Scroll into Ethereum, Unlocking ZK Possibilities

Table of Contents

1. Introduction: The Evolution of Layer 2 — The Era of ZK

2. Scroll Sets a New Standard for ZK Layer 2
2-1. The trusted leader in ZK rollups
2-2. zkEVM: Achieving high compatibility with Ethereum 
2-3. Infrastructure for seamless developer and user onboarding
2-4. Optimizing transaction processing with a multi-tiered architecture
2-5. Fee design and protocol upgrades for cost efficiency

3. Rapid Ecosystem Growth Positions Scroll in DeFi’s Top 10 for TVL
3-1. DeFi-driven expansion powering scroll’s ecosystem growth
3-2. Driving global expansion with Scroll’s new use cases and outreach initiatives
3-3. $SCR Tokenomics: Fostering a Community-Driven and Sustainable Ecosystem

4. Final Remarks: Scroll’s Mission to Become Ethereum’s #1 Rollup Solution

 

1. Introduction: The Evolution of Layer 2 — The Era of ZK

Ethereum, as a Layer 1 blockchain, boasts the second-largest ecosystem after Bitcoin, driven by the innovation of smart contracts, which enable decentralized applications (dApps) to operate on the network. However, Ethereum has encountered persistent scalability issues, struggling with the "blockchain trilemma"—the challenge of achieving security, decentralization, and scalability at the same time. Its slow transaction speeds often falter under heavy user traffic, and gas fees surge, burdening users with excessive costs. To mitigate these issues, Ethereum proposed "sharding," a method of splitting Layer 1 into segments to process transactions more efficiently. While promising, sharding requires fundamental changes to the blockchain, is time-consuming to implement, and offers only limited scalability improvements. Consequently, Layer 2 solutions, which operate independently from Ethereum (Layer 1), have gained significant attention. Layer 2 solutions operate by processing transactions off-chain and recording only the resulting data on-chain. This significantly improves transaction throughput and offers the advantage of lower gas fees. In the early stages, methods like Plasma and State Channels attracted attention, but Rollup technology has recently emerged as the most prominent solution.

A rollup is a technology where numerous transactions are processed or executed on Layer 2, bundled into batches (rolled up), and then stored on Layer 1. The rollup posts compressed transaction results and the corresponding verification data to Layer 1, allowing off-chain transactions to be validated while significantly improving scalability. Rollups are categorized by their verification methods into Optimistic Rollups, which use Fraud Proofs, and Zero-Knowledge (ZK) Rollups, which utilize Validity Proofs. Optimistic Rollups assume all transactions are correct by default, but when an issue arises, validation is conducted through an appeal process. This leads to a drawback of longer Finality times. (For further details, refer to Xangle Research article, "Ethereum Layer 2 Solution").

ZK Rollups, the technology utilized by Scroll, process numerous transactions off-chain and create succinct proofs using zero-knowledge computations to verify their validity. These proofs, along with the batched transactions, are then stored on Layer 1. The significant advantage of ZK Rollups lies in their mathematical validation of transactions, ensuring that incorrect transactions cannot be processed. This allows real-time verification and finalization of transactions, eliminating the delayed finality found in Optimistic Rollups. Moreover, ZK Rollups maintain high security while offering enhanced privacy, as transaction details are not exposed on the network. The combination of rapid transaction processing, reduced gas fees, and Ethereum Layer 1’s security makes ZK Rollups particularly advantageous for large-scale decentralized networks. This technology is expected to drive the widespread adoption of Ethereum's ecosystem, becoming a key Layer 2 solution in the future.

Despite their high security and efficiency, ZK Rollups come with notable limitations. The most significant challenge is the difficulty of developing general-purpose dApps. Most ZK Rollup solutions are tailored to specific applications, requiring developers to use programming languages designed for ZK technology rather than Ethereum's standard Solidity language. For example, StarkNet uses a new language called Cairo instead of Solidity. Although Cairo is optimized for zero-knowledge proofs, it has limited compatibility with the existing Ethereum ecosystem, forcing developers to learn a new language. ZK Rollups also face interoperability issues. It is difficult for applications across different ZK Rollups to communicate or exchange data, which hinders the seamless integration of decentralized finance (DeFi) applications and limits the overall expansion of the dApp ecosystem. Consequently, ZK Rollups are not yet developer-friendly and remain functionally restrictive.

The zkEVM (Zero-Knowledge Ethereum Virtual Machine) was developed to address these limitations. zkEVM applies ZK-SNARK technology to optimize both transaction efficiency and security while maintaining compatibility with Ethereum’s existing EVM environment. Several types of zkEVMs have been proposed, ranging from Type 1 to Type 4, each offering a different balance between EVM compatibility and performance optimization. Type 1 provides full compatibility with Ethereum, while Type 4 sacrifices some compatibility to achieve maximum performance gains. Among the various zkEVM solutions, Scroll stands out for its focus on developing a Type 2 zkEVM, which ensures high compatibility with Ethereum while reducing proof generation times. Its collaboration with the Ethereum Foundation, along with recognition from Ethereum co-founder Vitalik Buterin and substantial investments from major venture capital firms, has brought Scroll significant attention in the market.

2. Scroll Sets a New Standard for ZK Layer 2

2-1. The trusted leader in ZK rollups

Scroll, founded in 2021, is a Layer 2 Ethereum solution that successfully launched its mainnet in October 2023. It aims to address Ethereum's scalability issues through Zero-Knowledge (ZK) rollups. Powered by its Zero-Knowledge Ethereum Virtual Machine (zkEVM), Scroll offers nearly full compatibility with Ethereum in terms of usability and development, boasting high throughput and low fees. This makes it a convenient platform for both users and developers. Aligned with Ethereum's core principles of decentralization, open access, and censorship resistance, Scroll is contributing to the expansion of the Ethereum ecosystem.

Since its early days, Scroll has gained significant attention due to the outstanding technical expertise of its founders. Co-founders Ye Zhang and Haichen Shen have played pivotal roles in Scroll’s research on Zero-Knowledge Proofs and the optimization and implementation of zkEVM, drawing from their extensive experience at New York University, the University of Washington, and global tech giants. Another leader, Sandy Peng, leverages her deep understanding of traditional finance and regulatory frameworks, gained from her time at the Hong Kong Securities and Futures Commission, to oversee Scroll’s business and operations. This combination of technical prowess and leadership has enabled Scroll to attract $80 million in funding from leading investors like Polychain Capital, Sequoia Capital, and Bain Capital Crypto, resulting in a company valuation of $1.8 billion.

Since the successful launch of its mainnet, Scroll's Total Value Locked (TVL) in decentralized finance (DeFi) has grown rapidly, placing it among the top 10 protocols in a short period. This swift rise seems to be driven by the high expectations surrounding the project, which had garnered a significant valuation pre-launch. Another contributing factor is the ease with which developers have been able to migrate their EVM applications to Scroll, thanks to the project's focus on optimizing the developer experience. In terms of security, Scroll has worked with OpenZeppelin for external audits, operates an internal security team, and collaborates with external experts through Immunefi’s $1 million bug bounty program to continuously enhance its security measures. By steadily preparing all the necessary elements for a robust mainnet, Scroll is cementing its position as a technically trustworthy ZK rollup, poised to provide a secure and stable environment for both developers and users.

2-2. zkEVM: Achieving high compatibility with Ethereum

The computations occurring within the zkEVM can be broadly divided into two primary processes: EVM execution and proof generation. The EVM (Ethereum Virtual Machine) is a virtual machine responsible for executing smart contracts and managing state changes. During transaction processing, it interprets bytecode, resulting in changes to the state. For instance, invoking a smart contract may alter specific data or transfer tokens, leading to state changes. The EVM tracks these state changes and performs logical and field operations to verify that each transaction is processed correctly. However, since the original EVM was not designed with zero-knowledge (ZK) considerations in mind, these operations become highly inefficient within ZK circuits. Commands involving large data structures or complex state changes incur significant costs during proof generation, consuming substantial resources.

The ZK proof generation process works by taking the results of EVM executions and performing mathematical operations to generate a cryptographic proof for each transaction. The purpose of these proofs is to verify that the transactions and their associated state changes have been processed correctly. Inputs to the ZK circuit include transaction data, state changes, and contract invocations, while the output is a validation certificate that guarantees the integrity of the process. This proof assures that state changes recorded on the blockchain are accurate and secure, building trust in the system. However, generating these proofs involves numerous logical operations, which historically made ZK proof generation a slow and resource-intensive process.

To address the inefficiencies in executing EVM and generating proofs within a ZK environment, Scroll's zkEVM incorporates various optimization techniques to enhance the efficiency of both the EVM architecture and the proof generation process.

(1) Poseidon Hash Function and zkTrie: Improving EVM efficiency

Ethereum utilizes the Keccak hash function and Merkle Patricia Trie for data storage and validation. However, Keccak requires complex operations within ZK circuits, making proof generation time-consuming and costly. This inefficiency arises because Keccak was not originally designed for ZK proof generation. Specifically, ZK circuits need to create proofs through numerous logical and field operations, and Keccak's complexity can hinder effective processing in these environments.

To address this issue, Scroll has introduced the Poseidon hash function. Poseidon is a custom-designed hash function that requires fewer operations within ZK circuits compared to Keccak, allowing for quicker proof generation. Essentially, Poseidon is optimized for ZK proofs, enhancing transaction processing speed by optimizing circuit operations. In simpler terms, while both functions hash input data into a digest, Poseidon is specifically engineered to function more efficiently in ZK contexts.

Additionally, Scroll employs a new tree structure known as zkTrie to manage data more efficiently. Unlike Ethereum’s Merkle Patricia Trie, zkTrie utilizes a Sparse Binary Tree to fix the tree's depth and reduce unnecessary nodes, optimizing data validation and storage. This approach enables faster speeds and lower costs even during large-scale data validation. In short, by reducing the size and complexity of the tree during data storage, zkTrie allows for more efficient validation and storage, facilitating quicker and cheaper ZK proof generation.

(2) Polynomial Commitment Scheme and Recursion: Reducing computational complexity and costs

One of the main challenges in ZK proof generation is the high costs and time associated with handling complex computations and large datasets. Scroll’s Polynomial Commitment scheme addresses this issue by compressing large datasets into a single polynomial for processing. For example, instead of needing to validate hundreds of pieces of data individually, all this data can be represented as a single polynomial, which is then verified for correctness. This method speeds up the verification process and reduces data size, leading to overall cost savings. Scroll, in particular, employs polynomial commitment schemes such as the KZG commitment scheme, which compresses very large datasets into a single, small value that can be easily verified for accuracy. This allows complex computations to be processed much more simply and quickly, and plays a key role in reducing the complexity of ZK proof circuits.

Moreover, Recursion technology allows multiple ZK proofs to be combined into a single proof. Rather than validating each proof separately, this technique merges all proofs into one, significantly shortening the verification process and greatly enhancing processing speed. For instance, instead of needing to generate proofs for numerous transactions individually, combining them into a single proof accelerates verification while substantially lowering costs.

(3) Hardware Acceleration: Addressing computational performance challenges

ZK proofs require intensive and complex computations, which can lead to performance bottlenecks when relying solely on software processing. This is especially problematic when handling large transaction volumes, where the risk of processing delays increases significantly. Scroll addresses these computational challenges through hardware acceleration, incorporating GPU and ASIC-based technologies to boost proof generation speeds by 5 to 10 times. This optimization significantly enhances the processing efficiency of zkEVM, ensuring fast and reliable performance even during high transaction loads.

(4) Custom constraints and separate proofs: Tackling inefficiencies in complex instruction and state management

The EVM's CALL instruction, which handles interactions between smart contracts, is particularly computation-heavy in ZK environments due to the need to process multiple parameters and manage state changes. These complex instructions are major contributors to higher proof costs and delayed processing times. To mitigate this, Scroll has implemented custom constraints for each instruction, optimizing the computational process for even the most complex operations. Additionally, Scroll separates state proofs from EVM proofs. State proofs verify read and write operations, while EVM proofs ensure that the computations within smart contracts are executed correctly. This separation reduces computational overhead and improves the efficiency of the overall proof generation process, leading to a significant boost in zkEVM’s performance.

The EVM's CALL instruction, which handles interactions between smart contracts, is particularly computation-heavy in ZK environments due to the need to process multiple parameters and manage state changes. These complex instructions are major contributors to higher proof costs and delayed processing times. To mitigate this, Scroll has implemented custom constraints for each instruction, optimizing the computational process for even the most complex operations. Additionally, Scroll separates state proofs from EVM proofs. State proofs verify read and write operations, while EVM proofs ensure that the computations within smart contracts are executed correctly. This separation reduces computational overhead and improves the efficiency of the overall proof generation process, leading to a significant boost in zkEVM’s performance.

Scroll’s zkEVM stands out in terms of both performance and developer experience. As a Type 2 zkEVM, Scroll offers greater Ethereum compatibility compared to Type 3 or Type 4 solutions, while preserving familiar development languages and processes. This means that Ethereum developers can easily transition to Scroll without needing to learn new tools or workflows. By leveraging ZK technology, Scroll offers fast, low-cost transaction processing while addressing Ethereum’s scalability challenges. Developers can continue using Solidity and Vyper to build dApps on Scroll, maintaining a seamless experience. On the performance side, Scroll demonstrates outstanding scalability compared to Ethereum. Key innovations like the Polynomial Commitment scheme and the Poseidon hash function significantly improve transaction speed and efficiency. In an interview with Xangle, a decentralized exchange (DEX) team building their service on Scroll noted how seamless the transition was from another EVM-based Layer 2 to Scroll, with minimal challenges in redeveloping their DEX. This highlights Scroll's strong compatibility and developer-oriented approach.

2-3. Infrastructure for seamless developer and user onboarding

Many existing ZK rollup solutions impose significant burdens on developers, requiring them to learn new protocols and environments, which degrade the developer experience (DX) and hinder large-scale dApp adoption, especially in enterprise settings. Ethereum developers often face the inconvenience of having to rewrite or optimize smart contracts due to the lack of full EVM compatibility or the requirement to use unfamiliar tools and languages, such as alternatives to Solidity or Vyper. This increases both the cost and the risks of technology adoption for organizations.

Scroll addresses these issues by offering a zkEVM that allows developers to build and deploy dApps in the same way they would on Ethereum, without the need for additional learning. For instance, developers can use familiar tools like Hardhat or Foundry to deploy smart contracts by simply switching chains. Additionally, the Scroll Bridge makes asset transfers between Ethereum L1 and Scroll L2 seamless, while Scroll Messenger enables smooth cross-chain smart contract interactions, simplifying cross-chain transactions. Node operations are based on Ethereum’s go-ethereum (l2geth), allowing for easier data synchronization and transaction management in an environment familiar to Ethereum node operators.

The Scroll SDK is designed to facilitate the effective use of Scroll's zkEVM, providing developers with an environment that simplifies the integration of ZK technology and related customizations. It maximizes performance and security while maintaining the familiar experience of the Ethereum ecosystem. Several companies have already integrated Scroll, and the combination of the SDK with other third-party solutions accelerates onboarding across industries. The key benefits of the Scroll SDK for enterprises include:

• Full EVM Compatibility: Developers can continue using familiar languages like Solidity and Vyper, allowing for a seamless transition to Scroll without the need for additional training. This minimizes learning costs and facilitates the migration of existing projects, while also maximizing development efficiency for new ones.
• Fast Transaction Finality: Scroll delivers transaction finality in under an hour, significantly faster than traditional Layer 2 solutions, which can take days. This ensures a responsive and real-time processing experience for both developers and users.
• Multi-Proof of Authentication Support: Scroll supports multiple proof-of-authentication systems that can operate in parallel, efficiently processing a large number of transactions simultaneously. This ensures reliable operation even for complex applications, allowing large-scale projects to efficiently handle significant data loads without sacrificing performance.
• Flexible Prover Environments: The Scroll SDK allows enterprises to choose between self-hosted provers or using the Prover Marketplace, offering flexibility in configuring verification environments. This customization enables businesses to select the most secure or cost-effective solutions for their specific needs.
• Optimized Multi-Layer Architecture: Scroll’s multi-tier architecture enhances scalability and transaction processing speed, utilizing data compression to pack more transactions into a single block. This architecture minimizes processing costs and ensures stable network performance even during periods of high demand.

From a user’s perspective, Scroll’s Ethereum-like environment provides several key advantages. One of the most significant benefit is its seamless onboarding process, as users can continue using familiar tools such as MetaMask without requiring additional installations or training. Scroll’s strong compatibility with Ethereum ensures that integrated dApps remain fully functional without any modifications. Moreover, Scroll Bridges make liquidity transfers to and from the Ethereum mainnet effortless, streamlining asset movement. With zkEVM technology, Scroll also delivers lower gas fees and faster transaction finality, offering users a more economical and efficient experience while maintaining the familiarity of the Ethereum ecosystem.

2-4. Optimizing transaction processing with a multi-tiered architecture

Scroll leverages a multi-layered architecture to maximize scalability and efficiency in transaction processing. Transactions are bundled into blocks, grouped into chunks, and ultimately submitted to Ethereum in batches. This structure enhances transaction speed, improves data compression, and reduces gas costs.

Scroll's architecture consists of three key layers: the Settlement Layer, the Sequencing Layer, and the Proving Layer. Each layer plays a crucial role in verifying, sequencing, and generating proofs for transactions, ensuring efficient and secure transaction processing.

(1) Settlement Layer: Bridge Contract and Rollup Contract

The Settlement Layer ensures the final verification and confirmation of transactions through Ethereum's Layer 1. Scroll deployed Bridge and Rollup contracts on Ethereum to facilitate the transfer of assets and messages between Ethereum and Scroll. The Bridge Contract handles asset transfers from Ethereum (L1) to Scroll (L2), while the Rollup Contract finalizes transactions after they are processed. For example, when a user sends ETH or ERC20 tokens to Scroll via the Gateway Router smart contract, Ethereum’s mainnet receives and verifies the assets before safely transferring them to L2. This enables Scroll to maintain Ethereum’s security and reliability.

(2) Sequencing Layer: Execution Node and Rollup Node

The Sequencing Layer is responsible for processing transactions on L2, creating blocks, and submitting them to Ethereum’s mainnet. It consists of two components: the Execution Node and the Rollup Node. The two nodes work together to process and validate transactions. The Execution Node executes transactions submitted to the Scroll sequencer. The Rollup Node first groups processed transactions into chunks, then organizes these chunks into batches for submission to Ethereum. Once the batch is created, it sends the necessary data to prove the validity of the transactions and ultimately awaits validation. This structure optimizes transaction processing speed while minimizing potential issues until the transaction is finalized. Additionally, the batching of multiple transactions into blocks, which are then grouped into chunks/batches for submission to L1, helps reduce transaction processing costs.

(3) Proving Layer: Coordinator and Provers

The Proving Layer is responsible for validating transactions by generating the necessary proofs. This layer comprises a Coordinator and multiple Provers. The Coordinator allocates proving tasks to the Provers, who, upon completing their assignments, generate a validity certificate. Once this certificate is submitted to the Rollup Contract via the Rollup Node, the transaction is finalized. The Proving Layer efficiently manages the validation process, ensuring transaction finalization while maximizing the security and performance of zkEVM.

The process of transaction handling in Scroll can be broadly divided into three stages of the transaction lifecycle, each of which optimizes the status and data of transactions based on the multi-layered architecture:

1. Confirmed: When a transaction is submitted from either Ethereum(L1) or Scroll(L2), the Execution Node executes it and includes the transaction in an Scroll L2 block. At this stage, the transaction enters the first phase known as Confirmed. This means that the transaction has been submitted to the Ethereuem L1 bridge or Scroll L2 sequencer, executed, and included in the Scroll L2 block, thereby achieving a confirmed status.
2. Committed: The L2 block containing the transaction is grouped into a batch and committed to Ethereum's L1. Once the batch is completed on L1, all transactions included in that batch are considered committed. During this process, Scroll efficiently bundles transaction data into batches for submission to Ethereum L1, reducing gas costs and enhancing transaction processing speed.
3. Finalized: After a batch is committed to Ethereum’s L1, the Coordinator in the Proving Layer assigns proof generation tasks to multiple Provers. Each Prover processes their assigned task and generates a validity proof. Once the proof generation is complete, the proof is submitted via the Rollup Node to the Rollup Contract on L1. Once Ethereum L1 verifies the validity proof, the transaction is considered fully finalized, and its finalized state is officially recorded in the Scroll L2 chain.

2-5. Fee design and protocol upgrades for cost efficiency

Scroll’s fee structure is designed to offer users significantly cheaper and more efficient transaction processing, without compromising the security of Ethereum’s Layer 1. The fee system is divided into two key components: Layer 2 gas fees (incurred within Scroll) and Layer 1 data gas fees (applied when transaction data is stored on Ethereum). This dual approach prioritizes cost efficiency while maintaining Ethereum’s security, resulting in transaction fees that are a fraction of Ethereum’s.

Layer 2 gas fees cover transaction processing on the Scroll network. Recent data indicates that Scroll’s average gas fee is 0.076 Gwei, roughly $0.0005, making it 99.4% cheaper than Ethereum’s average gas fee of 11.85 Gwei. This cost efficiency allows for predictable transaction costs and significantly boosts processing efficiency. Additionally, Scroll has continually reduced gas fees through technical upgrades, with the Darwin update recently achieving a further 34% reduction in fees. Layer 1 data gas fees arise when transaction data from Scroll is recorded on Ethereum’s mainnet. These costs depend on the size of the transaction data, but Scroll’s L1GasPriceOracle enables users to estimate these fees in advance, allowing for more efficient management of transaction costs. By continually refining its fee structure, Scroll ensures that users benefit from Ethereum-level security at a fraction of the cost, making it a highly competitive Layer 2 solution.

3. Rapid Ecosystem Growth Positions Scroll in DeFi’s Top 10 for TVL

3-1. DeFi-driven expansion powering scroll’s ecosystem growth

As of September 2024, Scroll’s TVL has surpassed $740 million, placing it in the top 10 of all protocols according to DeFiLlama. It ranks as the third largest among Ethereum rollups and stands as the clear leader in TVL among ZK rollups. This impressive growth demonstrates the strong interest Scroll has garnered from DeFi projects, largely due to its technical robustness and security assurances. To enhance user experience, Scroll aims to reduce its Time to Finality (TTF) to under one second by year-end, positioning itself as an ideal platform for DeFi services that require rapid and efficient transaction processing. Although Scroll has yet to conduct a token generation event (TGE), it has maintained substantial user engagement through its loyalty programs, which are based on on-chain activity, leading to significant anticipation surrounding potential airdrops. However, like other projects in the past, there is a risk that TVL could decline post-TGE if expectations around airdrops wane. To mitigate this risk, Scroll must implement sustainable incentive mechanisms, expand the number of onboarded services, and cultivate an ecosystem that encourages continuous user engagement.

Top DeFi Projects on Scroll

Scroll's TVL growth has been significantly influenced by various DeFi projects, each playing a vital role within the ecosystem. As shown in the above image, the top 10 DeFi projects are actively operating in different categories within the Scroll ecosystem, demonstrating positive results. Notably, Pencils Protocol has established itself as the largest DeFi project in the Scroll ecosystem, recording a TVL of over $330 million. In addition, Tranchess Yield and Aave V3 each maintain TVLs exceeding $100 million, driving Scroll’s growth. Various DeFi projects are rapidly expanding on Scroll, leveraging its scalability and compatibility with Ethereum.

• Pencils Protocol: This integrated DeFi platform, native to the Scroll network, leads the DeFi ecosystem with a TVL of over $330 million. It simplifies token launches through its auction platform and provides competitive yields across various assets via farming. The protocol supports advanced yield strategies, including leveraged yield farming and on-chain delta-neutral strategies, while engaging users through its Pencils community points system, which rewards active participants and drives strong user engagement.
• Tranchess: Tranchess is a yield-enhancing asset tracking protocol offering various risk-reward investment strategies based on assets like BTC, ETH, and BNB. It uses four tokens—QUEEN, BISHOP, ROOK, and CHESS—providing flexibility in asset allocation. Users can stake their tokens to earn CHESS and participate in governance, while the protocol allows them to choose investment strategies aligned with their preferred risk levels.
• Aave V3: Aave, a major DeFi project with a large user base, has selected Scroll as the first zkEVM-based ecosystem chain. By offering innovative features like Flash Loans, Aave provides users with diverse lending and borrowing opportunities. Through its collaboration with Scroll, Aave achieves enhanced security, faster transaction speeds, and lower gas costs. Furthermore, Aave V3 maximizes the scalability and efficiency of the Scroll ecosystem, establishing a critical foundation for future financial innovations.
• 0x: 0x is a next-generation trading engine integrated into Scroll, offering enhanced trade execution and monetization tools. Through its API, developers can tap into over 130 liquidity sources, ensuring optimal pricing for token swaps. This integration improves liquidity and trading efficiency within Scroll's DeFi ecosystem.
• Ethena: Ethena is a synthetic dollar protocol that provides fast and secure financial services using USDe, a stable asset backed by Ethereum and Bitcoin collateral through delta hedging. Integrated with Scroll’s zkEVM infrastructure, Ethena overcomes traditional stablecoin limitations, offering low fees and quick transactions. USDe liquidity is available on platforms like Nuri Exchange and Ambient Finance, benefiting from Scroll’s cost-efficiency and scalability.

Additionally, a range of DeFi projects such as Rho Markets, Kaskade Finance, and Maverick Protocol have joined the Scroll ecosystem, contributing to its rapid expansion. Notably, Scribe Protocol, a project led by a Korean team, is rapidly growing as a key player within Scroll’s ecosystem, particularly within the Korean blockchain community.

Although Scroll is still in the early stages of building its ecosystem compared to other Layer 2 solutions, it continues to show steady growth in both transaction volume and user base. In particular, major DeFi projects such as 0x, Ethena, and Aave have announced integrations or partnerships with Scroll, which have positively impacted transaction volumes and accelerated ecosystem expansion. Moreover, Scroll’s Canvas and Badge Certification events have been key contributors to transaction growth, with a record 600,000+ daily transactions recorded on July 15, 2024.

According to Scroll Stats, the Scroll Pump Airdrop event has played a crucial role in boosting both transaction volume and user engagement. Over one month, transactions surged by 119%, while wallet numbers increased by 125%, driving short-term activation within the Scroll ecosystem. While these events have led to rapid transaction and wallet growth, sustainable user experiences and long-term growth strategies will be essential for ongoing user retention and ecosystem development.

3-2. Driving global expansion with Scroll’s new use cases and outreach initiatives

While Scroll’s initial focus has been on DeFi, the long-term vision is to become a Layer 2 solution capable of supporting global mass adoption. Currently, Scroll is positioning itself as critical infrastructure for both payment systems and financial services, while actively developing non-DeFi use cases. A notable example is ADrop, an AdTech project that maximizes ZK technology by leveraging ZK proofs to process de-identified customer activity data, which will be used to create ad monetization models.

In addition to this, Scroll is focusing on blockchain-based financial services aimed at underserved populations, particularly in regions like Africa, Latin America (LATAM), and Southeast Asia. Scroll plans to onboard local stablecoins and yield products in these areas to increase market share. This strategy presents a significant opportunity to provide financial solutions to the unbanked and underserved.

Etherfi Cash X Scroll (Source: https://x.com/ether_fi/status/1833132921143906398)

In the payments space, Scroll has taken a pivotal role with its recent collaboration with Etherfi. Etherfi has selected Scroll to power its new Visa “Cash,” a crypto-native credit card, offering gasless transactions. This card enables users to use their cryptocurrency as collateral for payments in the real economy, both online and offline, much like a credit card, and provides up to 8% cashback on transactions. Additionally, Scroll aims to reduce transaction finality to under 1 second by the end of the year, positioning itself as key Web3 infrastructure for payments and settlement systems.

Alongside this business expansion, Scroll is actively growing its developer ecosystem through education, hackathons, and grant programs. Scroll has partnered with online education platforms to provide easily accessible learning content for developers, and it is working with academic entities to create programs linked to student communities. In South Korea, Scroll holds regular AMA sessions via the Scroll Korea community and social media accounts to engage with local participants. Globally, Scroll hosts regular hackathons, including "V0RTEx," its first large-scale online hackathon, which attracted projects across DeFi, NFTs, gaming, and privacy. With over $50,000 in prize money and $35,000 in partner bounties, the hackathon successfully brought promising builders into the Scroll ecosystem. To further onboard projects, Scroll has focused on its grant program. The first round concluded in August 2024, with the second round currently being prepared.

3-3. $SCR Tokenomics: Fostering a Community-Driven and Sustainable Ecosystem

Scroll recently launched its $SCR token and unveiled its tokenomics. $SCR is set to play a pivotal role in the decentralization of the Scroll ecosystem, being used in governance, proving networks, and sequencing networks. Token holders will be able to participate in Scroll's governance, and in the long term, $SCR will serve as an incentive for both Proving and Sequencing operations. Moreover, $SCR is designed to support the growth of the ecosystem and projects, promoting sustainable development for the community and broader ecosystem.

The tokenomics strategy reflects a global expansion plan, with 35% of the total supply of 1 billion tokens allocated for ecosystem and growth initiatives, and 15% set aside for airdrops. By allocating relatively smaller portions to the team and investors, Scroll emphasizes its commitment to a community-first approach. The 5.5% allocation to Binance Launchpool sparked some debate, but Scroll clarified that the distribution is intended for Binance ‘users’, not the platform itself, aiming to expand its global user base and boost on-chain activity. It is essential that the funds serve not merely as a marketing initiative but as a catalyst for ecosystem growth.

4. Final Remarks: Scroll’s Mission to Become Ethereum’s #1 Rollup Solution

As Base, Blast, and other Layer 2 solutions launch their mainnets, the Layer 2 market has become highly competitive. Amidst this, Scroll has attracted the attention of venture capitalists and investors with its ZK proof-based technological innovation and rapid ecosystem expansion. Built on zkEVM technology developed through its in-house research, Scroll offers near-perfect compatibility with Ethereum, successfully overcoming the performance and developer experience limitations of existing ZK rollups. Thanks to this technical excellence, Scroll quickly entered the top 10 in terms of TVL (Total Value Locked) and has successfully onboarded major DeFi projects, solidifying its presence in the Layer 2 market.

However, the key challenge for Scroll is how to continue expanding its ecosystem with meaningful use cases after the initial DeFi hype subsides. A common challenge that many Layer 1 and Layer 2 projects face is transitioning beyond technical accomplishments to creating real-world use cases that provide lasting value. In this regard, Scroll’s global expansion strategy will play a crucial role. Scroll is focused on delivering financial solutions to underserved regions like Africa and Latin America (LATAM) by onboarding stablecoin products and activating local builder communities. By moving beyond mere technological implementation and creating applicable use cases across various regions, Scroll can drive sustained growth. With its innovative technology and global growth strategy, the future that Scroll will shape within the Ethereum ecosystem is highly anticipated.