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The ZKSpace platform consists of three main parts: a Layer 2 AMM DEX utilizing ZK-Rollups technology ZKSwap v3, a payment service called ZKSquare, and an NFT marketplace called ZKSea.

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Risk summary


Validity proofs ensure state correctness

Each update to the system state must be accompanied by a ZK Proof that ensures that the new state was derived by correctly applying a series of valid user transactions to the previous state. Once the proof is processed on the Ethereum blockchain the L2 block is instantly finalized.

    1. ZKSwap Introduces Practical ZK-Rollups - Medium blog

    Zero knowledge SNARK cryptography is used

    Despite their production use ZK-SNARKs are still new and experimental cryptography. Cryptography has made a lot of advancements in the recent years but all cryptographic solutions rely on time to prove their security. In addition ZK-SNARKs require a trusted setup to operate.

    • Funds can be stolen if the cryptography is broken or implemented incorrectly.
    1. ZKSpace Whitepaper

    All data required for proofs is published on chain

    All the data that is used to construct the system state is published on chain in the form of cheap calldata. This ensures that it will always be available when needed.

      1. ZKSwap Introduces Practical ZK-Rollups - Medium blog


      The system has a centralized operator

      The operator is the only entity that can propose blocks. A live and trustworthy operator is vital to the health of the system.

      • MEV can be extracted if the operator exploits their centralized position and frontruns user transactions.
      1. ZKSwap Validator - ZKSwap wiki

      Users can force exit the system

      Force exit allows the users to escape censorship by withdrawing their funds. The system allows users to force the withdrawal of funds by submitting a request directly to the contract on-chain. The request must be served within a defined time period. If this does not happen, the system will halt regular operation and permit trustless withdrawal of funds.

      • Users can be censored if the operator refuses to include their transactions. They can still exit the system.
      1. ZkSync.sol#L404 - ZKSwap source code


      Regular exit

      The user initiates the withdrawal by submitting a transaction on L2. When the block containing that transaction is proven the funds become available for withdrawal on L1. Finally the user submits an L1 transaction to claim the funds. This transaction does not require a merkle proof.

        1. Make Transaction

        Forced exit

        If the user experiences censorship from the operator with regular exit they can submit their withdrawal requests directly on L1. The system is then obliged to service this request. Once the force operation is submitted if the request is serviced the operation follows the flow of a regular exit.

          1. ZkSync.sol#L404 - ZKSwap source code

          Emergency exit

          If enough time passes and the forced exit is still ignored the user can put the system into Exodus Mode, disallowing further state updates. In that case everybody can withdraw by submitting a zero knowledge proof of their funds with their L1 transaction.

          • Funds can be lost if the user is unable to generate the non-trivial zk proof for exodus withdraw.
          1. ZkSyncCommitBlock.sol#L230-L246 - ZKSwap source code

          Permissioned Addresses

          The system uses the following set of permissioned addresses:

          • zkSpace Admin 0xfCAE…05Be (EOA)
            This address is the master of Upgrade Gatekeeper contract, which is allowed to perform upgrades for Governance, Verifier, VerifierExit, PairManager, ZkSeaNFT and ZkSync contracts.
          • Active validator 0x5bd9…41E2 (EOA)
            This actor is allowed to propose, revert and execute L2 blocks on L1. A list of active validators is kept inside Governance contract and can be updated by zkSpace Admin.

          Smart Contracts

          A diagram of the smart contract architecture
          A diagram of the smart contract architecture

          The system consists of the following smart contracts:

          The current deployment carries some associated risks:

          • Funds can be stolen if a contract receives a malicious code upgrade. There is a 8 days delay on code upgrades.
          • Funds can be stolen if the source code of unverified contracts contains malicious code (CRITICAL).