Scroll: Powering DeFi with ZK Proofs

TLDR;

• Scroll protocol uses ZK proofs helping them to disclose only the necessary information while keeping the rest private;
• Scroll isn’t just a protocol, but the whole ecosystem gathering including DEX, Bridge, Swap, Lending, and Name Service;
• Scroll is into the crypto points system. They’ve launched a loyalty program called “Scroll Sessions.”

What Is Scroll?

Source: https://scroll.io/ 

Scroll is a scaling solution for Ethereum, using innovations in scaling design and zero-knowledge proofs to build a new layer on Ethereum. Thus, the Scroll network is more accessible and can support more users at once than Ethereum. 

Scroll pulls together research and engineering from Blockchain Protocols and Zero Knowledge Cryptography. 

QN: What is ZK? Zero-knowledge proofs (ZKPs) are a cryptographic method used to prove knowledge about data, without showing away the data itself.

What is a ZK Proof?

A zero-knowledge proof is a convenient way of proving that one piece of information is true. It’s necessary for building relations in the DeFi space. So when one party (the prover) needs to transfer something to another party (the verifier), they can be thanks to this technology. What is even more important, this happens without revealing any information apart from the fact that this specific statement is true. 

Source: Medium

To illustrate the situation when ZK is helpful and useful, let’s assume that Ada wants to sell some secret information to George. George needs to verify that Alice truly has this secret piece of information but if Ada shows it to him, it won’t be a secret and valuable anymore.

A ZK proof is a way to guarantee that Ada does, indeed, have the exclusive data but without revealing the actual data. 

Scroll Ecosystem

Since Scroll’s Mainnet launch in October 2023, the protocol has been working on the ecosystem consisting of all types of applications, from DeFi to social and everything in between.

Providing secure, efficient, and cost-effective development for Ethereum-based applications, DeFi, and other blockchain applications, Scroll is expanding its ecosystem projects, the protocol has already built 100+ projects, distributed across various types such as DEX, DeFi, NFT, GameFi, and domains. 

Scroll Bridge

Source: https://scroll.io/bridge

The official cross-chain operation is straightforward. You need to enter the amount to be crossed and click “Deposit Funds” to initiate the entire asset cross-chain process. 

Currently, the official cross-chain bridge only supports cross-chain from the Ethereum mainnet to the Scroll network. The current gas fee for each transaction is relatively high (around 30-40 Gwei). To save on transaction costs, users can choose to temporarily use third-party bridging services for cross-chain operations.

Zada Finance

Source: https://www.zadafinance.com/swap

Zada Finance is a cross-rollup DEX based on Scroll. Zada Finance brings users lower costs, maximized security, and faster transactions, supporting account abstract wallets, order aggregation, and more flexible interest rate options. 

Papyrus Swap

Source: https://papyrusswap.com/ 

It’s a native DEX platform on Scroll, Papyrus is an automated liquidity protocol. Anyone can exchange pool tokens by depositing an equivalent amount of each underlying token, becoming a liquidity provider (LP) for the pool.

Cog Finance

Source: https://www.cog.finance/

Cog Finance is a lending platform built on Scroll, supporting users to lend their assets and choose the collateral they want to accept, earning profits by lending assets with continuously changing interest rates.

Scroll Name Service

Source: https://scroll.name/

It is a decentralized naming service developed and built on the Scroll. Scroll NS provides an online identity solution for Web3 space. It comes with a one-time payment of ownership fees, fair launch and distribution, and next-generation domain utility.

Scroll: Key Features

1. Improved Ethereum scalability: Scroll aims to solve Ethereum's scalability issues by using zk-rollups, allowing it to process more transactions in less time and at a lower cost.

2. Zk-proofs technology: This technology allows Scroll to provide highly secure and confidential transactions while maintaining transparency and decentralization.

3. Lower costs: Scroll's main goal is to reduce gas costs for transactions on the Ethereum network. It makes the use of the blockchain more affordable.

4. Improved transaction speed: Zk-rollups help Scroll to increase the speed of transaction processing on Ethereum.

5. Compatibility: Easier integration with existing decentralized applications (DApps) on Ethereum.

Scroll Sessions

Scroll Sessions is the protocol’s loyalty program to reward the community with Scroll Marks for being actively involved in the Scroll ecosystem. 

Users can get Scroll Marks by depositing assets to Scroll. To get exposure to Session Zero, you need to bridge ETH or wstETH via the native bridge or STONE using LayerZero to Scroll. 

You can swap your assets on the Notum app in a one-click manner.

Source: Notum app

Marks will be accrued by holding these assets on Scroll. You don't need to do any additional transactions or activities for Session Zero. Scroll Marks will also be issued to Scroll community members who have been with the protocol from the very beginning. 

Final Thoughts

Scroll protocol is a quickly developing project that uses innovative zk-Rollup. The platform allows to building and develop various projects saving costs and time.  

zk-Rollups technology is a key to the Ethereum scaling issue. Scroll’s advantages of EVM equivalence and comprehensive decentralization, its own value might also experience significant growth.

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Disclaimer: Notum does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Cryptocurrency is subject to market risk. Please do your own research and trade with caution.