“Defi & Traditional Finance Aren’t Much Different, But Defi Requires Lesser Trust” –

@Ishan PandeyIshan Pandey

Student of law working on code and everything law.
Founder: Blockchain Research

Ishan Pandey: Hi, Welcome to our series “Behind the Startup”. Please tell us about your journey and the story behind ZKSwap?

Alex Lee: Since 2019, the blockchain industry has undergone breathtaking changes. Decentralised finance- DeFi-continues to grow at an exponential rate. The total value locked of Defi protocols has exceeded $10 billion. As of today, according to DeFi Pulse data, the total value locked marked $43.53 billion, and we believe the number is very likely to exceed $100 billion.

Of course, these on-chain assets would require fast, frictionless, trust-free and real-time exchange services, which has led to a rise of new decentralised exchange protocols such as Uniswap.

Although the new DEX model spearheaded by Uniswap has achieved significant development, it still has obvious drawbacks. First of all, the high gas fee could potentially repel new users from entering. Secondly, every transaction and operation requires block confirmation, which leads to transactional delays. Thirdly, Uniswap has a clear bottleneck in the number of transactions and transaction capacity per second. Those drawbacks are not unique to Uniswaps. They are common issues that exist among all DEXes.

There is a need in the market for a new product that can effectively reduce gas fees with high-speed processing and automated market-making functionality. We believe that the emergence of such a product will effectively fill the market gap.

Ishan Pandey: Please explain how ZK-rollup technology works? Further, I have read that transactions on the automated market maker (AMM) based token swap protocol does not require Gas fees. How is this possible? (Please give a technical explanation)

Alex Lee: ZKSpeed is a ZK-Roll Ups-based layer2 scalability protocol for ZKSwap. It combines practicality and engineering optimisation. It is a practical and scalable ZK-Rollups protocol. ZKSpeed achieves high layer2 TPS and significantly reduces gas fees by aggregating multiple zero-knowledge proofs, parallel processing of the PLONK algorithm, and categorising off-chain data. All data for transactions interacting with Layer1 are stored on-chain (ZK-Rollup), and data for pure Layer2 transactions are stored off-chain (Validium), and transaction hash data are stored on-chain.

Ishan Pandey: What is a Layer-2 server? Further, please explain ZKSwap’s zero-knowledge proof system and how the PLONK algorithm works?

Alex Lee: 1. ZKSpeed adopts the PLONK zero-knowledge algorithm, where all transaction types share a common trusted setup, thus eliminating the need for packaging blocks by transaction type.

2. ZKSpeed uses a GPU-implemented PLONK algorithm which runs three times faster than the ordinary CPU-implemented version. Besides, with top-notch hardware equipment, the solution significantly shortens proof generation time and improves system throughput.

3. After thorough research,…