Vessel Finance: ZK orderbook L3 on Scroll explained
Thread1,046 words
30-part thread on Vessel, a ZK-powered orderbook DEX run as an L3 on Scroll with a verifiable AMM-embedded limit order book, SNARK-proven state updates and forced withdrawals. Backed by a $10M seed led by Sequoia; the thread includes the author's referral link.
Key claims
$10M seed led by Sequoia
Scroll TVL $1.14B, up 12% in 7 days
Vessel supports gasless spot and perps trading
Daily spot trading volumes on CEX can exceed $100B & perp volumes are easily up to $500B
I found a DEX that raised $10M from major VCs that could capture this volume and put @binance & co out of business
Airdrop coming up too 🪂
🧵 on the 1st ZK-powered orderbook L3 on Scroll t.co/vG6up9AHsF
1/ Today, we talk about @VesselFinance. 🚢
Backed by @sequoia and the @Scroll_ZKP core team among other prominent investors, this is one of the most expected DeFi and L3 launches of the year.
There are no modular super-dApps?
Wrong, you just haven't met Vessel yet. 👇
2/ If you want to get started right away, use my link to get access!
Start earning mileage by providing liquidity and referring friends.
👇 Join here! 👇
☞ trade.vessel.finance/login?code=QpHHNZ
3/ If you want to dive in, let's start with why @VesselFinance matters.
Crypto trading is a multi-billion $$$ business.
While the game is still dominated by CEXes, the trend towards decentralized infrastructure is evident.
4/ Ever since Uniswap disrupted the crypto space with the AMM model in 2018, DeFi has flourished.
The design space has broadened from simple AMMs and lending protocols to more complex financial products such as derivatives.
5/ Smart contract based trading systems bear great potential to solve trust issues and provide the transparency and security that traders seek, especially after disasters like FTX.
6/ However, many of the contemporary DEXes suffer under limitations that often arise from the underlying blockchain infrastructure.
Even today, the transaction costs remain high compared to traditional systems and often the speed of execution is sub-par too.
7/ And even aside cost, decentralized systems are still battling UX issues.
Using smart contracts requires spending gas and waiting for transaction validation, making high-frequency trading nearly impossible.
8/ @VesselFinance aims to change this, merging the high-performance UX of centralized platforms with the transparency and security of decentralized networks.
9/ So, let's talk about @VesselFinance, the ZK powered DEX, implemented as a L3 on @Scroll_ZKP.
Self-developed core ZK circuits for efficient order matching, a novel verifiable AMM-embedded limit order book (VAELOB) model, and a fully non-custodial design.
10/ As a L3 rollup, @VesselFinance is not just a set of smart contracts on @Scroll_ZKP
While the Vessel contract acts as a secure vault for user assets, the sequencer and verifier are two critical components that uphold the integrity of the ZK infrastructure.
11/ These SNARK proofs are verified by a public, upgradeable SNARK verifier (another smart contract).
Vessel's open-source circuit lets anyone generate and compare SNARK verifier bytecode with the on-chain verifier, ensuring state updates match the circuit rules.
12/ Wait, what is a circuit?
A "circuit" refers to a computational model that represents a mathematical problem or computation as a series of logical gates or arithmetic operations.
Think of it like a blueprint for a specific calculation or problem.
13/ In @VesselFinance's architecture, the operational logic (how state changes) is represented as a specialized circuit, with the prover generating proofs of that circuit computation using inputs provided by the sequencer.
14/ These proofs are generated in parallel to maximize throughput but are committed and verified on-chain in the same logical order as the sequencer processes requests.
15/ A core element of this rollup architecture is the sequencer.
The sequencer receives user requests and orders transactions into rollup blocks.
Sequencers work as order matching engines that provide us with the fast UX we know from CEXs.
16/ Vessel is currently also exploring solutions for pre-confirmations and fast finality in a partnership with @radius_xyz, a shared sequencing & composability layer that provides fast, crypto-economically secured services.
x.com/radius_xyz/status/1802991671438901354
17/ For the withdrawal request however, users still need to request to transfer assets out of the on-chain vault.
Such on-chain transactions need a valid proof, so users must wait for proof generation and finalization before claiming their assets.
18/ However, the lengthy wait for withdrawal requests can be bypassed through a fast withdrawal mechanism, where the operator vouches for the withdrawal request and sends assets to the withdrawer on-chain using an insurance fund.
19/ To avoid censorship from the sequencer (that can not steal funds due to the SNARK scheme), users can force withdrawals to L1.
A forced withdrawal is executed by sending a withdrawal instruction to the contract and prompting the prover to commit a SNARK proof in response.
20/ While many are often critical towards the need for "yet another layer" and L3 rollups, I personally believe this design makes a lot of sense for @VesselFinance.
21/ In order to provide a CEX-style UX, @VesselFinance needs to maximize throughput and minimize cost.
By recursively scaling with a rollup-on-rollup architecture and specialized ZK circuits that prove off-chain computation, Vessel does exactly that.
22/ It allows @VesselFinance to provide gasless trading at unprecedented speed with the transparency & security of the underlying blockchains.
Vessel will support both spot and perps trading and is committed to expanding the product suite further down the line.
23/ A key focus of the future product development is to take @VesselFinance multichain, addressing the liquidity fragmentation across ecosystems.
To further improve efficiency of the trading system, Vessel is also researching proof aggregation techniques.
24/ Since yesterday, @VesselFinance is live on mainnet.
Find all the information about the mainnet launch and their Voyage program in my post below! 👇
x.com/zerokn0wledge_/status/1822937373409149371
25/ @VesselFinance is definitely one of the most advanced, decentralized trading systems I have come across so far.
The tech is cutting-edge and I think building on @Scroll_ZKP is a "right place at the right time" kind of move, with Scroll currently being the hottest L2.
26/ TVL on @Scroll_ZKP has recently breached $1B and has grown 12% in the past 7 days.
TVL currently stands at $1.14B.
27/ Backed by @sequoia, the @Scroll_ZKP core team and with $10M in seed funding raised, the future for Vessel looks bright.
28/ This will be a flagship application in the @Scroll_ZKP ecosystem.
Since you can farm both $SCROLL and $VESSEL at once, this one is a nobrainer imo.
Be early anon.
That's a wrap! I hope you've found this thread helpful! 🫡
Make sure to follow me @zerokn0wledge_ to stay ahead of the curve on all the emerging L2s & L3s!
Like/Repost of the below post is also highly appreciated! 🙏👇
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