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Layer 3 (L3) solutions on the Ethereum ecosystem have sought to address issues of liquidity fragmentation and low composability. Both of these issues are an indirect result of the rapid growth of Ethereum Layer-2 (L2) rollups.
A recent Messari report highlights the impact of zkLink Nova, a zero-knowledge L3 infrastructure provider that strives to bring together assets, decentralized applications, and users dispersed across L2s into a unified network.
According to Messari, zkLink Nova's status as a general-purpose L3 addresses the liquidity and asset fragmentation challenges facing Ethereum's L2 ecosystem.
“As the Ethereum ecosystem becomes more and more complex with the gradual launch of new L2s, solutions like zkLink and its L3 are crucial to streamlining the user and developer experience on the L1,” says Messari.
Messari says the proliferation of “alt-L1s” or alternative layer 1 platforms (such as Arbitrum and Optimism) have led to the fragmentation of the space. In such a space of competition and attention, the need for capital-efficient multi-chain applications is amplified.
Origins and development of zkLink Nova
Launched in March 2024 on , zkLink Nova has gained popularity in the L3 space, attracting over $300 million in total value locked and processing over 1.2 million transactions. To date, the platform is already integrated with nine chains, demonstrating its potential to become a leading solution for developers and users who need a transparent and interoperable environment.
In 2021, zkLink Nova was designed as a multi-chain trading solution capable of leveraging zero-knowledge proofs. The zkLinks Labs team was led by Vince Yang, guiding the project to its current state as a complete L3 platform. zkLink then secured $18.5 million in funding from private investors after two rounds and a community sale, with the support of 21 investors including Coinbase, Orthogonal Thinker, NGC, Republic and Ascensive Assets.
At the heart of the zkLink Nova technology stack is a combination of advanced cryptographic techniques and innovative design choices. The platform consists of four key layers: sequencing, execution, settlement and data availability.
The sequencing layer manages on-chain deposits, maintains L3 state, and organizes transactions for processing and proof generation. The execution layer uses zkEVM from ZK Stack to execute transactions securely in an EVM-enabled environment. zkLink Nexus, the settlement framework, enables efficient settlement between L2 and Ethereum through multi-chain state synchronization.
Finally, the data availability layer stores transaction and state transition data, with plans to integrate external solutions such as Celestia and EigenDA for enhanced security and decentralization.
Combating liquidity and asset fragmentation
As a general-purpose L3 network, zkLink Nova addresses the liquidity and asset fragmentation challenges facing Ethereum's L2 ecosystem. By consolidating assets, liquidity and dApps from different L2s into a single, secure and efficient EVM-enabled platform, zkLink Nova enables dApps to access larger liquidity pools and attract more users.
Such an approach helps maintain value within the Ethereum ecosystem, preventing dApps from having to migrate to other L1s in search of better economic opportunities and performance. The L3 solution provides developers with a unified environment to deploy their dApps, leveraging the combined liquidity of connected L2s without the need for multiple deployments.
One of the most notable features of zkLink Nova is its ability to pool assets from multiple L2s and merge tokens of identical value into a single token. Using zk-SNARK and zkLink Nexus, the platform securely consolidates assets across connected networks, simplifying user experience, reducing gas fees and improving capital efficiency.
Key Benefits of zkLink Aggregated L3
According to the zkLink platform overview published by Messari, zkLink's aggregated L3 stack has at least some key advantages.
Primarily, zkLink Nova enables liquidity aggregation within the Ethereum ecosystem, ensuring that assets dispersed across various Layer 2 solutions can be natively integrated and interact with each other seamlessly. This means that through its secure clusters running from zkLink Nexus and ZK Stack, zkLink Nova maintains the same degree of security provided by Ethereum, considering how all transactions are finalized on the Ethereum mainnet, inheriting its features.
By design, the zkLink Nova L3 solution provides a additional scaling layer compared to 2 layers, resulting in extremely low gas costs for users. The modular data availability (DA) design further reduces the data share of transaction costs. Another key factor is the platform’s “multi-layered” yield structure. In this structure, zkLink Nova supports all native yield assets on a single platform, improving their liquidity and composability. This allows holders to generate additional yield on top of the yield they already earn from staking Ethereum and layer 2 rollups.
According to information from Messari, more than $300 million has been connected to zkLink Nova, positioning it as the largest L3 network in terms of total value bridged.
Messari's report reflects zkLink Nova's central thesis: by retaining Ethereum's value and addressing the fragmentation caused by the proliferation of L2 solutions, the platform strengthens Ethereum's network effect and consolidates its position as a leading blockchain ecosystem.
This L3 debate has been brewing for some time now, with various controversies at play. Solutions such as zkLink Nova will likely play an increasingly critical role in promoting interoperability, efficiency and ease of use for more users by meeting head-on the challenges posed by L2 fragmentation.
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