ZKSwap AMA Recap

03 Sep 202021:08

AMA

ZKSwap AMA Recap

Cryptodiffer Team

Hello, everyone!😁

We are glad to meet here:
Alex Lee. Head developer of ZKSwap
@ZKSwap_Official

Alex Lee

Hi!
What’s up the CryptoDiffer community!
I am Alex, head of development at ZKSwap. Excited to be here!

Cryptodiffer Team

Let's start from introduction
Q1: Can you introduce yourself to our community?

Alex Lee

Excited to share our project with y’all!
Sure
As you may have know, we are a team that goes anon with regulatory concerns.
so I can’t really share too much about myself here. 😉
But what I can tell you is that our team has some OGs who joined the blockchain industry in 2013.
There are about 20 members on the team, rather distributed, and we have deep field expertise in zero-knowledge proof and smart contract development.
We began to vigorously research zero-knowledge proof in 2018 and the team was in stealth mode till aug 2020 . Our project ZKSwap, the layer2 dex with AMM model, was founded then and launched on Ethereum Ropsten network in Nov 2020.

Cryptodiffer Team

let's move on to the second question
Q2: Can you briefly tell us what is ZKSwap in 3-5 sentences?

Alex Lee

Sure
As our project name ZKSwap suggests,
ZK means zero-knowledge, swap means it’s a dex
so in short, ZKSwpa is an AMM model layer2 dex with full Uniswap functionality but 100x faster, with zero gas fee for l2 transactions likes l2 transfer, swap, adding/removing liquity, and real-time confirmation.
Let me add a little more about the tehcnology we are based on.
ZKSwap, although is a layer2 dex, all transactions and funds are as safe as the underpinning layer1 i.e. Ethereum.
It’s safe because it is based on a technology we developed and named ZKSpeed, a combination of ZK-Rollups, Validium and Plasma, which ensures fund security and layer2 accuracy.
We made innovations based on the current Rollup solutions and introduced ZKSpeed, the Practical Rollups, incorporates existing
layer-2 solutions’ strengths and addresses their weaknesses with a balanced trade-off.
And,
ZKSpeed implements a deeply optimize version of the latest zero-knowledge proof scheme PLONK, adds aggregation of multiple proofs, optimizes verification circuit, and enables GPU-compatible algorithms for higher efficiency.
To be honest, ZK-Rollups are very difficult. Not many tams have the skillset to develop. We do. 😉
Layer2 is the future. And our goal is not only to launch a great defi product on layer2, we want to build the layer2 infrastructure for defi.
As you can tell, we are super thrilled and confident that we will lead the layer2 wave of defi.
It’s quite a long intro. I’ll stop here. Let’s get to more details maybe with community questions.

Cryptodiffer Team

The last question from us before we open the chat
Q3: Let`s now talk about the milestones you have achieved so far and about your upcoming plans?

Alex Lee

Yeah, it has been a great journey since we kicked off the project
As I mentioned, we launched on the Ethereum Ropsten testnet in Nov 2020. After that it was massive testing and optimization.
We have hosted 4 large scale testnet incentive programs and over 60k ppl around the world joined the testing.
I would say getting respected angle investors was a small milesone for us.
We closed an Angel round of $1.7m in late 2020, led by by Bixin Capital, the investment arm of Bixin, a long-time bitcoin miner and wallet operator in China and Other investors include Chinese crypto and equity funds such as SNZ Capital, FBG Capital, and Longling Capital.
Passing the security audit provided by ABDK, CertiK and SlowMist recently was another major milestone.
Security is the most important feature for any defi project. And we treat it with utmost priority.
The ZKSwap system's security mainly includes the security of the layer1 smart contract and the circuit security of the layer2. We worked closely with the three auditing teams on security auditing for all modules and the feedback from the audit team gives us the green light to go live on the mainnet. The audit reports from CertiK and Slowmist are available in our github.
The upcoming launch on the Ethereum mainnet will definitely be another milestone. Our launch on the Ethereum mainnet is scheduled on Feb 14th, 20:00 GMT+8.

Cryptodiffer Team

Perfect!
Thank you for such detailed and interesting answers!

It is time to move to the community questions part.

Cryptodiffer Community

Lets suppose your team one day disappear and I want to get my tokens back, stuck somewhere in your L2. Am I able to retrieve my money using ETH contract and avoid using your L2 infrastructure (that would disappear with a team)? That's the way my money was safe on Etherdelta.

Alex Lee

Wow, one of the best questions! Yes, your funds are SAFE at all times because of Smart Contracts and ZK-Rollups Technology. Thanks to ZK-Rollups technology and smart contracts, users’ assets on ZKSwap will always be locked in the layer1 smart contracts even if the ZKSwap team disappers, and no one but the user will have access to these funds. That’s the merit of a decentralized exchange and the security advantage of ZK-Rollups technology. We have even simulated an emergency shutdown event to show the community this: https://medium.com/zkswap/the-last-test-before-mainnet-zkswap-emergency-shutdown-simulation-started-dc582143709a.

Cryptodiffer Community

What are the advantages of ZK-Aggregation technology and how it differs from other protocols and how can the transaction TPS be increased by multiple size orders?

Alex Lee

Awesome question.
The logic of the Aggregative Proof is actually elementary. In a basic layer2 solution, one block corresponds to one proof of validity, and the on-chain contract verifies the proof. The average block time of Ethereum is 15s. If the on-chain contract can verify the validity of multiple proofs at one time, the cost amortized on each transaction will be greatly reduced.
Following this concept, ZKSpeed implements an Aggregative Proof scheme. With Aggregative Proof, it is still one proof for one layer2 block. Still, it aggregates multiple proofs generated within a period of time or a fixed number of blocks, and verifies their validity with zero-knowledge proof. Think of the verification process as some circuit. In this way, one on-chain verification can verify the validity of multiple layer2 block proofs.

Cryptodiffer Community

How will you deal with fraudulent pools on ZKSwap, of which there are many on Uniswap now? And what will be the conditions for listing new tokens on the ZKSwap?

Alex Lee

Another great question! Wow, this communit is on fire.
The initial batch of listing will be managed by the ZKSwap team, hence no fraudulent pools. https://medium.com/zkswap/zkswap-announces-trading-pairs-for-proof-of-transfee-and-proof-of-liquidity-events-39ff036e4e15.

In the future, listing will need community voting and ZKS pledging, which will root out a large number of fraudulent listings.

Cryptodiffer Community

ZKswap recently introduced Practical ZK-rollups--ZKSpeed, Achieving High TPS and LOW GAS FEES in real Layer2 DeFi usecases. The problem with this is that very little revenue is generated for the team and project; so how would you maintain the team and project in long term?

Alex Lee

Yes, the revenue from the dex will be 0.3% transaction fees per l2 transaction. But the revenue does not go to the team. Among them, 0.25% will be automatically allocated to the liquidity provider, and the other 0.05% will be used as the protocol fee.

One hundred fifty million ZKS will be allocated to the ZKSwap team, with a one-year lockup from the mainnet launch. Starting from the second year, 5% of the total token supply will be distributed to the ZKSwap team every year till the end of the fourth year.

As of now, our team has invested heavily in l2 node servers and all operation expenses are coverd by ourselves.

Cryptodiffer Community

You know that there are many investors in US. Maybe I think they can boost the volume and price of the ZKS itself. But somehow, they’re restricted to using ZKSwap for some reason. how ZKSwap team solve this?

Alex Lee

No, due to regulatory concerns and lack of clarify for defi, we will restrict services to the us users and all faco sanction listed countries.

Cryptodiffer Community

What are your plans for developing mobile applications for Android and IOS? Indeed, in our time, many people follow the market and trade from the phone.

Alex Lee

A great question. Mobile app for both iOS and Android are coming! Stay tuned!

Cryptodiffer Community

ZKSwap launched Proof-of-Liquidity-Mining and Proof-of-TransFee. What are the rules for participating in events and what rewards can I receive?

Alex Lee

Proof of Liquidity Mining(PoL)
PoL Rewards: 1.5 million ZKS in total;
How to Participate: Users add liquidity of the 5 trading pairs specified below on ZKSwap and deposit corresponding ZKSwap LP Tokens on layer1 to get ZKS rewards. The PoL webpage interface and a detailed tutorial will be available after the mainnet launch. The ZKS reward in the PoL prize pool will be distributed linearly in real-time based on the percentage of LP Token deposited by the user to the total deposited LP Token.
PoL Duration: 7 Days(The launch date will be announced soon);
Five PoL Trading Pairs: ZKS / USDT, ETH / USDT, USDC / USDT, WBTC / USDT, and HBTC / USDT;
The reward pool for each trading pair is as follows:
Image for post

Proof-of-TransFee (PoT)
PoT Rewards: 1.5 million ZKS in total;
PoT Rules: Each trading pair will get 10% of the total PoT rewards; the user will get ZKS rewards based on the percentage of his/her trading volume to the total trading volume of the pair of that day;
PoT Duration: 7 Days(The launch date will be announced soon);
Ten PoT Trading Pairs: ZKS / USDT, SUSHI / USDT, UNI / USDT, 1INCH / USDT, LON / USDT, WQTUM / USDT, AAVE / USDT, LRC / USDT, ALPHA / USDT and DODO/ USDT.

Cryptodiffer Community

How can the ZKSwap system handle nearly 10 million transfers and swap transactions every day, without compromising the quality of the user experience?

Alex Lee

Based on the team’s deep optimization of the ZK-Rollup Plonk Scheme, ZKSwap’s TPS can be over 100. It means the entire ZKSwap system can handle nearly 10 million transfers and swap transactions every day.

From the users’ point of view, their experience will be just like centralized exchanges, but with zero gas fees, real-time confirmation and self-custody of assets.

Cryptodiffer Community

What is the Proof-of-gas consensus? Why did ZKswap decide to combine the Proof-of-staking and Proof-of-gas consensus for mining events after mainnet lauch? What advantage does this have?

Alex Lee

Hey great question. ZKSwap is a defi product and not a standalone public chain, so here Proof-of-Staking and such are not referring to consensus mechanisms but rather community mining types.

Community mining includes:
Proof-of-Liquidity-Mining (15% of the total supply);
Proof-of-Gas (10% of total supply);
Proof-of-ZK-Snarks (15% of the total supply);
Proof-of-TransFee (10% of the total supply);
Smart Contract Staking (10% of the total supply);

Cryptodiffer Community

Is there a level2 address that is same/corresponding to level1 ERC20 address? Is this level2 address available to be accessed without using Zkswap dapp/contract? For example, can these tokens on L2 created using Zkswap be used to trade on another Level2 swap exchange?

Alex Lee

Hi another great question.
Yes, there is a l2 address that is the same as the l2 address. What you are refering to is a great issue pertaining layer2 solutions, the composabilty issue. For now, the composability will be only availble for defi projects that use the same l2 solution, which is why we are working hard with leading defi projects, wallet providers and promote the ZKSpeed standard.

Cryptodiffer Community

Apart of the Zk-Rollup, ZKSWAP has other interesting mechanism called Zk-sync, so can you explain what is the difference between both ?

Alex Lee

Thanks. Great questions.
When ZKSwap first started, ZKSwap was based on the ZKSync framework. As we delve deeper into the development, we learned that ZKSync had many issues to be solved. Zksync only supports payment and does not support token swap, and based on its open-source code, its TPS is less than 10, its layer2 still costs gas fees, and the fee is somewhat expensive. So in the subsequent development, we introduced the ZKSpeed Protocol, a practical zk-rollups solution ,incorporates existing layer-2 solutions’ strengths and addresses their weaknesses with a balanced trade-off.

Cryptodiffer Community

Do you have plans to expand your 2-layer technology to make real-time exchanges to other projects? Many partners will benefit from this technology through agreements and sponsorships. do you have plans to expand?

How are your marketing plans, in order to build a great community around you?

Alex Lee

Great question. That’s exactly what we are working towards.
Mid-term plan: Cooperate with exchanges and wallet service providers, support ZKSwap’s Layer 2 standard, support all ERC20 free transfers (including stable coins, etc.), and support private transactions and private exchanges.
Long-term plan: Abstract the technology behind ZKSwap, build a standard Layer 2 protocol, support more DeFi projects, and use ZKSwap technology to build future DeFi on Layer 2
You will see more about ZKSwap all over the place, either mainstream media, partners, influencers and in communites like CryptoDiffer. We are working hard to introduce ZKSwap to the whole blockchain community.

Cryptodiffer Community

Does ZKSwap only support ERC-20 standards? Are you planning to implement cross-chain technology in the future?

Alex Lee

Yeah for now it’s ERC20 only. Will let the community know when we plan to support multi-chain.

Cryptodiffer Community

What types of transactions does ZKSwap support? Is it possible to add margin trading and isolated margin trading?

Alex Lee

Now we support full Uniswap like functionalities on layer2, so transfer, swap, adding/removing liquidity.

Cryptodiffer Community

80% of DEFI's applications and value are on the Ethereum network and all existing problems can be resolved in Ethereum 2.0. Will the ZKSwap project be in demand with the release of Ethereum 2.0?

Alex Lee

Yeah sure, as Vitalik mentions in his tweet, Rollups will be the main scalability solution in the mid/short term, and it will compliment with Ethereum 2.0 once ready.

Cryptodiffer Community

How do you plan to decentralize the governance of ZKSwap to achieve the goal of transparency and fair treatment of its members?

Alex Lee

Great question, we have a token economics design that’s community centric. 60% of tokens to community via mining and airdrops. Check it out here: https://medium.com/zkswap/zkswap-economy-whitepaper-31d57b10cae6

Cryptodiffer Community

Since the ZKSwap is completely decentralized, what will be the role of ZKS token holders in governance?

Alex Lee

Awesome question.
ZKS is the protocol token. ZKS is a major component of the ZKSwap system. First of all, 60% of the token supply is allocated to community, 55% to community mining, 4% to airdrops to early holders and 1% airdrop other DeFi projects.

The token will be used in incentivizing the community to provide liquidity, generating and verifying the zero-knowledge proof generation and verification, using the product and contributing to the ZKSwap system in many other ways.

For the ZKS holders, the token is for ZKSwap governance, to vote or pledge to list tokens, and pledge ZKS to be a layer-2 PoZK node

Cryptodiffer Community

How will ZKSwap incentivize liquidity providers and attract market makers? How do you take market share from giants like Uniswap?

Alex Lee

Soon after launch, we will kick off the liquidity mining programs. Check here: https://medium.com/zkswap/zkswap-announces-trading-pairs-for-proof-of-transfee-and-proof-of-liquidity-events-39ff036e4e15

Cryptodiffer Community

On your page you have this new part called Incentive Programs where you have a Proof-of-Gas Testnet Incentive Program that already expired, how will this programs work, will anyone be able to be part of them?

Alex Lee

We have wrapped up all testnet incentive programs. Rewards to testnet incentive programs will be sent to winner’s l2 addresses shortly after we launch on the Ethereum mainnet. For those who have missed the testnet incentive programs, no worries, we have more coming. Just stay tuned with us by following our social media channel above.

Alex Lee

Great questions guys! I am really impressed.
I think it’s a good time to wrap up.
Do come to our community for more:
And You can find us here🥰:
ZKSwap Official Website: https://zks.org/en
ZKSwap APP: https://zkswap.app
ZKSwap Twitter: https://twitter.com/ZKSwapOfficial
ZKSwap Official Telegram group: https://t.me/zkswapofficial
ZKSwap Discord: https://discord.gg/ZRxS8fYTDv
ZKSwap Medium: https://zkswapofficial.medium.com/
ZKSwap Github page: https://github.com/l2labs