zkSync Era 2023 Dapp Ecosystem Report

Charting the Path of DeFi Expansion and Technological Innovations

Disclaimer: The insights presented in this report are based solely on data from the dapps tracked by DappRadar on zkSync, and do not encompass all the stats conducted on the blockchain as a whole.

The zkSync Era 2023 Report encapsulates a detailed analysis of zkSync’s performance and evolution over the year, spotlighting key developments, technological enhancements, and its integral role in the expansion of the blockchain and decentralized application (dapp) landscapes. This report delves into zkSync Era’s strategic growth, adoption in the DeFi sector, and the flourishing NFT marketplace, providing insights into its contributions and impact within the broader ecosystem of Ethereum Layer-2 solutions.

Key Takeaways

zkSync Era had an average of 187,177 daily unique active wallets in 2023.
The DeFi category attracted 81% of the activity, 12% can be addressed to social dapps and the rest to gaming.
The TVL exhibited a notable uptrend, climbing from $186 million at 2023’s end to $262 million presently, marking a 41% growth in just two months.
OKX NFT Marketplace and Element Market are leading NFT marketplaces on the zkSync Era blockchain, with respectively 52% and 48% dominance.
CryptoMaze and Tevaera were the top played gaming dapps on zkSync Era chain in 2023.

1. What is zkSync?

zkSync is a Layer-2 scaling solution built on top of the Ethereum blockchain, designed to improve its scalability and performance while maintaining security and decentralization. It employs zero-knowledge proofs, specifically zkRollups, to batch multiple transactions into a single transaction on the Ethereum mainnet. This process significantly reduces the gas fees and increases transaction throughput, making Ethereum more accessible and efficient for users and developers.

At its core, zkSync aims to address the limitations of Ethereum’s scalability without compromising on security. By leveraging zero-knowledge proofs, zkSync ensures that all transactions are valid and secure without requiring all data to be stored on the main chain. This innovative approach enables a higher transaction speed and lower costs, facilitating a more user-friendly experience for decentralized applications (dapps) and their users.

zkSync supports Ethereum’s native currency (ETH), ERC-20 tokens, and NFTs, making it a versatile platform for a wide range of applications, from simple transfers to complex smart contracts and decentralized finance (DeFi) protocols. With its focus on scalability, security, and user experience, zkSync represents a significant step forward in the evolution of blockchain technology, offering a practical solution to the challenges of blockchain scalability.

For a more in-depth guide on zkSync, including its technology, use cases, and potential impact on the blockchain ecosystem, refer to the following link: zkSync Comprehensive Guide.

2. zkSync chain overview

Following its official launch on 24 March 2023, the zkSync Era network quickly demonstrated its robust capabilities and attracted a significant user base. By the end of the year, the network had an average of 187,177 unique active wallets (UAW) engaging daily. This performance positioned zkSync Era fifth in terms of UAW engagement across the blockchain space. The term “unique active wallets” refers to distinct wallets interacting with zkSync Era dapps, offering a fresh perspective on user engagement rather than merely tallying a cumulative user count.

zksync era unique active wallets and activity in 2023

The network’s dapp ecosystem, as cataloged by DappRadar, comprises 224 dapps, showcasing a diverse range of applications and services available to users.

A closer examination of the activity distribution within the zkSync Era network reveals a dominant interest in decentralized finance (DeFi). DeFi applications command 81% of the total network activity, underscoring the role of financial applications in the zkSync Era ecosystem. Following DeFi, the social sector accounts for 12% of the interactions.

Dominance of zksync era activity in 2023

In terms of transaction volume, the network witnessed a total of 99 million dapp-related transactions throughout 2023. Consistent with the pattern observed in user interactions, DeFi applications maintained their dominance, contributing to 83% of the total transaction count.

Delving into the specifics at the dapp level, the top 5 dapps by UAW in 2023 on the zkSync Era blockchain were primarily DeFi applications, with four out of five falling into this category. The only exception was Dmail Network, a social dapp, which managed to secure a spot among the top performers.

Top 5 dapps based on uaw on zksync era in 2023

The following section will delve into the DeFi ecosystem on the zkSync Era network, offering insights into its size, dynamics, and key contributors to its growth and popularity.

3. The DeFi ecosystem on zkSync Era

The decentralized finance (DeFi) ecosystem on the zkSync Era network showcases significant growth and vitality, even in the absence of a native token. By the end of 2023, the total value locked (TVL) within the network’s DeFi protocols reached $186 million. At the time of writing, this figure has surged to $262 million, representing a 41% increase within a mere two months. This growth is indicative of the strong confidence and interest in the zkSync Era’s DeFi capabilities. Notably, stablecoins constitute 42% of the TVL, emphasizing their role in providing stability and liquidity to the network’s financial ecosystem.

The zkSync Era hosts a dynamic array of 96 DeFi protocols, catering to a wide range of financial services and needs. Among these, ZeroLend emerged as the most dominant protocol by the end of 2023, claiming a 31% share of the DeFi activity, closely followed by SyncSwap.

Dominance of zkzync era DeFi Protocols in 2023

The allure of potential airdrops has also played a crucial role in accelerating user adoption and interaction with DeFi protocols on zkSync Era. Many users are actively engaging with these platforms, not only to leverage the financial services offered but also in anticipation of receiving airdrops, which can significantly enhance their investment returns.

The continuous growth of the DeFi ecosystem on zkSync Era is a clear indication of its robustness and the value it provides to users. With a wide variety of protocols offering everything from lending and borrowing to swaps and liquidity provision, zkSync Era is rapidly becoming a cornerstone of the DeFi landscape.

4. The NFT landscape on zkSync Era

The NFT landscape on zkSync Era has seen a flurry of activity, with a substantial volume of trades signaling a healthy and vibrant ecosystem. The trading stats reveal an impressive number of traders engaging with the platform, indicating a robust demand and supply interplay in the NFT space.

The overall volume of NFT trades has shown growth. The historical activity graph provides insight into the market’s dynamics over time, with surges in traders count and NFT trading volume painting a picture of rapid expansion and heightened activity within the network.

zksync era NFT traders and volume in 2023

On zkSync Era, certain NFT marketplaces have emerged as preferred platforms for users. These marketplaces have been pivotal in the network’s NFT trade, contributing significantly to the overall volume and serving as hubs for collectors and creators alike.

The NFT collections on zkSync Era have varied in popularity and volume, with certain collections standing out due to their higher trading volumes. Collections like zkSync Name Service and OKX NFT Creation – zkSync Era have topped the charts, indicating a strong collector interest and market value.

top 10 nft collections onzksync era in 2023

Individual NFT sales have hit impressive numbers, with top sales reaching significant ETH values. These sales not only reflect the monetary value but also the artistic and collectible worth placed on these digital assets by the community.

In summary, the NFT sector on zkSync Era has demonstrated robust trading stats, significant volume, preferred marketplaces, and standout collections that have captured the community’s attention.

5. The zkSync Era gaming ecosystem

The zkSync Era gaming ecosystem, though nascent, is undergoing transformative growth through strategic partnerships and the integration of blockchain technologies. Despite lacking widely recognized titles so far, significant developments in March 2023 highlight the potential for substantial impact in blockchain gaming.

Key Partnerships

XLA Collaboration: A partnership with XLA, developed by the team behind Xsolla, aims to empower content creators with revenue-sharing smart contracts on zkSync Era. This initiative promises cost-effective, secure, and scalable solutions for creators to monetize their IP in the metaverse, with plans to explore further advancements through zkSync’s Hyperchain prototype.

WEMADE Partnership: Teaming up with WEMADE, the company behind the Legend of Mir series, zkSync Era plans to enhance the gaming experience with Hyperchains. WEMADE’s experience with their web3 game, MIR4, and the WEMIX Play platform, underscores the potential for seamless, scalable, and secure gaming experiences on zkSync Era.

The current gaming landscape on zkSync Era features a handful of titles that have captivated players in 2023.

Top 5 games based on UAW on zksync era in 2023

The introduction of blockchain technologies into gaming through zkSync Era offers scalability, reduced costs, and faster transactions. This then paves the way for more complex and rewarding in-game economies.

6. Hyperchains – Elevating scalability and customization

Hyperchains are zkSync’s innovative approach to blockchain scalability, introducing a Layer-3 (L3) ecosystem built for enhanced performance and customization. Utilizing zero-knowledge proofs, hyperchains enable scalable, secure, and low-latency blockchain networks, expanding the possibilities for decentralized applications and protocols.

Key Features of Hyperchains

Scalability and efficiency: Through the ZK Stack, hyperchains employ recursive scaling, allowing for theoretically limitless expansion. This method batches transactions into ZK proofs for improved compression and performance.
Customization and flexibility: Developers can customize hyperchains using centralized or decentralized sequencers or even priority queues, tailoring the blockchain to specific needs and use cases.
Security and interoperability: The Basechain acts as the primary instance, ensuring all hyperchains inherit the security of the foundational Layer-1. This structure promotes secure, fast messaging and interoperability within the ecosystem.
Infrastructure and support: Infrastructure providers like Zeeve, Fireblocks, and Chainstack support the deployment and operation of hyperchains, offering tools and services to streamline the development process.

Hyperchains stand out in the Layer-3 space, promising infinite scalability, robust security, and extensive customization options. As the technology matures, it’s poised to significantly influence the development and adoption of blockchain solutions, making scalability and performance catalysts for innovation rather than constraints.

7. Milestones of 2023

Throughout 2023 and into the early months of 2024, zkSync has achieved significant milestones and forged important partnerships, highlighting its growth and influence within the blockchain ecosystem. These accomplishments not only underline zkSync’s technological advancements but also its growing appeal among users and developers.

Key moments 2023

Processing capacity: zkSync reached a remarkable throughput by processing one million transactions within a 24-hour period, showcasing its capability to handle significant transaction volumes efficiently.
Community engagement: The platform witnessed exponential growth in its community, hitting one million unique active addresses and achieving one million Twitter followers, indicating broad interest and engagement within the ecosystem.
Launch of ZK Stack: zkSync introduced ZK Stack, a flexible and open-source framework for building customized ZK-powered Layer-2 and Layer-3 networks. This innovation enables developers to create hyperchains based on zkSync Era’s code, facilitating greater scalability and customization.
Boojum upgrade: The Boojum upgrade was introduced, transitioning zkSync Era to a STARK-powered proof system for enhanced performance. This upgrade aligns with zkSync’s commitment to privacy, scalability, and decentralization.

Highlights early 2024

Enhanced user Experience with Native Account Abstraction (AA): zkSync continued to prioritize user experience by refining its native Account Abstraction. This effort aimed at streamlining interactions and making blockchain more accessible.
Gasless payments: Integrating paymasters in platforms like Zerolend, Gravity, Mute, Holdstation, Orbiter, and Clave facilitated gasless transactions, enhancing user convenience.

These milestones and partnerships throughout 2023 and into 2024 reflect zkSync’s dynamic evolution and its commitment to improving blockchain accessibility, scalability, and security. By focusing on technological innovations and strategic collaborations, zkSync is paving the way for a more efficient and user-friendly blockchain ecosystem.

For a detailed exploration of zkSync’s journey and future developments, interested readers are encouraged to visit zkSync’s official website or follow their social media updates.

8. Closing words

zkSync Era stands as a formidable force in the rapidly evolving landscape of blockchain technology. The year 2023 was marked by dynamic growth, from achieving key technological milestones like the introduction of ZK Stack and the Boojum upgrade, to fostering strategic partnerships that have broadened the network’s reach.

The advancements detailed in this report highlight zkSync Era’s dedication to innovation and user empowerment, setting a clear direction for the future. With a focus on enhancing user experience and expanding its ecosystem, zkSync Era is not just keeping pace with the demands of the blockchain industry but is actively shaping its future. Stakeholders looking to keep abreast of zkSync Era’s journey are encouraged to seek out the wealth of information available on its official channels.