Deep Dive: Rollups
White Star Capital Digital Asset Fund - newsletter #76
Source: Matter Labs
Over the last couple of months, the excitement over ZK rollup technology has been making headlines. We wanted to take a moment to cover the landscape and the latest news.
What is a rollup?
Rollups perform transaction execution outside the layer 1 and then post the batched transactions to the layer 1 for consensus. This allows for lower fees and higher scalability.
ZK and Optimistic rollups
Optimistic rollups rely on fraud proofs to scale, offer ~500 TPS (transaction per second), and are more EVM (Ethereum virtual machine) compatible as the rollups are already similar to Ethereum mainet. Arbitrum and Optimism are already live and have 2.5 billion in TVL.
ZK rollups rely on validity proofs to scale and offer more than 2000 TPS, however, the technology is more complex and general-purpose EVM is harder to achieve. Starkware is currently live providing application-specific ZK tech to dYdX, Immutable X, DeversiFi, and Sorare.
Vitalik’s personal view is that in the short term, optimistic rollups are likely to win out for general-purpose EVM computation, but in the medium to long term ZK rollups will win out in all use cases as ZK-SNARK technology improves.
Latest ZK news
zkSync launched the first EVM-compatible ZK rollup on Ethereum’s testnet on Feb 22 drumming up excitement about its possibilities. zkSync aims to be a permissionless ZK rollup that allows protocols to build and deploy decentralized apps in a low fee and scalable environment
Matter Labs, the organization behind zkSync, announced a 200 million DAO to help fund the zkSync ecosystem through public goods and development grants
StarkWare, the current leader in ZK tech, is reportedly raising 100 million at a 6 billion valuation.
Immutable X raised 200 million at a 2.5 billion valuation in Mar 2022
🔦 White Star & Portfolio Spotlight
Index Coop gains listing on Gemini for both governance (Index) and DeFi Pulse Index (DPI) tokens
This marks a major exchange listing for trading of $INDEX and $DPI
Last weekend, Exclusible hosted Bob Sinclar for a Metaverse party in Decentraland
It was the first DJ dance competition in Decentraland.
Cometh announced a partnership with Powder
They will be organizing game challenges, streams, and giveaways together for their community.
🏦 Enterprises & Institutions
Stacks App Now Officially Available on Ledger Live
The Stacks app is now available in the Ledger Apps Catalog.
Investment bank Cowen launches digital assets division
At this point, customers can trade between 16 tokens, including bitcoin, ethereum, solana, AAVE and USD Coin.
Billion-dollar gaming firm Krafton pens business deal with Solana Labs
Krafton and Solana Labs will collaborate on building games based on blockchain technology such as non-fungible tokens (NFTs), in addition to jointly marketing, designing and investing in projects.
Exxon is piloting a program that diverts excess natural gas to BTC mining
Oil giant ExxonMobil (XOM) is running a pilot project to use what would otherwise be wasted gas from its North Dakota oil wells to power bitcoin mining operations.
HSBC Enters the Metaverse Through Partnership With The Sandbox
The bank wants to engage with sports, e-sports, and gaming fans on the metaverse.
⚖️ Government & Regulation
Ukraine Buys Military Equipment with Crypto Donations
The country has already spent about $15 million in getting military supplies, as per the bitcoin code.
Britain will reveal crypto regulation plans in coming weeks
The U.K. government will soon reveal plans to regulate the cryptocurrency market, focusing on a fast-growing type of token known as stablecoins.
US Senators Working on Broad-Based Crypto Regulation
Two U.S. senators are working on a bipartisan, broad-based regulatory framework for cryptocurrency. “The work we’re doing is going to be a very complex and intensive review of the different aspects of this industry,” said one of the senators.
💰 Funding & Exits
Binance doubles down on Ultiverse with another $5 million investment
One week after leading a $4.5 million seed investment in Ultiverse, Binance’s venture arm is betting another $5 million on the metaverse gaming startup.
Worldcoin, eyeball scanning for tokens, raises $100M @$3B valuation
Worldcoin, the cryptocurrency startup co-founded by former Y Combinator president Sam Altman, is raising $100 million from investors including Andreessen Horowitz, a previous backer, and Khosla Ventures through the sale of its Worldcoin tokens.
Upshot, NFT appraisal protocol, raises $22M
Launched in 2019 as an insurance-focused prediction tool, Upshot built out its real-time NFT appraisal data by asking its users to compare collectibles with incentives for honest or expert opinions.
Red Door Digital, Taiwan based AAA web3 game studio raises $5M round
Red Door Digital's leadership team includes executives from EA Games, Ubisoft, and Tencent.
Greenidge plans to triple US bitcoin mining capacity after securing $100M in new financing
Greenidge Generation Holdings, the owner of a large crypto mining center in upstate New York, has secured $100 million to fund its growing operations in the US.
Ethereum Layer-2 DeFi Money Market zkLend Lands $5M Raise
zkLend has raised $5 million to build out its speedy, low-cost lending and borrowing protocol using the Ethereum scaling solution zk-Rollups.
🚀 Project Launches & Updates
Acala announces $250 million fund to fuel adoption of aUSD stablecoin on Polkadot
Acala, a parachain project on Polkadot, has launched a $250 million ecosystem fund to boost the adoption of its stablecoin.
Nexo Ventures launches $150M Web3 investment fund
Crypto platform Nexo has launched a $150 million in-house Web3 investment fund.
Avalanche announces $100M creator fund with Grimes
This fund will support projects on the network and exclusively available to web3 social media platform Op3n.
🔥 Other Bits We're Excited About
Crypto.com to be an official sponsor of 2022 FIFA World Cup
The exchange is adding the world’s most storied soccer tournament to its growing list of sports sponsorship deals.