State of Zero Knowledge 2023 Report by Cryptomeria Capital Illuminates Key Insights from the ZK Landscape

Published: November 22, 2023 at 1:53 pm Updated: November 22, 2023 at 1:58 pm

In Brief

Scaling, privacy and forthcoming ZK developments take center stage in Cryptomeria Capital’s latest State of Zero Knowledge 2023 Report.

Diving into the dynamic landscape of Zero-Knowledge (ZK), Cryptomeria Capital‘s comprehensive report titled: State of Zero Knowledge 2023, highlights the pivotal significance of scaling and privacy in the emerging Web3 realm.

The report provides significant insights from the Zero-Knowledge sector, offering an overview of privacy, scaling and forthcoming ZK developments — appealing equally to both individuals and organizations.

For a complete overview of the ZK landscape, read the complete report here: https://research.cryptomeriacapital.com/Cryptomeria_Capital_State_of_Zero_Knowledge_November_2023.pdf

Web3 has witnessed an impressive surge in developer activity over the past seven years, reaching over 61,000 by 2022; a 66% increase compared to three years prior.

Despite a 27% dip in developer numbers since October 2022 largely attributed to newcomers, the overall trend remains positive. As of October 1, 2023, there are 19,300 monthly active open-source developers.

“The Zero-Knowledge sector is poised for substantial growth in the financial realm, driven by an increasing demand for privacy-centric solutions,” said Vadim Krekotin, Founding Partner at Cryptomeria Capital. “With advancements in cryptographic technologies and a growing awareness of data security, the sector is set to experience a surge in investments and innovation, paving the way for a bright financial future.”

The report features insights from prominent Web3 and ZK conglomerates including:
Taiko, Scroll, Linea, IOSG Ventures, Arthur D. Little, Kakarot, O(1) Labs, Manta Network, AltLayer, Cysic, Kroma, ZKSync, Starknet, SpaceShard, and Intmax.

Media partners for the report are Metaverse Post, ZK Seasons and Starknetics.

A Deep Dive into the Zero-Knowledge Landscape

The report sheds light on the upcoming noteworthy milestone on the horizon — EIP-4844, colloquially known as Proto-Danksharding, poised to be a game-changer for the Ethereum “Cancun” upgrade.

The update targets a reduction in data availability costs for Rollups, thereby amplifying data storage efficiency, ZK-proof generation, and circuit efficiency.

In the realm of Zero Knowledge Protocol (ZKP) acceleration, ASICs will play a crucial role, while FPGA currently serves computationally intensive ZK use cases. The synergy of progress in ZKP schemes and hardware advancements holds the promise of enhancing scalability, reducing fees, fortifying privacy and fostering interoperability within Web3.

“ZKPs offer a transformative paradigm for real-world applications. From enabling confidential transactions in finance to ensuring patient data safety in healthcare, they provide a reliable way to authenticate identities and share sensitive information without compromising privacy,” said Alex Mukhin, Co-founder and Managing Partner at Cryptomeria Capital.

“ZK paves the way for a more transparent and trust-filled future by being able to greatly enhance KYC, DID and other security mechanisms used across the web,” he added.

The year 2023 witnesses substantial progress in the ZK rollup ecosystem, particularly in zkEVM functionality and EVM compatibility.

The adoption of specific solutions by various projects signals the emergence of practical, universally applicable solutions in the sector. Simultaneously, the evolution of zkVMs as L2-focused development environments is shaping a unique development experience.

While still in the nascent stages of development, ZKML is anticipated to find applications in data security and secure ML model training. This includes Privacy-Preserved Model Evaluation, Computational Integrity, On-Chain Model Verification, and AI Oracle Proof creation.

Addressing Sequencer challenges in blockchain systems, various approaches are being explored, including shared, outsourced or dedicated sequencer solutions.

Likewise, it was found that Decentralized Sequencers Proof of Authority, Proof of Stake, Miner Extractable Value auctions and Proof of Elapsed Time are concepts currently in their early stages, with effective implementation still in the developmental phase.

Cryptomeria Capital’s comprehensive report provides a detailed snapshot of the evolving landscape of Zero Knowledge, shedding light on the pivotal advancements and challenges shaping the future of this dynamic field.

Cryptomeria Capital is an early-stage VC firm based in Dubai with presence in Singapore and HongKong. The firm believes decentralized projects, cryptocurrencies, and Web 3.0 will dramatically reshape economic relations and focuses on ventures, tokens, and projects related to blockchain technology and crypto assets. Cryptomeria Capital supports transformation by providing early-stage financing for ambitious projects in a rapidly developing industry.

About the Research Partners:

Kakarot is an (zk)-Ethereum Virtual Machine implementation written in Cairo. Kakarot is Ethereum compatible, i.e. all existing smart contracts, developer tools and wallets work out-of-the-box on Kakarot.
SpaceShard is a full-cycle blockchain development company — with its own R&D department — focusing on Zero-Knowledge Proof technology within the Starkware ecosystem.

Scroll is the community-first, native zkEVM built upon Ethereum—designed for scaling without sacrificing security, developer or user experience. You can read an interview with Scroll here.

Taiko is a decentralized, Ethereum-equivalent ZK-Rollup.

Linea is a developer-ready ZK rollup powered by Consensys, enabling the next generation of Ethereum builders.

Kroma aims to develop a universal ZK Rollup based on the Optimism Bedrock architecture.

Manta Pacific is the first EVM-equivalent ZK-application platform that is scalable and secure through Celestia DA and Polygon zkEVM. You can read an interview with Manta here.
O(1) Labs is a global and remote company that incubated the Mina Protocol. The team operates on the cutting edge of Web3 and zero-knowledge-proofs.
IOSG Ventures is a pioneering crypto fund founded in 2017 that invests in the future of Web3. As a thesis-driven firm, it assists founders in developing community-driven protocols that are primed to transform the crypto landscape.
Cysic is a hardware developer that accelerates zero-knowledge proof generation.
AltLayer is an open and decentralized interlayer for rollups.
zkSync is a Layer-2 protocol that scales Ethereum with cutting-edge ZK tech.
Starknet is a decentralized layer-2 network that enables Ethereum to scale securely and dapps to achieve unlimited scale for transactions and computation.
INTMAX develops innovations in ZK implementation, making it a unique layer-2 rollup network that offers low cost, security, privacy and scalability.

Intellectual Partner:

Arthur D. Little is a global management consulting firm known for its expertise in strategy, innovation, and technology, providing advisory services to businesses and governments.

Media Partners:

Metaverse Post (MPost): Metaverse Post is a rapidly expanding media platform covering the exciting realms of Web3, AI, Metaverse, and VR. With a staggering 3,000,000 monthly users, MPost has captivated a wide-ranging English-speaking audience. The content resonates with readers seeking cutting-edge insights into the latest technological advancements and trends. Renowned figures such as Animoca Brands, Paris Hilton, NFT LA, and many others have retweeted their articles, cementing MPost reputation as a trusted source of information.

Starknetics: Being a part of the Twitter Media Group, Starknetics has a primary goal of establishing a warm and inclusive community hub that caters to the needs of passionate Starknet enthusiasts and explorers. Our utmost dedication lies in delivering exceptional infographics and timely updates that not only deepen your comprehension but also enrich your overall involvement within the dynamic Starknet Ecosystem.

ZK Seasons: ZK Seasons is a series of community meetups that take place around the globe with the goal of expanding the network of ZK enthusiasts. The events are supported by leading investment funds and media companies.

Disclaimer

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About The Author

Victor is a Managing Tech Editor/Writer at Metaverse Post and covers artificial intelligence, crypto, data science, metaverse and cybersecurity within the enterprise realm. He boasts half a decade of media and AI experience working at well-known media outlets such as VentureBeat, DatatechVibe and Analytics India Magazine. Being a Media Mentor at prestigious universities including the Oxford and USC and with a Master’s degree in data science and analytics, Victor is deeply committed to staying abreast of emerging trends.
He offers readers the latest and most insightful narratives from the Tech and Web3 landscape.

Victor Dey