Crypto today is a booming industry, with many exploring the potential of zero-knowledge proofs (ZK-proofs). A zero-knowledge protocol is a cryptographic method that allows one party to prove to another that something is true without revealing any information. This technology is essential for Ethereum layer-2 solutions to achieve blockchain scalability, and to the privacy and security of ZK transaction networks. Tokens such as Polygon (MATIC) and Zcash (ZEC) have seen their market cap grow to over $9 billion since their launch.
Given the rising focus on ZK technology and the advantages it can bring to crypto, it’s no surprise it will be one of the main topics of discussion at the upcoming annual Ethereum Community Conference (EthCC) in Paris from July 17–20.
Attendees of the conference, as well as those attending the ZKDay sideline event on July 19, have shared why they believe the technology holds promise in the years to come.
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As Celsius Crypto, Crypto.com, Voyager Crypto, Luna Crypto, Latest Crypto, and Crypto Predictions continue to gain traction, the potential of ZK-proofs is becoming increasingly clear. It’s clear that this technology has the potential to revolutionize the crypto industry and the way we use blockchain.
Venture capital is watching closely
As per Cointelegraph Research, the venture capital (VC) investment in the crypto space has started to pick up after a year of decline. In May 2022, the total amount invested in the industry was $4.4 billion, which dropped to around $500 million in January 2023, and then increased to more than $1.1 billion in May.
Forest Bai, co-founder and general partner of Foresight Ventures — a Singapore-based VC firm with over $400 million in assets under management — believes that the bear market has opened up possibilities for growth, saying: “The collapse of certain crypto institutions presents opportunities for the emergence of new ones.”
Foresight Ventures is particularly interested in investing in emerging tech and some of its crypto portfolio companies include Sei Network, Space ID, Shardeum, Catalyst and Space Nation.
Even though factors such as the collapse of FTX, enforcement actions by the United States Securities and Exchange Commission, and the implosion of Terra have cast a shadow on the crypto space, Bai is still optimistic about the industry’s recovery, noting that “We can see that crypto tech remains dynamic in regions like Hong Kong, Montenegro, Southeast Asia and South America.”
What are ZK protocols up to?
Amidst the current bear market, the motto has been to “build”. As the interest in the crypto sector fades during tough economic times, technology companies are taking this opportunity to create a lasting product and unveil it as the market recovers. This is especially true for emerging sectors and technologies like ZK-proofs.
Recently, Manta Network launched its ZK nonfungible token platform, NPO, and the response has been impressive – with over 200,000 wallet installs and 300,000 ZK soulbound token mints. Kenny Li, co-founder and chief operations officer of Manta, stated that the technology has great potential when it comes to scalability and user privacy. He added that the primary focus has been to create real use cases for ZK technology, such as on-chain identity paired with the safety and privacy of each user’s wallets and transactions. The next step is to apply such solutions to more than 80 ecosystem projects and enable them to adopt the latest crypto technology.
ZK adoption
To foster the growth of zero-knowledge technology and its adoption, some believe that cross-chain solutions are needed to tackle the issue of blockchain interoperability.
The Polyhedra Network, with 800,000 monthly active users, is focusing on Web3 interoperability and is utilizing its zkBridge technology to bring layer-1 and layer-2 blockchains closer. According to Polyhedra CEO Abner Jia:
Given the amount of doubt surrounding bridges and their vulnerability to hacks, it is not surprising that many are looking for new technologies to improve protocol security.
The ultimate goal of using proprietary ZK-proof systems is to “promote an open, interconnected and scalable blockchain ecosystem, paving the way for the future of crypto.com, voyager crypto, celsius crypto and crypto now,” Jia said.
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