What is ZKSwap? How does the project use ZK-Rollup technology?

What is ZKSwap?

ZKSwap [ZK-Rollups based Swap protocol] — protocol and decentralized crypto exchange based on ZK-Rollup technology.

ZKSwap users can trade Ethereum (ETH) and ERC-20 tokens, as well as earn exchange management tokens (ZKS) in community mining [Community Mining].

ZKS holders can vote on the listing of tokens on ZKSwap, as well as promote or propose initiatives to change the operation of the protocol.

What is ZK-Rollup?

ZK-Rollup is a second layer solution on the Ethereum network based on zero-knowledge proof [zero-knowledge proof].

ZK-Rollup reduces the load on the main network: it groups transactions and takes part of the calculations outside of Ethereum.

The solution continuously generates zero-knowledge proofs (zk-SNARKs). ZK-Rollup uses them to enable transactions on the blockchain and negotiate the states of the main network and the second layer.

What is community mining?

Community mining is maintaining the liquidity and security of the infrastructure ZKSwap exchange users. Community mining participants receive rewards in ZKS tokens.

Community mining includes:

• providing liquidity [Proof-of-Liquidity-Mining, PoL]. During the PoL, the exchange will distribute 14 million ZKS;
• paying fees on the Ethereum network [Proof-of-Gas, PoG].During the PoG, the exchange will distribute 9 million ZKS;
• generation of zero-knowledge proofs [Proof-of-ZK-Snarks, PoZK].During the PoZK, the exchange will distribute 14 million ZKS;
• trading on ZKSwap [Proof-of-TransFee, PoT]. During the PoT, the exchange will distribute 9 million ZKS.

ZKSwap is working on implementing ZKS staking [Smart Contract Staking, PoS]. During the staking, the exchange will distribute 9 million tokens.

Who created ZKSwap and when?

The ZKSwap team remains anonymous. Project Manager Alex Lee [Alex Lee] V interview for Huobi Global reported that ZKSwap employs about 20 experienced blockchain developers:

“Many team members joined the crypto industry in 2013 and began to actively explore solutions based on zero-knowledge proof in 2018. Our team has deep hands-on experience in smart contract development and zero-knowledge proof research.”

ZKSwap launched a testnet in November 2020. In the same month, the project raised $1.7 million in funding from Bixin, SNZ, FBG and Longling Capital.

On February 15, 2021, the ZKSwap main network was launched. On February 20, the exchange held an airdrop of 80 million ZKS.

How does ZKSwap work?

On ZKSwap, users trade directly with each other via Ethereum smart contracts. They can also add assets to the ZKSwap liquidity pool.

Protocol available via interface zks.app. To connect, you need an Ethereum wallet, such as MetaMask.

ZKSwap processes user transactions at the second level and is synchronized with the main network. With this, ZKSwap eliminates the disadvantages of Ethereum: high transaction fees and low network bandwidth.

ZKSwap architecture includes:

• user interface (UI);
• Ethereum smart contracts [ZKSwap smart contracts];
• zkswap server. Includes: mempool [Mem Pool]block suggestion module [Block Proposer]network state storage module [State Keeper] and evidence server [Prover Server].

ZKSwap smart contracts are the key link between Ethereum and the exchange server. They store tokens and update user balances.

The ZKSwap server processes transactions independently of the Ethereum network. It works like this:

• user transactions enter the mempool;
• block proposal module groups user transactions;
• the state storage module receives transaction data and updates the status of tokens at the second level;
• the evidence server receives the updated state of the network and confirms the validity of the transactions. To do this, it generates a non-interactive zero-knowledge proof (zk-SNARK) using the algorithm PLONK [Permutations over Lagrange-bases for Oecumenical Noninteractive arguments of Knowledge];
• the proof server sends the zk-SNARK to the ZKSwap smart contract in Ethereum.

ZKSwap smart contract receives zk-SNARKs and confirms user transactions. After that, they can withdraw tokens to Ethereum wallets.

How to get ZKS tokens?

The exchange credits ZKS to participants in airdrops and community mining. ZKS is also traded on Huobi, Poloniex, Uniswap and other crypto exchanges.

The total emission of tokens is 1 billion ZKS. ZKSwap will distribute 60% of this amount (600 million ZKS) to users of the protocol through community mining and airdrops.

Team ZKSwap will receive 15% of the issue (150 million ZKS) a year after the launch of the main network. Another 25% of the tokens will be received by ZKSwap ecosystem developers, investors, project consultants, as well as Uniswap and Gate.io exchanges for providing ZKS liquidity.

How is ZKSwap developing?

The exchange began operations on February 15, 2021. A month after the launch, the volume of funds blocked in ZKSwap exceeded $1 billion

In March, the exchange distributed 9 million ZKS under Proof-of-Liquidity and Proof-of-TransFee.

The launch will take place in the second quarter ZKSwap V2. The new version will support custom listings and non-fungible tokens (NFTs).

In the third quarter of 2021, the exchange will release an SDK for payment applications and services based on ZKSwap.