zkSync Era’s locked value on Ethereum Layer 2 network exceeds $500M.

Matter Labs’ zkSync Era, a scaling solution for Ethereum that utilizes zero-knowledge (ZK) rollup technology, is continuing to attract investment at a fast pace.

According to data from L2Beat, the total value locked (TVL) on zkSync Era surpassed $500 million early on Monday, representing a 12% increase over the past week. TVL is a commonly used metric for tracking the total value of digital assets locked or staked on a decentralized finance platform.

ZkSync Era is the third-largest rollup by total value locked, behind Arbitrum and Optimism. It retains Ethereum Virtual Machine (EVM) compatibility while ensuring native account abstraction.

As of press time, more than 220,000 ether (ETH), worth around $378.3 million, 121 million USDC (a dollar-pegged stablecoin), and 14.43 million MUTE, worth $7.53 million, were locked on zkSync. MUTE is the native cryptocurrency of a zkRollup-based decentralized exchange called Mute.

The number of daily active addresses on zkSync has been steadily increasing since May and has averaged 175,000 over the past four weeks. zkSync was launched in March 2023.

Recently, the liquid staking solution Rocketpool went live on zkSync Era, joining a growing number of decentralized applications moving to layer 2 platforms. According to Galaxy Digital, this increased user demand for rollups is likely driven by Ethereum core developers’ focus on implementing the Ethereum Improvement Proposal (EIP) 4844, which will introduce a new transaction type to Ethereum and reduce transaction fees on rollups.

Alex Thorn, head of research at Galaxy Digital, said in a newsletter dated June 2, “The prioritization of EIP 4844 as the next major code change in Ethereum’s forthcoming Cancun/Deneb upgrade slated to activate sometime this Fall or Winter next year affirms the importance of rollups for the long-term scalability of Ethereum and the need for dapps built on Ethereum to eventually migrate the majority of their operations to a more cost-effective rollup.”

Note that activity on other ZK rollups like Starknet and Polygon zkEVM also remains brisk. Some observers are predicting a Zk season ahead – a crypto market slang for a period where ZK rollups outperform other market sectors by a significant margin.

This article was edited by Parikshit Mishra.