Ethereum scaling protocols drive zero-knowledge proof use: Finance Redefined

Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you the most significant developments from the past week.

This week, Finance Redefined looks at the growing popularity of zero-knowledge proof-based scalable solutions. Zero-knowledge rollups (ZK-rollups) technology has gained a lot of traction over the past year thanks to its increased use in the Ethereum ecosystem.

Bug bounties are seen as a great reward system for white hat hackers to weed out bugs in the DeFi ecosystem, which often fall prey to exploits. However, recent analysis suggests these programs have mixed results.

After a series of exploits on the Multichain protocol over the past couple of weeks, the founder of Connext proposed a “Sovereign Bridged Token” standard to prevent future issues and exploits.

Algorand’s decentralized lending protocol is set to wind down by year-end as developers claimed building a borrowing and lending protocol is “no longer a viable path” for the protocol.

The top 100 DeFi tokens had another mixed week in terms of price action, followed by a late surge on July 13, aided by the partial verdict for Ripple in its fight against the United States Securities and Exchange Commission (SEC), leading to an 84% surge in the XRP (XRP) price.

Ethereum scaling protocols drive zero-knowledge proof use in 2023

Ethereum scaling protocols dominate the use of ZK-rollups, with major launches, new research and healthy competition among the key highlights in a sector report published by ZKValidator.

The node infrastructure operator’s “State of ZK Q2” report reflects on significant events across the ZK ecosystem, with notable launches of ZK-powered layer 2’s highlighting the use of the technology for scaling in comparison with other market segments.

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