Ethereum, valued at over $400 billion, hosts over 3,000 DApps, 260 million unique addresses, and has over 590,000 daily active users. But despite its greatness and popularity, Ethereum is inherently limited in its ability to scale massively. For example, Ethereum can only handle 20-30 TPS compared to Visa's 20,000 TPS. Additionally, during periods of high network usage, Ethereum gas fees skyrocket, making DApps extremely expensive to use.
Hundreds of Layer 2 scaling solutions have been created to solve this problem. With the recent Dencun update and the implementation of EIP-4844 (proto-dunksharding), Layer 2 transaction costs have dropped significantly, essentially “winning twice” in its mission to scale Ethereum.
Despite this achievement, two issues remain unaddressed: network (in)compatibility and liquidity fragmentation.
As a result, the current reality is a fragmented layer-2 Ethereum ecosystem that plagues users with capital-inefficient applications and services and complicates the lives of developers with unfriendly development environments.
Recognizing these challenges, zkLink developed an innovative Layer 3 zkEVM network called zkLink Nova. zkLink Nova provides unprecedented liquidity and asset aggregation across Ethereum and its Layer 2 rollups, including Optimistic and ZK Rollup. Built with ZK Stack, developers have access to an EVM-compatible open platform for deploying Solidity smart contracts.
At Layer 3, the key benefit and differentiator of zkLink Nova is its asset aggregation feature, which provides users with a simplified platform for tiered income and developers with an EVM-compliant network for easy deployment and access to Ethereum's broad liquidity.
Asset aggregation and its inner workings
Asset aggregation is a unique feature of zkLink Nova where - 1) assets in Ethereum and any of the layer 2 connected zkLink Nova are connected to Nova's layer 3 network via a canonical bridge (but remain locked within contracts on the original chains) - 2) assets aggregated across the zkLink Nova network to ensure transaction interoperability - 3) tokens of the same value but connected from different networks can be pooled into a single token to unify fragmented liquidity - and 4) transactions are secured using zk-SNARK and multi-chain state synchronization, with which zkLink coordinates state at several levels.
There are three aspects to asset aggregation: native ETH unification, ERC-20 token aggregation, and stablecoin merging. Token Merge is what brings together the ERC-20 assets of different associations, which are combined into zkLink Nova.
Built-in ETH unification allows ETH from separate networks to be connected to Nova's zkLink Layer 3 network and automatically merged into a single ETH token. Users can withdraw ETH to any connected network without the need for a third-party bridge. This promotes unified and aggregated liquidity and provides a seamless user experience across multiple chains, similar to a centralized exchange, but without the counterparty risk.
ERC-20 token aggregation is where native layer 2 assets that previously only existed on separate networks - such as Arbitrum's ARB and Mantle's MNT - can be deposited into zkLink Nova and traded interoperably with each other. This newly introduced interoperability between various native Ethereum Layer 2 tokens significantly improves capital efficiency for certain DeFi applications while opening up new use cases. Native asset aggregation also applies to income-producing assets such as LRT and LST, meaning users can find additional earning opportunities on Nova.
Stablecoin Merge allows stablecoins issued by the same project and aggregated on Nova to be merged into a single stablecoin currency on zkLink Nova. This multi-pool stablecoin aggregation feature simplifies the process of using stablecoins that exist in multiple pools and reduces gas fees.
Practical use cases for asset aggregation
In practice, the DEX on zkLink Nova can use asset aggregation to maximize the liquidity of Ethereum and stablecoins from hundreds of aggregations that can move in and out of any network, while also having access to an unlimited number of Layer 2 token trading pairs.
In addition, zkLink Nova has built Layer 3 infrastructure to improve DeFi capital efficiency through derivatives markets, structured products, and various asset management strategies. Beyond DeFi, liquidity aggregation and unification could drive broader blockchain adoption in use cases such as SocialFi, gaming and NFT marketplaces.
In conclusion, zkLink Nova's Layer 3 asset aggregation infrastructure turns the page on the days of network liquidity shortages and complex Layer 2 bridges and begins a new chapter where users can seamlessly interact with their favorite DApps without bridges and developers can have access to unlimited multi-aggregated liquidity based on Ethereum and convenient tools for developers.
