Expert opinion

Testing the Capabilities of OKX’s X1 Testnet: Q&A with Vince Yang, Co-Founder, zkLink

zkLink is a pioneering multi-chain aggregation protocol that aims to make DeFi more accessible and efficient. Under Vince's leadership, zkLink has been making significant strides in the industry, pushing the boundaries of what's possible in the realm of decentralized finance. 

zkLink recently integrated OKX’s X1 testnet to their L3 network Nexus. Nexus is a groundbreaking Layer 3 (L3) platform that functions as a multi-ZK-Rollup trading layer. It primarily focuses on aggregating liquidity across Layer 2 zkEVMs and zkVMs for decentralized applications (dApps). 

Nexus aims to solve the issue of liquidity fragmentation in the Ethereum ecosystem, a problem that has been a significant barrier to seamless and efficient trading across different blockchains.

We had an interesting chat with zkLink co-founder Vince Yang, who gave us a closer look at the capabilities of X1, and what impact it will have on Nexus’ future:

  1. Could you give us an overview of X1 and its functionalities? How does it use zk-rollups technology to enhance blockchain transactions?

    1. The X1 Testnet is a ZK Layer 2 Network built on the Polygon CDK. Rollups are a type of layer 2 scaling solution that execute transactions off-chain before bundling them into a single transaction and posting later to the base layer, making for cheaper and faster transactions 

  2. Can you draw parallels between the way zkLink functions and how another blockchain operates? Which blockchain would that be and why?

    1. zkLink is the first ZKP based multi-rollup Layer 3 linking ETH L2s together, Meaning that it is a rollup of rollups per se. Having multiple rollups together solves liquidity fragmentation while making multichain dApp deployment as easy as connecting an API.

  3. DeFi networks are known to have a fragmentation problem. Can you elaborate on this issue? How prevalent is it and what impact does it have on the overall ecosystem?

    1. In a decentralized trading environment, assets rely on price feed oracles such as Chainlink and Pyth Network as a price authority to communicate the actual price of an asset between smart contracts and blockchains. However, the siloed nature of blockchains coupled with finite liquidity causes price differentials across exchanges on various networks. 

    2. When the flow of liquidity is inefficient, small trades can have a significant impact on the market price of an asset and high slippage and arbitrage opportunities between chains can happen.

    3. As a result, users of decentralized protocols face a poor environment compared to centralized exchanges. The cost of moving assets from various chains is too expensive and overall, is a hindrance to capture new users let alone a consistently satisfactory trading environment.

  4. How is Nexus addressing the fragmentation problem in DeFi networks? What makes it a viable solution?

    1. As Nexus is a Layer 3 cross-rollup using ZK technology, this leads to interesting and exciting new system designs. Imagine an alternate scenario, where using a single wallet, you can swap any amount of currency for USD with zero slippage and transaction fees, from any country that is connected to the network. Borders and restrictions no longer exist for the asset between users. 

    2. Similarly, Layer 3 Nexus connects users and smart contracts to an aggregated liquidity pool from all ZK L2 Rollups creating a trading environment and experience that is similar to a CEX. DEX protocols are able to facilitate high volume and high value trades by leveraging the liquidity hosted of each ZK L2 Rollup. Users on the other hand can access their assets that are hosted on multiple networks and can consolidate them easily from a single wallet.

  5. Can you explain what zkSnarks are and how they are contributing to the improvement of the blockchain ecosystem?

    1. zk-SNARKs are a type of zero-knowledge proof used to establish the truth of a statement without revealing that information, and without any interaction between the prover and verifier. This type of zero-knowledge proofs can be verified within a few milliseconds, making near instant transactions and reducing the cost of a transaction on a blockchain. 

  6. With the integration of OKX's X1 into zkLink's L3 Nexus, what changes or improvements can users expect?

    1. With the new integration of OKX X1 Testnet, we can expect new users and developers to flow into each other’s ecosystem, contributing to mutual ecosystem growth. Developers building on OKX X1 Testnet can leverage liquidity from other chains on the Layer 3 Network and users on zkLink’s L3 can access dApps built on the OKX X1 Testnet 

  7. What are your future plans for zkLink? Are there any upcoming features or integrations that users should look forward to?

    1. We have some very exciting news coming for zkLink in the future. In the short term, we are releasing the Nexus ALpha Mainnet Playground, where users can bridge their assets and interact with our ecosystem dApps to enjoy the Layer 3 environment with our L2 partners from zkSync, Linea, Scroll and Polygon ZKEVM. We’ve also made a recent integration with OKX wallet as well where users can now access the Layer 3 with the OKX wallet. 

    2. In the distance, we will soon be integrating our modular Data Availability solutions and Decentralized Sequencers to cater for dapp-specific customizations. This will eventually lead up to our Layer 3 zkEVM mainnet, where we want to give developers an easy way to port their solidity dApps onto our ecosystem in a matter of minutes. 

  8. How do you envision the role of zkLink, and zk-rollups in general, in the evolution of the DeFi ecosystem?

    1. The market is seeing an increased demand for DeFil platforms and exchanges that are secure, reliable, and do not compromise on liquidity. A Layer 3 trading execution layer on top of existing L2 zk-Rollups not only simplifies user experience across the various Ethereum Layer 2 networks but also provides aggregated liquidity and aggregated assets through a secure layer3.

    2. The result would eliminate the need for multiple wallets and complex asset management. We expect that this will bring in a surge of new users that want democratized access to DeFi and improve the overall DeFi trading landscape. 

  9. As a co-founder, what has been your biggest challenge in developing zkLink and how have you overcome it?

    1. One of the biggest challenges to zkLink is navigating a bear market period where uncertainty of the industry is at its highest. When we discovered ZK Proofs, it was at a very early period in the space. However after studying the history of the ZKPs, early projects and eventually committing our own tests, we took a leap of faith towards dedicating resources to building zkLink. We were faced with multiple tech challenges towards building the product and had to anticipate the landscape in the worst conditions. However, we eventually got over the challenges by getting the right people on board with us and we are now on track towards completing an original ZKP powered multi-rollup Layer 3 execution solution. 

  10. Lastly, for those who are new to blockchain technology and DeFi, how would you explain the value and potential of zkSNARKs in layman's terms?

    1. The benefit of this type of zero-knowledge proof is that it can be verified within a few milliseconds, making near instant transactions while reducing the cost of a transaction on a blockchain.