If you are an investor, you would probably invest in a zk Layer2 project in the Ethereum ecosystem a few years ago.

Because zk (zero-knowledge proof) is known as the jewel of the encryption industry, and Layer2, as one of the few application scenarios of zk, is also regarded as an important encryption infrastructure.

Looking at the glorious financing record of that year, if you didn’t raise US$30 million in a single round, you would have no face in this circle.

This year, many zk projects have launched their tokens on the mainnet, and many ugly daughters-in-law have finally met their parents-in-law.

From the performance of Layer 2 of each Ethereum, we can get a rough idea of ​​how each project is doing.

Market value management is flat

First of all, the FDV (full circulation market value) of all projects is falling, but only the investors of the zk project are bleeding.

Arbi and OP both have market capitalizations of around $6 billion, but their post-investment valuations were only a few billion:

Arbi's private placement valuation is US$1.2 billion; OP issued its token in May 2022, and its valuation before issuance was US$1.65 billion.

Investors have made several times the profit so far, and the multiple would be even higher if they had cashed out earlier.

Let’s take a look at our zk project:

Stark's private equity valuation is as high as 8 billion. Now the market valuation has been cut in half, and it is about to be cut at the ankle.

zksync claims to have raised $458 million, but its current market value is only $400 million, most of which has not been unlocked, and its FDV is only $2.4 billion.

Moreover, the token trend has been declining all the way, and there is no sign of any support for the market.

Operational flat

After entering the second half of the year, the operations of major Layer2s have basically come to a standstill, and the corresponding data is a decline in active users on the chain.

Except for the Base chain which is still growing relying on the Coinbase ecosystem, other chains experienced a cliff-like decline in August.

The number of users of zk chains represented by Stark/Zksync is increasing rapidly, with the data in August being halved compared to that in July.

The number of monthly active users of the Base chain reached 12 million, almost twice that of the Ethereum main chain and three times that of the second-ranked Arb chain.

Maybe Ethereum really doesn’t need so many Layer2s, and all users go to Base. Unfortunately, the Base chain does not issue coins, so you can only buy coinbase stocks~

Development of lying flat

Judging from the number of code comments, among the projects in the zk ecosystem, only zkSync is still struggling. This may be because domestic development is cheaper.

Stark only had 33 comments in the whole month of August. No wonder the ecological project is running away and construction has basically stopped.

What’s even more outrageous is Scroll, which has only 1 comment, and not many in other months. This project is a star project invested by Sequoia, but it hasn’t issued any coins yet. Does it mean that it doesn’t need to be developed anymore?

Aleo miner disheveled in the wind?

With so many zk projects going so cold, what can another zk star project, Aleo, do?

Aleo once raised more than 200 million US dollars in a single round of fundraising, and it was recently reported that it was finally launched on the mainnet.

Maybe many miners have been hoarding Aleo mining machines for a year?

It was originally planned to be launched on the mainnet at the beginning of the year, but it has been delayed until now.

Seeing that investors in other zk projects have lost a lot of money, miners who invest in aleo should be mentally prepared early~

Is Vitalik panicking?

Vitalik used to support zk frequently, and recently he also stated that he would no longer invest in L2~

With the collapse of L2 project performance, the price of Ethereum is now in jeopardy.

Vitalik called for Ethereum 18 times in August, which is more than he called for in the whole year of 2023.

At this time last year, the Ethereum ecosystem had reserved a large number of star projects in the two major tracks of re-staking and zk second layer, preparing for a big harvest this year.

Now I have to admit that I am no longer excited about technology, and I am more optimistic about its application...