockchain space, driven by its ability to provide privacy, scaling, and identity solutions. Validator service provider, ZKValidator has recently released a quarterly report titled “The State of ZK” that explores insights from the zero-knowledge space. The report highlights major and emerging use cases, research, product launches and notable investment rounds.
The cryptographic method of zero-knowledge proofs (ZK-proofs) allows one party to verify data or a statement without exposing the information. Privacy stands out as the industry’s most significant driver of adoption at 12.9%. Scaling is the second most prominent use case for zero-knowledge technology, with 9.46%. Identity solutions and new zero-knowledge use cases rank third and fourth, indicating that the blockchain ecosystem is interested in exploring how zero-knowledge technology can be applied in identity management and other novel applications. Zero-knowledge machine learning (ZK-ML) was also identified as the space’s most attractive new use case.
The report’s insights were driven by the company’s work with industry participants, including ZK Hack, zkSummit, rhino.fi, Geometry, and University College London. ZKValidator also gathered data and information from participants in the production and management of the Zero Knowledge Summit 9 in Lisbon on April 4.
One of the highlights of the report is the launch of Polygon and zkSync’s zero-knowledge Ethereum Virtual Machine’s (zkEVM). Having launched over a month ago, zkSync Era has attracted more daily active users than Polygon’s zkEVM. The report speculates that rumors of a possible zkSync airdrop later in 2023 may be a reason for the gulf in user numbers between the two zkEVMs.
The report also covers the development of new products, including Geometry’s Semacaulk, a new zero-knowledge set membership protocol that offers gas savings over Merkle-tree constructions while ensuring proofs can be generated quickly and verified for roughly the same gas cost.
The $7 million ZPrize competition in 2022 helped drive innovation of ZK technology, with multiscalarmultiplication (MSM) on Android mobile devices stemming from the development competition aimed at fostering ZK solutions. According to ZKValidator’s report, MSM improved proof generation time from 2.4 seconds to around half a second, making mobile payments in ZK easier.
The report also mentioned a paper proposing a fast GPU-accelerated zero-knowledge proof system that reduces proof generation time in ZK-proofs by leveraging hardware similarities of GPUs. Various other zero-knowledge projects were also identified in the fields of decentralized identity, interoperability, and payments within the Ethereum and Polkadot ecosystems in 2023.
Investments were also highlighted, with Ethereum research and development firm The =nil; Foundation raising $22 million to continue the development of the Proof Marketplace. The solution allows layer-1 and layer-2 blockchains to outsource the production of ZK-proofs. ZK-proof developer Proven raised $15.8 million in a seed round while Polyhedra Network raised $10 million for its blockchain interoperability infrastructure platform.
Zero-knowledge rollups have been in the spotlight throughout the first quarter of 2023. Polygon released its open-source zkEVM Ethereum scaling technology to mainnet on March 27, while several Ethereum decentralized finance protocols have adopted zkSync since its alpha launch in March 2023.
Overall, zero-knowledge technology continues to gain momentum in the blockchain space, driven by its ability to provide privacy, scaling, and identity solutions. As new use cases emerge, it’s likely that we’ll see more investment and adoption of ZK technology in the coming months and years.
In conclusion, the quarterly report on zero-knowledge (ZK) technology highlights the significant drivers of adoption in the blockchain space. The report reveals the growing interest in privacy, scaling, and identity solutions using ZK technology, with the identification of various new use-cases. The report also provides insights on the development of new products and the emergence of ZK-ML as a new use-case. Furthermore, the report highlights the importance of competitions, such as the ZPrize, in driving innovation of ZK technology. As investment in ZK technology continues to grow, it’s evident that it will play a vital role in the future of blockchain.
