Layer-2 money market ZkLend raises $5 million in seed round

Ethereum Layer-2 scaling solutions are seeing much and much protocols gathering connected them arsenic the exertion becomes progressively mature. A period agone Yearn Finance launched its archetypal layer-2 powered work connected optimistic rollup protocol Arbitrum, and 3 weeks agone StarkWare themselves raised $100 cardinal astatine a $6 cardinal valuation.

The latest protocol to leap connected the layer-2 bandwagon is zkLend, a wealth marketplace protocol built connected StarkWare’s nationalist zk-rollup scaling protocol StarkNet.

Jane Ma, Co-Founder of zkLend said:

“Building our next-generation wealth marketplace protocol connected StarkNet means that we inherit Ethereum’s information and decentralization portion leveraging zk-Rollup’s monolithic scalability potential. For the archetypal time, it means that permissionless and unafraid fiscal services that enactment idiosyncratic sovereignty archetypal are wrong reach. Given the passionate StarkNet community, we are definite that this volition beryllium the aboriginal L2.”

Scale astatine a origin of 1-200

According to the property release, zkLend volition beryllium capable to standard astatine a origin of 1-200 of Ethereum’s (ETH) accustomed cost, portion inheriting Ethereum’s precocious level of security.

“Additionally, our imaginativeness is to invited the adjacent epoch of finance: organization DeFi. ZkLend has 2 products to cater to some DeFi users and whitelisted organization users, serving arsenic the cardinal wealth lego successful the emerging zk-Rollup ecosystem of dapps and users,” commented Brian Fu, Co-Founder of zkLend.

The $5 cardinal raised volition spell towards the motorboat of the Artemis and Apollo products, successful summation to squad enlargement crossed tech, marketing, and concern development.  

Artemis is simply a permissionless lending offering scheduled to beryllium successful Q3 2022. Artemis will, according to zkLend, alteration DeFi users to get against their assets “in a cheap, businesslike and harmless way.” Institutional and firm users needing a KYC and AML-compliant solution volition beryllium capable to usage the 2nd merchandise Apollo, a permissioned solution expected to motorboat aboriginal adjacent year. 

Double-sided borrowing and collateralization factors

The protocol volition follow an innovative ouroboros exemplary to incentivize users to enactment successful the targeted wealth marketplace pools. An ouroboros is an past awesome depicting a serpent oregon dragon eating its ain tail. Other highlighted features enabled by zkLend see double-sided borrowing and collateralization factors, protocol-to-protocol lending, and adaptable liquidation fees.

The autochthonal protocol token, ZEND, is simply a linchpin of the protocol. Users staking ZEND volition beryllium capable to enactment successful governance, booster complaint rewards, and claims to the involvement income earned by the pools.

Tom Shaughnessy, Partner, and Co-Founder of Delphi Ventures said:

“Money markets are a halfway constituent of the DeFi fiscal stack with beardown existing product-market fit. Couple a wealth marketplace with the method prowess of StarkNet’s decentralized zk-rollup which is unrecorded and proven and you person zkLend. The zkLend squad is smart, polished and driven to execute and present connected this dual-approach solution servicing some DeFi users and institutions. Delphi is arrogant to beryllium an capitalist and to assistance physique zkLend.”

Other large investors successful this effect circular see Genesis Block Ventures, Alameda Research, CMS, MetaCartel DAO, DCVC, Amber Group, TPS Capital, Ascensive, D3Web Capital, 4RC, and SkyVision Capital.

Difference betwixt zk- and optimistic rollups

Zk-rollups trust connected zero-knowledge (zk) proofs for each authorities transitions to relation correctly. Afterward, each transaction is compared to the astute declaration connected the mainchain.

Zero-knowledge proofs support each authorities transitions, which ensures that nary invalid transactions oregon malicious contracts tin beryllium executed due to the fact that everything indispensable beryllium validated against the astute declaration earlier it tin beryllium implemented.

Zk-rollups person the vantage of being importantly faster than optimistic roll-ups since it is considerably lighter connected layer-2 due to the fact that the validation occurs connected the Ethereum mainchain alternatively than connected the sidechain. Because mainchain validation occurs astir instantly, zk-rollups are faster and much scalable than previously.

The large downside of zk-rollups is that they are not yet Ethereum Virtual Machine (EVM) compatible, and frankincense cannot tally astute contracts developed for the Ethereum mainchain without large modifications. Optimistic roll-ups, however, tin tally mainchain astute contracts beauteous overmuch arsenic they are.