ETH revenue from gas fees grew by 4,020% in Q2 2024. While gas is currently paid in ETH, zkLink plans to offer ZKL payments at a discounted rate.
TVL increased 36,825%, reaching $527 million in Q2 2024. Layerbank, with $463 million in TVL, holds 88% of zkLink’s TVL market share.
zkLink Nova integrated with Scroll, making it the 9th network to be integrated following Arbitrum, Optimism, Base, Mantle, zkSync Era, Linea, Ethereum Mainnet, and Manta.
zkLink Nova launched a 1 million ZKL rewards campaign with Binance Web3 Wallet and a 300,000 ZKL campaign with OKX Cryptopedia.
Daily active addresses increased by 384% in Q2 2024, from 3,000 to 14,000, and new addresses grew by 322% QoQ, from 2,000 to 10,000. Peaks were observed on April 10 and June 29 due to the Token Merge and Aggregation Parade II campaigns.
Primer
zkLink is a blockchain infrastructure that streamlines dApp deployment across multiple blockchains by integrating Layer-1 (L1) and Layer-2 (L2) networks. Utilizing zero-knowledge (ZK) proof technology, zkLink ensures high throughput, low-cost transactions, and robust security. Its aggregated rollup infrastructure, secured by zk-SNARKS, integrates native cryptoassets from different blockchains into a single platform. zkLink main products include:
zkLink Nova: A universal Layer-3 rollup network addressing Ethereum's liquidity and asset fragmentation. Built on Ethereum and its L2s, it supports EVM compatibility and Solidity smart contracts. zkLink Nova aggregates liquidity from Ethereum, Arbitrum, zkSync, and Linea, among others, synchronizing states via Ethereum smart contracts. Its architecture includes sequencing, multichain settlement, execution, and offchain data availability layers.
zkLink X: An application-specific scaling engine for customized multichain dApp development, connecting L1 and L2 networks. This aggregated rollup infrastructure simplifies multichain deployment, enabling developers to more easily build high-performance applications. Its modular architecture supports customizable data availability solutions and multichain settlement schemes.
On March 12, 2024, zkLink Nova's Layer-3 public mainnet launched, supporting nine networks, including Ethereum. For a full primer on zkLink, refer to our Initiation of Coverage report.
zkLink Nova generates revenue through its centralized sequencer, which collects transaction gas fees. The sequencer then accrues these to the zkLink DAO vault. In Q2, zkLink Nova’s revenue increased by 3,934%, from $19,000 to $728,000, with average daily transactions rising by 1,740% QoQ, from 8,900 to 163,300. Since zkLink Nova launched on March 11, 2024, this jump QoQ was anticipated due to its limited operation time in Q1.
In early June 2024, zkLink Nova’s revenue and transaction volumes declined, likely due to a network outage caused by a bug in the sequencing layer. This bug disrupted transaction processing, causing delays and temporarily halting confirmations.
Currently, zkLink’s gas fees can only be paid in ETH. However, the protocol will soon offer users the option to pay with ZKL at a discounted rate, in order to promote the use of the native token. zkLink Nova plans to transition to a decentralized sequencing network, allowing ZKL tokenholders to participate in sequencing and to contribute to the platform’s revenue.
Revenue measured in ETH and revenue measured in USD followed a similar pattern. ETH revenue grew slightly more, increasing by 4,020% QoQ. Transaction fees were initially high due to strong demand, limited capacity, and early inefficiencies in the sequencer following the mainnet launch. Over time, the fees dropped significantly, allowing zkLink to maintain an average transaction fee of $0.049 or 0.0000143 ETH, down from $0.76 at launch.
Aggregation Parade Phase II — This campaign aimed to attract significant liquidity by expanding DeFi opportunities on zkLink Nova. It included various incentives and integrations, making the platform more attractive to liquidity providers and users.
Token Merge — This feature allowed the merging of stablecoins from different contract addresses into a unified token, improving the user experience by simplifying liquidity management and reducing fragmentation.
The TVL on zkLink Nova reached an all-time high of $870 million on May 12, 2024. This surge was primarily driven by the partnership with Solv Protocol and Free Bridge, which allowed SolvBTC holders on Merlin Chain to participate in the Aggregation Yield Parade.
In Q2 2024, both active and new addresses on zkLink Nova increased. The average daily active addresses rose 384% from 3,000 to 14,000. New addresses increased by 322% from 2,000 to 10,000 QoQ.
On April 10, 2024, both active and new addresses peaked at 45,700 and 37,700, respectively. These increases were largely due to the launch of the token merge feature and the accompanying Token Merge Ceremony campaign on April 9. Additionally, Phase II of the zkLink Nova Aggregation campaign began on April 14, offering users additional Nova points for interacting with dApps on zkLink Nova.
The second peak occurred on May 29, 2024, with active and new addresses reaching highs of 61,800 and 36,900, respectively. This rise was linked to the NovaDrop Round One event and Cubo Launch on OKX NFT Marketplace. Promotional activities like the Fusion Dance Parade and MemeX Challenge further encouraged users to create new addresses and engage with the platform.
Total value locked (TVL) increased by 36,800% from $1.4 million to $527 million. Layerbank held 88% of the market share with $463 million in TVL, reflecting a 230,800% increase from the previous quarter. AILayer Farm, a Bitcoin Layer 2, joined this quarter with $61 million, capturing 12% of zkLink Nova's total TVL. Other participants included Shoebill Finance, a lending protocol, with 0.07% of the total TVL; Linkswap, a DeFi trading platform, with 0.08%; and NovaSwap, an asset aggregated AMM DEX, with 0.31%.
Qualitative Analysis
Layer-3 Summit Series
zkLink held the L3 Summit at TOKEN2049 in Dubai, where industry leaders discussed challenges and innovations in Layer-3 solutions. It focused on liquidity fragmentation and the benefits of enhancing blockchain interoperability.
Integrations and Partnerships
zkLink integrated with Scroll, an EVM-compatible L2 network built on Ethereum, to improve capital efficiency and interchain connectivity, enabling users to benefit from aggregated liquidity across multiple L2 networks. Scroll is the 9th network integrated with zkLink Nova, following Arbitrum, Optimism, Base, Mantle, zkSync Era, Linea, Ethereum Mainnet, and Manta.
zkLink Nova collaborated with OKX NFT Marketplace to launch its Genesis NFT Collection Cubo. The launch caused network activity to surge, with the collection being fully minted within 4 hours of launch.
zkLink partnered with ApeX Protocol to launch ApeX Omni, a multichain liquidity trading platform powered by zkLink X technology. It offers advanced trading features and high transaction throughput.
zkLink has also been engaged in ongoing integration initiatives with the LayerZero Foundation, with an announcement expected in the next quarter.
Campaigns
zkLink launched a 1 million ZKL rewards campaign with Binance Web3 Wallet and a 300,000 ZKL campaign with OKX Cryptopedia. Both campaigns aim to boost user engagement and adoption of zkLink Nova, increasing awareness of its Layer-3 solutions. Additionally, zkLink introduced the Fusion Dance Parade and MemeX Challenge to promote liquidity aggregation and encourage community participation.
Research and Innovation
Initiated a research project with Aligned Layer to explore ZK and trust assumptions within the Ethereum network. This collaboration aimed to advance the development and application of ZK-proof technologies, contributing to the overall security and scalability of blockchain networks.
Closing Summary
In Q2 2024, zkLink Nova saw significant increases in key metrics. The total value bridged rose by 96%, from $306 million to $597 million, while TVL increased by 36,800% to $527 million. The average daily active addresses grew by 384%, and new addresses rose by 322%, likely due to the token merge announcement. During the quarter, zkLink also announced partnerships with Scroll and ApeX Protocol and launched promotional campaigns including the 1 million ZKL rewards campaign and the Fusion Dance Parade.
This report was commissioned by zkLink. All content was produced independently by the author(s) and does not necessarily reflect the opinions of Messari, Inc. or the organization that requested the report. The commissioning organization may have input on the content of the report, but Messari maintains editorial control over the final report to retain data accuracy and objectivity. Author(s) may hold cryptocurrencies named in this report. This report is meant for informational purposes only. It is not meant to serve as investment advice. You should conduct your own research and consult an independent financial, tax, or legal advisor before making any investment decisions. Past performance of any asset is not indicative of future results. Please see our Terms of Service for more information.
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Armita is a protocol researcher with a robust background in technology and blockchain. Before her role at Messari, she distinguished herself as a tech entrepreneur, executive, and advisor for various blockchain startups. Armita holds two master's degrees, one in Computer Engineering and another in Business Management, as well as a double major undergraduate degree in Physics and Pure Mathematics.
Armita is a protocol researcher with a robust background in technology and blockchain. Before her role at Messari, she distinguished herself as a tech entrepreneur, executive, and advisor for various blockchain startups. Armita holds two master's degrees, one in Computer Engineering and another in Business Management, as well as a double major undergraduate degree in Physics and Pure Mathematics.
