Three altcoins to buy in 2023 if this bull rally continues
- Zk-rollups, layer-2 scalability solutions for Ethereum have gained popularity with the highly anticipated token launch of zkSync.
- As the zero-knowledge narrative heats up, experts eye Aleph Zero’s AZERO token, Syscoin’s SYS and Mina Protocol’s MINA for 2023 gains.
- AZERO, SYS and MINA yielded upwards of 15% over the past week for holders, as the Zk-narrative gains popularity.
The zero-knowledge (Zk) Ethereum scalability narrative gained popularity with the upcoming launch of Polygon’s zero-knowledge Ethereum Virtual Machine (zk-EVM). Polygon’s scaling solution for the Ethereum Virtual Machine boasts increased productivity and lower transaction fees by verifying transactions in batches on the Etherium mainnet.
Several other zk-rollup protocol’s tokens have yielded double-digit gains for holders over the past week.
Also read: Paxos to halt Binance USD issuance after SEC lawsuit
Zk-rollups narrative heats up, AZERO, SYS and MINA witness price rally
Zero-knowledge rollups are layer-2 scaling solutions that increase throughput on the Ethereum mainnet by moving computation and storage off-chain. This has fueled the popularity of these rollups and thousands of transactions can be processed in a single batch, boosting the scalability of the underlying blockchain.
Following the popular Artificial Intelligence (AI) narrative and DeFi layer-2 protocol tokens, zk-rollups have garnered the attention of analysts and traders on crypto Twitter. Aleph Zero’s AZERO, Syscoin’s SYS and Mina Protocol’s MINA token have yielded upwards of 15% gains for holders since February 6.
Why does Ethereum need Zk-rollups?
Ethereum has inherent scalability problems due to its design. And although there is a roadmap to eventually solve these issues, this process will take a long time. Rollups help alleviate congestion by 'rolling up' transactions into batches that are executed off-chain.
Zk-rollups store all addresses and respective balances in a merkle tree, a data structure used for verification and synchronization of data. The root of this “balance tree” is stored in an on-chain smart contract.
Architecture of Zk-rollups
They have 3 main tasks: Handling deposits, transfers, and withdrawals. The image above represents a (simplified) ZK-architecture.
Zk-rollup tokens to watch out in 2023
Aleph Zero is a layer-1 privacy-enhancing blockchain that ensures scalability, low transaction fees and relatively high security for developers. The protocol recently announced a series of developer focused events as it hosts a new high utility NFT marketplace.
AZERO price is up nearly 10% since February 12, since the launch of ArtZero, the NFT marketplace on the Aleph Zero blockchain.
AZERO price chart
Syscoin (SYS) is a permissionless blockchain-based cryptocurrency that is built on the Bitcoin scripting system and its tokenomics are based on Ethereum’s EIP-1559 proposal, without a capped maximum supply.
SYS has yielded 17.3% gains for holders over the past week. Developers behind the protocol announced that SYS will be the native token of the upcoming optimistic Layer-2 project. This boosts the utility of the token and acts as an incentive to holders in the market.
SYS price chart
A zk-rollup that is also the world’s lightest blockchain, Mina Protocol, recently witnessed bullish developments. The protocol recently announced a funding opportunity for developer proposals in the zkIgnite innovation program.
⚡️ All are welcome in zkIgnite, Cohort 1 — Here’s how you can participate:
— Mina Protocol (@MinaProtocol) February 7, 2023
∙ Build a zkApp business or tooling
∙ Give feedback on proposals
∙ Become an elector
∙ Mentor builders
∙ Refer a friend
Sign up here: https://t.co/WdNKDsR61s and keep reading to learn more
On February 15, the zk-rollup invited the first cohort of developers to build on Mina Protocol. As the developer ecosystem on Mina Protocol flourishes, it is expected to boost the utility of MINA among other zk-rollup projects.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
