The zkEVM Sweet Spot

Vitalik’s recent post on classifying zkEVMs prompted discussions over specific implementations but did not dive into the best implementation. Although this is a question full of nuance from a technical standpoint, the best implementation regarding market success is more straightforward. Of course, every implementation will eventually find a market fit, but at the moment, there is a niche that hasn’t been filled and will likely succeed in the short-to-medium term.

source: Vitalik Buterin
source: Vitalik Buterin

This is the sweet spot in zkEVM development: a zkEVM as Ethereum compatible as possible while reaching the market as fast as possible. This is likely a Type 2 or 2.5 zkEVM according to Vitalik’s classification. Currently, only two zkEVM teams are building towards this goal: Scroll and Polygon, but zkSync is likely to end up at this type of system at a later date.

Why is Ethereum compatibility important? As it currently stands, most active users are on EVM-compatible blockchains.

TRON’s data was excluded, as it was an outlier of over 1.7M addresses. Data from block explorers.
TRON’s data was excluded, as it was an outlier of over 1.7M addresses. Data from block explorers.

By leveraging existing developer tooling, EVM dApps, and infrastructure, zkEVMs can avoid the cold-start problem. A zkEVM with a familiar development environment will allow an ecosystem to develop much faster. Blockchains without EVM compatibility have less adoption. A healthy, mature ecosystem follows the path outlined below.

A common way to solve this cold start problem is by incentivizing developers by injecting capital into the system, but it is not long-term sustainable. The end goal of this strategy is to kickstart the flywheel and let network effects carry it after the initial capital injection. This has worked better for EVM-compatible blockchains, as it also leverages the nearly-decade-old tooling and developer network effects that already exist.

While both strategies are viable, having EVM support is much cheaper and becomes self-sustaining much faster. 

Therefore it is likely for zkEVMs with close-to-Ethereum compatibility to end up with a majority of the ZK Rollup market share, independent of technical superiority or capital thrown at it, at least in the medium-term.

Thanks for reading this article! This is the summation of a lot of research. Follow me on Twitter to get notified about future posts, and let me know what you think. My content will remain 100% free forever and is licensed under CC BY-SA unless otherwise specified.

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