Zero Knowledge Proofs Are Here

Long gone are the days of us sitting in tech talks at crypto conferences imagining all of the cool things zero knowledge proofs will be able to do in the blockchain space. The tools are here. From zk co-proccessors like Axiom, to fully blown zkVMs by RISC ZERO, Polygon’s coming Miden VM, etc. we have the tools to create the next generation of apps that will not only scale ethereum, but also increase privacy and enable an entirely new set of defi apps that are uniquely enabled by with these tools. Last time I wrote about how Axiom enables interesting use cases of Uniswap Hooks on the coming Uniswap V4 with their zk co-processor. Lately I’ve been deep diving into the new Polygon zkEVM & their coming Miden VM, two of Polygon’s new zk rollup solutions. This research has inspired me to write this piece on how these tools that will further extend of DeFi protocols with the capabilities of the coming Uniswap V4.

Bootstrapping Your DeFi Protocol On Top Of Uniswap V4

At this point, most people know what Uniswap V4 is, but just a quick overview one more time in plain terms:

Uniswap V4 is the next iteration of the Uniswap Protocol. Uniswap Liquidity Pools are now created using a singleton PoolManager instance and we have “hooks“, which are functions of code that run at different stages of actions that happen in a pool.

Before this, when people wanted to start their own DeFi protocol, we had to fork 🍴 Uniswap V3. This was not an easy feat for engineers, from the headaches of launching V3 on your own all the way to bootstrapping your own liquidity. This barrier to entry kept a lot of developers out of the innovation race that of DeFi. Uniswap V4 takes down these barriers to entry drastically for developers with the its new architecture.

If you’re able to attract liquidity to hooks and pools that you made, you can effectively create your own DeFi protocol on top of Uniswap V4. V4 has essentially positioned the Uniswap Protocol to become the fundamental layer of decentralized finance. While you still have to do the legwork to find and bootstrap your own liquidity, Uniswap V4 abstracts you alot of your work as a developer to get to a proof of concept of your own DeFi protocol on the ground. But ok, now we have V4 but the next question is, which chain(s) will I launch on?

Choosing Your Chain To Launch: The Case For Polygon’s zkEVM Rollup

On-Chain summer just ended. From Base, to Optimism, Scroll, etc. Developers have an insane amount of options for the different blockchains that they will launch their next DeFi application on. Polygon’s PoS chain has long been a widely adopted layer 2, a high throughput EVM compatible layer 2 that was a convenient option for many during the last bull run when Ethereum gas fees were ridiculously expensive. Polygon’s PoS chain was extremely cheap and we saw thousands of dApps launched on that chain, while in the background many were waiting on the launch of many of zk-rollup & optimistic solutions. Well…..ladies and gentlemen….we got em.

Last year fall(2022), Polygon now upped the ante with its zkEVM chain, a promising enhancement that is poised to be a game-changer in the blockchain arena.

How zkEVMs Work:

• Efficient Scalability:

  • zkEVMs process more transactions off-chain, reducing the on-chain load. This structure promotes faster and more cost-efficient transactions.

• Enhanced Privacy:

  • Zero-knowledge proofs allow for the validation of transactions without revealing sensitive data, bolstering transaction confidentiality.

• Reduced Costs:

  • By handling more transactions off-chain, zkEVMs significantly reduce gas fees, making transactions more economical.

• Improved Performance:

  • zkEVMs optimize the network, preventing it from becoming overwhelmed by transaction volumes, thus ensuring smoother operation and improved user experiences.

• EVM Equivalence:

  • zkEVM is designed to be compatible with the Ethereum Virtual Machine (EVM). This equivalence allows for seamless migration and integration of Ethereum-based dApps, smart contracts, and tools, thus providing developers with a familiar environment and the ability to leverage existing Ethereum ecosystems and communities for enhanced collaboration and innovation.

  • TL;DR you can launch your dApp on Polygon’s zkEVM with out all the hiccups of the EVM “compatible“ chains

Launching your next DeFi app using Uniswap V4 on top of Polygon's zkEVM isn't just an upgrade; it’s a revolutionary leap. Uniswap V4, with its myriad of innovative features, when paired with the scalability and privacy of a zkEVM, creates a supercharged environment where DeFi applications can operate at and easily scale when your defi protocol explodes in the next bullmarket.

Harnessing Polygon Miden for zkAMMs in Uniswap V4

Description from Polygon on what is Polygon Miden

Polygon Miden is a zero-knowledge rollup running on the Miden VM. Polygon Miden prioritizes ZK-friendliness over EVM compatibility; that way it can offer features and benefits that are not available on Ethereum. It aims at builders that want to create high-throughput and private dApps. Miden is a general purpose rollup and builders can write and deploy arbitrary smart contracts.

Incorporating the advanced functionalities of Polygon Miden can help revolutionize the capabilities of an AMM like Uniswap, leading to the birth of zkAMMs 🤫 and enhanced privacy measures for users.

1. Scalability through zk-Design: One of the defining features of Polygon Miden is its ZK-centric design, enabling users to locally execute smart contracts and produce ZK proofs for network verification. For Uniswap V4, this scalability is insane. The ability to process transactions locally and then use ZK proofs for verification ensures that trading can occur at unmatched speeds, making Uniswap V4 a prime candidate for high-frequency decentralized trades. This approach significantly diminishes the computational load on the network, offering traders rapid and smooth experiences.

2. Privacy-First AMMs with zkAMM: The transparency of blockchains, while beneficial for many use-cases, can be a hindrance in scenarios where transactional privacy is vital. Polygon Miden is designed with privacy at its core. Integrating Miden's technology into Uniswap V4 could lead to the inception of zkAMMs, where trades are not only efficient but also cloaked in privacy. This system would allow traders to retain the privacy of their trading strategies, amounts, and timing – a game-changer in the AMM landscape.

3. Asynchronous Interactions & Uniswap Hooks: Polygon Miden's architecture champions asynchronous interactions. All interplays between smart contracts are asynchronous, meaning token transfers, NFT swaps, and more don't have to touch the public state. This fits harmoniously with the idea of Uniswap hooks. By leveraging Miden's asynchronous model, Uniswap developers can create hooks that function seamlessly, interacting effortlessly between locally executed transactions and network transactions.

4. Safety Innovations & Uniswap: Safety is paramount in DeFi, and Polygon Miden has made significant strides in this arena. With every account in Miden being a smart contract, and the potential for recallable transactions, the chances of erroneous transfers are drastically reduced. Incorporating these safety measures into Uniswap V4 ensures a safer trading environment. Traders can operate with the confidence that their assets are secure and protected from common pitfalls and hacks that have plauged the DeFi ecosystem for the past few years.

In summary, Polygon Miden's advanced ZK-centric design/privacy first approach with Uniswap V4's upgrade on the way paves the way for a new DeFi paradigm. zkAMMs and privacy-enabled Uniswap hooks could very well be the next significant advancement in the decentralized trading world, providing users with the perfect blend of speed, security, and privacy. Even though we’re in a pretty brutal crypto winter, the tools to create the next generation of DeFi apps to further legitimize and increase crypto’s adoption are being provided to us right in front of our eyes.

So What’s Next?

Well, at this point I hope I’ve shown you the possibilities of what can be done in the coming months with the launch of Uniswap’s V4 & Polygon zkEVM/Miden. Uniswap V4 is already on the Mumbai testnet of Polygon while Polygon’s Miden is still in the works with just a simple playground for now. But if I were you anon? I’d get ahead of the curve now. So below I’ve compiled a list of everything you need to learn to get started. These resources will accommodate both the newbies and the shadowy super coders.

Uniswap Resources

https://uniswap.university/guides - For Uniswap Beginners especially

zkAMM proposal in the EF Forum

Polygon Resources + Some EVM Stuff

Ok, before you can really appreciate how cool the Polygon solutions are I’d recommend that you dive deep into the EVM(most people reading this article probably already are but I personally have to get refreshed on EVM stuff yearly)

This playlist is probably the best explainer on the fundamentals of Ethereum and how the EVM works. They’re long but worth the watch.

Honestly in terms of Polygon, you don’t need to look any further than the Polygon University. And I’m adding two talks on Polygon zkEVM/Miden too