Several BAYC and CryptoPunks collectors who put up their tokens as collateral backing for Ethereum loans have been unable to settle their dues. Crypto analysts believe this could mark the onset of the first major liquidation crisis in the NFT industry. BendDAO Loans and Possible Risks Rumors of a liquidation spiral began earlier this week following a post about NFT lending platform BendDAO. BendDAO is a web3 protocol that allows users to take out loans in Ethereum using their non-fungible…
Polygon – a top platform for Ethereum scaling and infrastructure – has announced the launch of Polygon zkEVM. The program will allow Ethereum to scale to global use such that transactions can be settled instantly and nearly for free. .
The Holy Grail of Scaling
In an interview with CoinDesk, Polygon co-founder Mihailo Bjelic described zkEVM as the “holy grail” and “missing component” concerning Ethereum’s mass adoption. It combines three critical features: Ethereum compatibility, security, and scalability.
The first feature is important given Ethereum’s dominance within the crypto developer ecosystem. As a report from Andreesen Horowitz illustrated in May, Ethereum has nearly 4000 monthly active developers, dwarfing Solana’s 1000 and Bitcoin’s 500.
“The whole developer experience… all the toolings, programming languages – everything works out of the box,” said Bjelic.
zkEVM refers to a virtual machine that can execute smart contracts while being compatible with zero-knowledge proofs. The latter is a type of cryptographic proof that verifies a statement’s truth while not conveying additional information about the prover. Besides scaling assistance, zero-knowledge proofs assist with transaction privacy by design.
On security, Bjelic argues that Ethereum is the most secure and decentralized programmable blockchain in the world. Building layered applications on top of Ethereum’s blockchain helps to leverage that security.
Most importantly, zkEVM will assist with scaling – something that is “notoriously hard” to do with blockchains.
“The major challenge in the industry is scaling,” said the co-founder. “We need to scale today, ideally.”
Scaling has arguably plagued the Ethereum blockchain more than any other in recent years, with average fees dwarfing other chains. In fact, data from Blockchair shows that 1.3 million Ethereum transactions failed in May alone – despite being paid for.in gas.
Lightning Network: Bitcoin’s Scaling Savior
Ethereum’s not the only network with scaling power: Bitcoin’s lightning network also allows for instant and near-free Bitcoin payments. The layer-2 solution uses off-chain transaction processing through payment channels to improve both Bitcoin’s scalability and privacy.
FTX CEO Sam Bankman Fried came under pressure from Jack Dorsey in May for not mentioning the lightning network when discussing Bitcoin scaling with the Financial Times. Dorsey has developed a lightning sdk kit his company Spiral, and even had it integrated into CashApp.
Similarly, Twitter integrated the lightning network into its “tip jar” feature in September, letting users rout Bitcoin to one another.