A new chain bubble: zkSync Era ∎ mess

Original article by Leo, Jaleel, BlockBeats

Who would have thought that in just a few days, 921 new ETH projects that were highly regarded by the community were locked up due to miswritten contracts, 300 ETH projects were directly RUG, SyncSwap Chinese number, which ranked first in DEFI TVL in the ecosystem, was abandoned due to airdrop remarks. Second place Velocore has launched a new ID0 and has been accused of running away.

These short term events are occurring in the highly anticipated zkSync Era chain, which has been regarded as a very promising chain and will be released next year.    

A screenshot circulating on social media today lists some of the zkSync Era's current projects as outrageous and frustrating, which is a good illustration of its awkward state of affairs: ecological projects are in a mess, the regular army is not on the scene, and the local dogs are on the scene. Let's start the story with the ecological antics of DEX SyncSwap.

SyncSwap Chinese number abandoned storm

The source of SyncSwap's community discussion was several posts in the Chinese section of SyncSwap's social media. In a recent post, SyncSwap apologized in Chinese: "Airdrops are 15%, airdrops are airdrops, and airdrop incentives are airdrops," adding that the social media account had been deactivated by SyncSwap.

As we know, SyncSwap is a decentralized trading platform built by Matter Labs on zkSync Era testnet. The protocol is intended to be a liquidity solution at the level of zkSync Era network transactions, and the protocol is fully open source and composable. The Dex has the features of no license and fully open for public use. Anyone can token swap at will to become a liquidity provider on SyncSwap and earn profits.

Back to a few days ago, we found that SyncSwap Chinese said that there is no difference between air drop and transaction incentives, that is, transaction incentives for interactive groups, user interaction generally does not cost a lot, but if transaction incentives are introduced, The final probability will become everyone's mouth, "the wool is not anti - masturbation." After this comment was published, many users resisted and hurled abuse. Later, SyncSwap Chinese section clarified again: "15% share of airdrop, trading incentive and airdrop is separate, I guess the trade incentive will be FUD by the Chinese community, although I initially suggested increasing the airdrop share, but it did not succeed."

After a complete set of operations, it can be felt that SyncSwap Chinese area is very proud of itself due to the zkSync Era TVL, which takes a large share of the project. The attitude of total indifference to users also makes people less favorable to the project. Previously, SyncSwap was a good project for both interaction and experience. It can connect zkSync Era Mainnet, zkSync Era Tesenet, Scroll Alpha, Polygon zkEVM Testnet, For Meitou users, high TVL, which can be connected to multiple networks, is an opportunity to achieve a "quality project" with more than one fish to eat.

What about SyncSwap's Loyalty token program? According to official documents, the loyalty program is designed to incentivize users to trade and generate high returns. Traders will be rewarded with ySYNC tokens (which cannot be transferred). The more expensive the transaction costs, the more ySYNC they will receive, one ySYNC for every $1 of Gas consumed. The total amount of ySYNC in the first phase is 90w, but the price of ySYNC will drop as more people participate, and ySYNC can be swapped into veSYNC. In the past, there are many projects to do trading incentives, but the final effect is not ideal.

SyncSwap's move is "incomprehensible," as most people are using SyncSwap for zks airdrops, and further, the project is designed to increase the volume and number of transactions on the zkSync Era, not because SyncSwap is doing well.

Let's follow the SyncSwap story with a look at other big and small projects in ecology.

The regular army is not on, the soil dog first hot field

On April 7, the 921 ETH ID0 funds raised by Gemholic got stuck in the smart contract due to the zkSync Era's incompatible transfer function. zkSync Era officials said they would help recover the funds and later issued a statement saying they had found a solution to unfreeze the contract. Gemholic said that after the thaw, the community would vote on whether to return to eth or continue with the project.

Velocore, billed as "the first ve token of the zkSync era," claimed before its launch to solve the inherent problem of spillover sales by combining incentives with pledges. As a result, the community was once hot, and pre-orders were sold out in just a few minutes, exceeding expectations by 1800%, accumulating about ETH 8,600, and TVL exploded.

However, as the program's airdrop rules were distributed, many community members found out that Velocore needed a linear unlock to receive the airdrop, and felt that this was not a decent move. When the airdrop was released, there were signs of backtracking, and the price of $VC plummeted. And at this time the team members did not make crisis treatment, but opened a new Twitter account, ready to launch the new ID0, community members mentality collapsed again, scold the project party this is already "Sima Zhao's heart everyone knows", this plate is not ready to open a disk circle people.

Multiple projects have run away

In contrast to Gemholic and Velocore, corehunter, Syncdex and ZksYncHero were more direct in confirming their escape by deleting their Twitter accounts.

First corehunter raised 300E, then shut down the website and ran away.

Then a few days later, some people questioned Syncdex's smart contract not allowing money to be withdrawn from the pledge, and some people discovered that the project's official tweets appeared to be derived from the betgosu handle. The community questioned this in the dc, but the officials kept quiet. They even kick out members who mention betgosu.

As the scam was gradually revealed, the team could no longer explain the lie, first shutting down replies and finally deleting the account. SlowMist also issued a safety alert: "The SyncDex project has undergone a leek cutting exit resulting in a loss of more than $370,000." SyncDex confirmed the chives at 3:00 a.m. UTC+8, and the official Twitter account has since been deleted.

After the investigation of MistTrack team, it is found that these funds have been converted into ethereum and transferred to Binance smart chain, then converted into BNB again, and finally transferred to MEXC trading platform, which is also the source of the initial funds of the project.

ZkHero and SyncDex operate almost exactly the same way, first without much ado, directly open the coins, attract community members to connect to ZkSyncHero with a wallet, then click on the token, the wallet will be stolen and emptied. To keep such voices from being heard, ZkHero first disabled comments and then deleted the account.

With community members saying ZkHero is 50% TGE presold and 5% to the team, anyone who has seen the token distribution should be able to tell it's a scam. According to the information on the chain, the ZkHero team will finally "black" to the Token remitted to several different addresses, suspected of sharing stolen goods, a person 10E.

The ecological situation is in a mess

近期的空投导致大家对撸毛的期待值越来越高，而 FOMO 情绪也带动了 zkSync Era 和其他 L2 的频繁交互，致使 zkSync Era 在短期 TVL、钱包数量、跨桥资金等数据纷纷暴涨，此类数据暴涨并不是因为 zkSync Era 做得有多好、其生态项目做得多好，只是 ARB 带来了撸毛情绪还未消散。

But for users, the premise of interactivity is to judge whether a project/chain/market is good or not. To say the least, the criteria can even be lowered to "whether the project is developing fast", "whether the project side is actually doing something". Previously announced Arbitrum, although not very good quality, but at least the chain has some good projects, such as GMX - Arbitrum leader DEX.

For the community, it has been even harder to identify the serious projects that have landed in the zkSync Era amid the $ARB airdrop fever. Others have accused zkSync Era of helping to promote the scam, and that Eco should take some responsibility for "vetting" and "KYC".

If we knew they were scams, we wouldn't advertise them. Everything is fine when we advertise them. The best thing we can do is immediately inform the community of what we notice." At the same time, zkSync Era hopes the community will point out the scam sooner rather than wait until it actually happens to complain and start pointing fingers. In fact, most of the time these programs appear to be legitimate and legitimate until someone falls for the scam, which makes it difficult to identify the fraudster.

The project should be about bringing the user community into Crypto through its hard power, not about "cutting the chive" after a speculative moment brings the user into Crypto. Due to the low cost of zkSync Era roadruns, so many roadruns and knock-on effects have occurred recently, and the community has developed a great crisis of confidence in all projects of zkSync Era Ecology, and has become more cautious and critical of team members.

At the same time, some semi-real projects also complain: "So many running projects have raised more money than our serious projects."

The team was very shocked and considered giving up all the money back. Finally, due to the retention of some community members, they chose to let the community users vote to decide whether to give up the project and give up all the money back.

Some people in the Zkrocket community have expressed that the lack of enthusiasm is due to the project side being too hasty and overconfident in order to take over the race track. The whitelist round encountered some problems, which led to the cancellation of most of the original whitelist, resulting in the unsatisfactory fundraising situation of IDO in the whitelist round. But the project side is also more relevant, did not choose to make up for the rest of the quota.

There are some pro-ZkRocket voices, but others say it could be a new scam. But whether BlockBeats is a new scam is unclear.

Other DeFi apps on zkSync Era

These incidents have also led to some thinking about the zkSync Era Eco-Project. Are some of the top DeFi apps on zkSync Era scams, in addition to leading DEX SyncSwap?

Let's put these zkSync Era DEX apps in perspective with the data. According to DefiLlama data, the current TVL ranking after SyncSwap on zkSync Era are Velocore, Mute.io, SpaceFi.

TVL about $61.76 million, according to DefiLlama. In the interface, simple and easy to operate, can hit 8 points; The Swap function supports nine tokens. The Gas consumption is 1.94 GHZ (0.003ETH is used as an example. swap is performed almost at the same time).

Looking at the Pool, it can be found that the composition of liquidity pool is relatively rich, such as USDC/ETH, BUSD/USDC, ETH/OT, etc. It should be noted that there is only one DEX that supports OT in the market, which is one of the reasons for SyncSwap's high TVL. On social media, SyncSwap has 270,000 followers, but the airdrop incident has caused a drop in popularity.

In addition to SyncSwap, Velocore is the second highest DEX in the zkSync Era, and it is also the price drop we mentioned earlier due to the linear unlock rule of airdrop. The team is ready to start other IC0 projects with a new number.

Velocore is a Solidly forked DEX based on Velodrome code designed to reward users for providing mobility, enhancing the infrastructure of the zkSync Era. $17.7 million from TVL; Interface not concise, 6; Swap supports only seven tokens and two tokens for Gas. In Pool depth, due to ve mechanism, the liquidity pool is lower than SyncSwap. Social media has 11,000 followers, which is not bad considering it was launched in March.

Mute.io is a DeFi platform that builds liquidity for all zkSync Era eco-agreements, and its Dapp is Mute Switch, an AMM DEX w/limit order book, mining and bond platform. Mute is a solution to the zkSync Era protocol that appropriately incentivizes its own use case mobility. TVL about $13.31 million; The interface is simple and easy to operate, up to 8 points; Swap: supports 11 tokens and 1.8 Gas tokens. Pool APY ranges from 14%-71%, and of course some high APY results come from unknown tokens and WETH. Social media was created in March 2018 and has about 62,000 followers.

SpaceFi is a cross-chain DeFi platform based on the Evmos and zkSync Era. SpaceFi's initial product aims to connect the Cosmos and Layer2 ecosystems, Users can earn DeFi rewards through liquidity, trading mining, or casting STAR tokens into NFT for higher yields, governance rights, etc. TVL about $7.64 million; Simple interface and easy to operate, 8 points; The Swap function supports four tokens and the Gas value is 1.52 tokens. Social media: Founded in April 2021, about 145,000 followers.

BSC, Arbitrum and Aptos

Not just zkSync Era, but back to 2020, when Binance Smart Chain (BSC) had been online for two months, many new decentralized finance (DeFi) projects were joining BSC, while anonymous DeFi projects were also running away.

After an automated market maker (AMM) "mine" project called "Wine Swap" suddenly deleted social media information and transferred assets on the chain, resulting in a total "loss" of about $345,000, Binance security team helped users recover about 99.9% of the lost funds.

In addition to Wine Swap, you also remember Meerkat Finance from BSC. In 2021, BSC DeFi project Meerkat Finance claimed on social media that the vault contract had been hacked and nearly $14 million of user funds had been stolen. After the incident, the project's official website was inaccessible and social media was closed.

After the attack address analysis of the security team, the event is the premeditated phishing event of the project party, from the beginning is to run away; And in this case, the culprit of the code layer is the "scalable agent contract", resulting in the project side has too much authority, stealing funds is very easy.

Let's go back to September 2021, then Arbitrum has been online for two weeks, and surprisingly, the first shot Arbitrum online is not what root positive Miaosong head DeFi protocol, but the soil dog wild mine. At that time, some hot tokens deployed on the Arbitrum network have disappeared.

The same is true of Aptos, where the most famous RUG project of 2022 will be Mojito. Let's also briefly review the beginning and end of Mojito.

Mojito Market is a decentralized spinach DEX (betting) on Aptos. Users can place bets according to daily online guessing items (such as sports events, political decisions, social guessing, etc.). There are usually two options, and the interface will display relevant data and odds after users place bets through funds. The project was strongly supported by Aptos at the early stage. Before Aptos issued coins, Mojito Market was one of the main channels for users to interact with Aptos. At the beginning, the project was to receive bets through test coins and obtain points every day. The top 10 consecutive days of total points will receive the project's native token MOJO. After FTX crashed last year, the project tweeted that Mojito had lost its project funding hosted on FTX due to the collapse of FTX and Alameda, and would suspend its development agreement. When the funding improved, it planned to redeploy MOJO on Ethereum to implement its multi-link plan, and would release updates in the future.

Mojito Market was launched at the early stage of Aptos, and gained attention and users with Aptos airdrop. Later, Mojito DEX was launched to increase the liquidity of MOJO. However, due to the fluctuating price of APT, the price of MOJO never met users' expectations. The project promised to continue to increase liquidity, but most of the users have already sold their MOJO holdings. For the users, the project has no positive progress and vision.

As of today, the project's social media has not updated any information, and the project was stopped on January 14, 2023. As I recall, Mojito posted that the loss of funding was just a cover, and everyone knows that when Alemeda and FTX crashed, There are a lot of Rug projects that claim to have funds held in trust with Alemeda, and FTX is just an excuse for Rug projects. There were no endorsements from big institutions, no well-known investors, and the project did not disclose much information. It only relied on the public chain to obtain users. Finally, the development was suspended due to the bad progress of the project.

The 'project Factory' behind the New Chain

The emergence of a new field is always a mixed story, and the boom has created opportunities for malicious actors, including new chains, with some practitioners taking advantage of illegal practices such as running away, fraud and other violations to make unsuspecting victims suffer.

SyncSwap and Mojito, the previous Aptos Rug project, are also part of the same team. The Mojito Market project was also the main project of Aptos last year, and then Mojito Markets official said that due to FTX crash, The project has lost its project funding in custody with FTX and will suspend development of the agreement.

As we can see, looking back at the early days of BSC, Aptos and Arbitrum, there is no exception but the same scene, which seems to be closely related to some "project factories" behind the new chain.

They especially like to appear in the early stage of the new chain. After harvesting a batch of users flooded by the new chain effect, they close their accounts and websites, take away the liquidity of the community, leave the site and divide the accounts, and continue to wait for the next public chain ecology. So it goes round and round, changing the name of the project, changing a few lines of code, but with the same "familiar" team behind it.

They are usually the first batch of popular projects when the red public chain online, anonymous mystery, no well-known investors platform, no endorsement, no big company audit, but no lack of KOL hot, all rely on the community pure fomo, but also the various marketing means to play the sound and color.

Indeed, on the one hand, these local dogs can create and bring hot spots, creating a hot atmosphere for the initial ecological phase, attracting initial start-up assets and user traffic. On the other hand, the local dog project has taken away not only money but also the confidence of some in the community. It should be known that in the early stage of ecological online interaction and pledge are some smart money, and the negative feedback caused by these people is a loss and damage to the reputation of ecology itself.

The zkSync Era needs more time

Back to the zkSync Era ecology and take a look at the data on dune. When Arbitrum first went online in September, ETH had a pledge value of 370,000, while zkSync Era currently has a maximum pledge of 3,894.

The current situation of zkSync Era is that there are many ecological applications, but few mainstream and high-quality ones. Only the over 400 million USD financing behind ZkSync Era cannot support its future development, but it still needs some high-quality application support. At present, there are indeed many projects waiting for launch. Maybe we can look forward to the next step when Uniswap goes live with zkSync.

In comparison, SyncSwap ranks top in comprehensive strength within the ecosystem at present. However, in terms of the whole ecosystem, apart from other functions, the Swap and liquidity pool of zkSync Era are only considered. The perfection of several top TVL Dexes in zkSync Era is not enough. Still far from those top DeFi protocols (Lido, MakerDao).

SyncSwap has a long way to go compared to Arbitrum GMX, and most of the current transaction data is from the interactive zkSync Era airdrop address, of course, air drop interactive data is also the source of most DeFi protocol data, but for SyncSwap, At present, a dominant company began to change some rules at will, which also shows the casual attitude of the project towards users. SyncSwap's loyalty program reflects how the program is beginning to swell.

Let's take a look at what Ethereum, the most legitimate player in the public chain, is doing, which may provide some useful answers for zkSync Era and other new public chains that follow.

Hackthon has been in full swing since the early days of IC0, and the Ethereum Foundation has been supporting some legitimate projects.

As of May 2020, more than 150 Ethereum projects have received nearly $25 million in funding within the Ethereum ecosystem. The Ethereum Foundation is the largest donor, having given away more than $21 million and awarded 94 grants. Everyone knows that runaways are not supported or supported by Ethereum, which is one of the reasons why everyone knows that there are runaways on Ethereum, but still believes in the legitimacy of Ethereum.

New companies, including zkSync Era, also need to think more about how to keep their ecosystem from drowning in scams and offshored projects, support serious, serious and well-connected projects in the early stages of testing and launching, and host hackathon competitions for anonymous local dogs with bad intentions, Show your attitude in the early stage when you can't control the influx of local dog projects and insulate yourself from the local dog project stance.

Of course, as we all know, zkSync Era is one of the most anticipated and promising public chains of the ZK circuit, and it will take a lot of time for zkSync Era to really prosper.

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