back30 Aug 20237 min read
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zkSync Era: A Burgeoning DeFi Ecosystem

zkSync Era launched in March 2023, after years of work from Matter Labs and the ZK community. This launch marked an important milestone for the DeFi ecosystem. Fast forward to August: zkSync has now established itself as the leading zk-based Layer 2 solution.

Let’s take a closer look. zkSync Era is a leading chain in user activity, with over 400,000 wallets. It’s also proven itself as a new home for high throughput DeFi. In just five months, zkSync Era grew to $200M in total locked value, establishing itself as a top 20 chain in size and activity.

Many factors contribute to the success of a chain. One critical and often overlooked element is infrastructure—the pillars of a blockchain’s security, scalability, and usability.

Mysten Labs and the zkSync Era contributors focused on infrastructural tooling for developers so that the ecosystem can deliver an Ethereum-like experience. The launch of Pyth Price Feeds on zkSync Era’s mainnet launch was a natural addition to developer tooling and a transformative one too. In those same five months, Pyth Network grew to secure over 90% of zkSync Era’s TVS. What led to this growth?

In this blog, we will explore the zkSync Era ecosystem and how Pyth Network transformed its DeFi capabilities.

The zkSync Ecosystem—Powered by Pyth

Pyth Network is the largest first-party financial oracle network. Pyth delivers over 300 real-time price feeds across cryptocurrencies, FX rates, ETFs, equities, and commodities to more than 30 blockchains, including zkSync Era.

One of Pyth’s unique features is the way it sources data. Pyth Network’s prices are sourced from over 85 first-party data providers, including some of the world's most prominent exchanges and market-making enterprises. Readers will recognize names such as Cboe Global, Jane Street, Binance, and Wintermute.

Low-latency and high-frequency updates are another compelling feature for zkSync developers. Pyth Price Feeds update multiple times per second, which is faster than most blocktimes. Furthermore, Pyth aggregates price inputs from the data providers through an on-chain, transparent aggregation methodology to guard against incorrect and malicious inputs. The result is an aggregate price output that is robust and secure. In fact, the Pyth oracles track the markets with 5-10x more accuracy than competing solutions.

You can compare Pyth Price Feeds to centralized exchanges on the public Stats page.

We were met with demand for Pyth Price Feeds from the zkSync Era ecosystem from day one. The daily price updates chart from the Pyth Network website offers an excellent visualization of historical Pyth Price Feed activity. Daily price updates from the zkSync Era ecosystem have grown to a median of 3K updates per day, with regular peaks at 6K. The Pyth Network has served a total of over 160K price updates to date.

You can track Pyth’s cross-chain price updates and deliveries on our public Stats page.

It is important to remember that each delivered price update is requested and paid for by a user or ecosystem participant. Pyth price updates require a native gas fee transaction and a Pyth update fee to the network.

The demand speaks for itself. Let's take a deeper dive into who’s #PoweredByPyth on zkSync Era. Some of these protocols have been integrated with Pyth Price Feeds on the day of mainnet launch.

zkSync Era Ecosystem

ReactorFusion is a lending and borrowing market protocol on Compound Finance and offers unique bribe-reward tokenomics. Live since April 2023, ReactorFusion established itself as a leading zkSync money market by collecting close to $10M in value locked in its first month. Pyth powers the lending module to help value user collateral and positions and trigger liquidations when necessary.

EraLend was the first-ever borrow/lending platform to go live on zkSync. Previously known as ‘Nexon Finance’, the newly branded EraLend seeks to maximize capital efficiency and minimize external risks like dependency on external liquidity. EraLend uses Pyth Price Feeds to evaluate user collateral and positions in real time.

zkDX is a decentralized derivatives trading platform that enables users to take on leveraged positions for digital assets. zkDX is designed as an oracle-based exchange, and trades do not experience price impact or slippage, even with up to 50x leverage. With the help of Pyth, zkDX has facilitated $12M in trading volume and welcomed over 5,000 traders.

xBank is a decentralized non-custodial liquidity market protocol that facilitates borrowing and lending. xBank started in June and deposits and borrows have been steadily increasing, matching with the launch of their esXB token which represents an IOU that can later be converted to the xBank’s Governance token. xBank has been #PoweredByPyth since day one to value protocol-supported assets and evaluate user positions.

Pinnako is a decentralized perpetual trading platform that launched in early July on zkSync. In its first month, Pinnako derivatives processed close to $25M in trading volume. This activity came from over 4,500 users and generated close to $35K in fees for liquidity providers. Pinnako is an oracle-based exchange where trades are filled at the Pyth price and without slippage.

zkEra Finance is a decentralized spot and perpetual trading platform offering minimal swap charges and trades with zero price impact. zkEra Finance core functionality is inspired by GMX and uses Pyth Price Feeds to process trades. zkEra has to date generated $1.5M in trading volume from their derivatives market.

Deri Protocol is a decentralized protocol for users to exchange risk exposures while maintaining capital efficiency. After launching and integrating with the Pyth Price Feeds on Arbitrum, BNB, and Polygon, Deri has now expanded to the zkSync ecosystem with the same oracle playbook.

Basilisk is a lending and borrowing DeFi protocol based on the battle-tested Compound code base. Basilisk has integrated with Pyth Price Feeds to become one of the earliest money markets on zkSync and grew quickly to over $250K in TVL.

ZeroLend is the newest money market on the block. Derived from Aave, ZeroLend provides an inclusive and permissionless lending solution optimized for capital efficiently. ZeroLend launched its own decentralized, overcollateralized stablecoin: ONEZ.

Gambit is an upcoming leveraged trading platform focused on enabling users to trade a wide range of assets at competitive fees thanks to Pyth’s extensive asset coverage and unique confidence intervals feature.

Galleon is a gamified logarithmic perpetual futures trading platform comprising an open-source protocol and a decentralized derivatives exchange to interface with the protocol. Galleon uses Pyth Price Feeds to enable users to trade with up to 20x leverage for USDC quoted markets.

SynFutures is a permissionless Web3 infrastructure for derivatives trading on various chains. SynFutures is built on a synthetic Automated Market Maker (sAMM). With the sAMM, the buyer or seller trades directly with the pool at the Pyth oracle price. SynFutures v2 launched more than a year ago and generated $1.7B in trading volume, before expanding to the zkSync ecosystem.


Get Started with Pyth on zkSync Era

The Pyth Network introduces an innovative low-latency pull oracle design, where users are empowered to request or "pull" price updates on demand. This feature enables everyone in that blockchain environment to access that data point. Builders on zkSync can permissionlessly integrate with any of Pyth's 300+ price feeds.

You can explore our integration tutorial series on the Pyth Youtube channel.

If you have any questions or requests, you can ask in the the Pyth Discord! More resources are available at the end of this blog.


zkSync Era

zkSync Era is a ZK rollup, a trustless protocol that uses cryptographic validity proofs to provide scalable and low-cost transactions on Ethereum. In zkSync, computation is performed off-chain and most data is stored off-chain as well. Since all transactions are proven on the Ethereum mainchain, users enjoy the same security level as in Ethereum.

zkSync Era is made to look and feel like Ethereum, but with lower fees. Just like on Ethereum, smart contracts are written in Solidity/Vyper and can be called using the same clients as the other EVM-compatible chains.

In the past four months, zkSync Era’s testnet has seen approximately 9 million transactions, 30,000 contracts deployed, 497,000 active addresses and over 650,000 blocks produced.

For more information, please visit their website.

Pyth Network

The Pyth Network is the largest first-party oracle for the world’s financial data. It supports more than 300 real-time price feeds across major asset classes including digital assets, equities, ETFs, FX, and commodities.

The network comprises some of the world's largest exchanges, market makers, and financial services providers contributing their proprietary price data on-chain for aggregation and distribution to smart contract applications. Thanks to the Pyth Network’s innovative pull oracle design, applications can effortlessly "pull" the latest price onto their native blockchain on demand.

In less than a year since the launch of its cross-chain pull oracle, the network has secured over $1B in total value. The Pyth Network has been used by DeFi protocols in over $65B in trading volume and in over 180 on- and off-chain applications. You can learn more about Pyth from their website and documentation.


What’s Next?

We look forward to building the future of finance together on zkSync Era! Check out the resources below to get started. If you have any questions, please reach out.

You can find the Pyth Network price feeds catalog on the website and discover which price feeds are launching next. If you have any questions or feedback, you can ask in the Pyth Discord.

Resources


We can’t wait to hear what you think! You can join the Pyth Discord and Telegram, follow us on Twitter, and be the first to hear about what’s new in the Pyth ecosystem through our newsletter. You can also learn more about Pyth here.

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