zkSync Era: The Landing Of Massive Scam Projects

Value upgrade

zkSync has substantially transformed since 2021; instead of developing a new language, zkSync focuses on being highly compatible with EVM. So far, zkSync has achieved many successes. Specifically, there are hundreds of projects registered to deploy on the zkSync mainnet; the project has also raised a total of 458 million USD. zkSync is expected to be one of the best-performing layer 2 zk-rollups for Ethereum.

zkSync is a Layer-2 scaling solution developed by Matter Labs, aimed at reducing costs, speeding up transactions, and providing security on Ethereum using ZK Rollups technology.

As zkSync looks to the future and continues to build, they have chosen a name representing a new stage in cryptocurrency adoption. A name includes the following characteristics:

This is precisely why the name Era was born. zkSync Era is a trustless zk-Rollup, built on the SNARK platform, that uses ZKP to provide scalability with low transaction costs on Ethereum. All assets are stored in a single, smart contract on the main chain, while computation and data storage are done off-chain.

zkSync Era has more outstanding features such as:

• Mainnet-like security without third-party dependencies.
• EVM-compatible smart contracts are permissionless.
• Standard Web3 API.
• Maintain key EVM features, such as smart contract aggregation capabilities.
• Introducing new features, like account abstraction and meta-transaction.

zkSync Era is made to look like Ethereum, but with lower fees. Like on Ethereum, smart contracts are written in Solidity/Vyper and have the same usage as other EVM-compatible chains.

The landing of scam projects

Gemholic project conducted IDO on layer 2 zkSync protocol and obtained 921 ETH, which is having difficulty accessing its funds. The incompatibility with the transfer function prevented Gemholic from withdrawing its Ethereum.

The team confirmed that the funds were safe. Furthermore, the protocol is different from EVM (Ethereum Virtual Machine), which is what causes incompatibilities. Gemholic just launched their token contract and did a pre-sale on the zkSync Era. However, they had problems with their contract due to using the transfer function.

The team behind ZkSync, @the_matter_labs rescues the @GemholicECO after a botched token sale, allowing them to retrieve 921 $ETH ($1.7M) raised. ?

GemSwap is the 5th largest #DeFi protocol on @ZkSync Era, with a $3.7M TVL.https://t.co/vjBbFMICXr

— The Defiant (@DefiantNews) April 11, 2023

The smart contracts were deployed on zkSync without any prior checks. However, the developers from ConsenSys warned about using the Solidity transfer function in 2019. This function uses a fixed amount of hard-coded gas, which makes them fail because the transfers currently use more.

zkSync also warns about this limitation and its impact on smart contracts. Furthermore, the team examined the source code of “dozens of popular crypto projects”, finding all of them compliant with the new dynamic system.

Aside from SyncSwap, Velocore is the second ranked DEX in the zkSync Era. However Velocore, which bears the first tick token in the zkSync Era as a VC, has stated before the sale that it will effectively solve the inherent problem of overselling by combining incentives with commitment . As a result, the community was once very active and the pre-sale sold out in just a few minutes, exceeding expectations by 1800%, accumulating around 8,600 ETH and TVL skyrocketing.

However, with the distribution of the project’s airdrop rules, many community members found that the airdrop still needed to be unlocked linearly, all of them calling Velocore’s move shameful and showing signs of remorse when the airdrop distribution and the VC price plummeted, respectively. At this time, the group members did not handle the crisis but opened a new Twitter account, preparing to launch a new ID0, the psychology of the community members collapsed again.

Compared to Gemholic’s funds being blocked and Velocore suspected of running away, corehunter, Syncdex and ZksYncHero have directly deleted their Twitter accounts, which more directly confirms their absconding.

At first, after corehunter raised 300 ETH, it closed the site and ran away.

Over the next few days, some questioned that the Syncdex smart contract did not allow withdrawals in the commit. At the same time, some discovered that the official tweet of the suspected project party was moved to change the word handle betgosu. The community questioned this in DC. Still, British officials kept quiet and even kicked out members who mentioned betgosu.

As the scam gradually came to light, the team couldn’t explain the lie anymore, first closing the reply and finally directly deleting the account. SlowMist also issued a security warning: “The SyncDex project has been withdrawn, resulting in over $370,000 in losses.” SyncDex confirmed the action of cutting the leek at 3:00 am UTC+8, and the official Twitter account has been removed.

After the MistTrack team investigated, they discovered that these funds were converted to Ethereum, transferred to Binance Smart Chain, then converted to BNB again, and finally moved to the MEXC trading platform. The initial amount of the project also came from the MEXC trading platform.

The operation of ZkHero and SyncDex is almost the same. First is to open the coin directly without fuss, get community members to connect to ZkSyncHero with their wallet, and click to get a Token. Then the wallet will be blocked, stolen, and empty. To prevent such voices from being heard, ZkHero disabled the comments and then directly deleted the account.

Some community members said 50% of ZkHero’s TGE was pre-sold and 5% was given to the team. Anyone who has watched the token distribution can judge this as a scam. According to the information on the chain, the ZkHero team eventually moved the “hacked” Token to several different addresses, suspected of sharing the spoils, 10 ETH each.

Conclusion

The recent airdrops have led to increasingly high expectations. The FOMO sentiment has also led to frequent interactions between the zkSync Era and other L2, causing the zkSync Era to skyrocket in terms of short-term TVL, wallet count, and demand cross-linking of catalog data skyrocketed not because of the intrinsic value of the zkSync Era or how well its ecological projects are doing.

The fact that a series of scam projects have landed in the zkSync Era, makes it even more difficult to identify serious projects. Some also pointed out that the zkSync Era is helping to promote scams and that the ecosystem should take some responsibility for “review” and “KYC”.

Due to the low operating costs of the zkSync Era, there have been a lot of projects running and chain reactions lately, and the community has also experienced a great crisis of confidence in all projects in the zkSync Era ecosystem and simultaneously became more cautious and strict with the team members.

New public chains, including the zkSync Era, also need to think more about how to prevent their ecosystem from being engulfed in scams and runaway projects while supporting several powerful platform projects. Strong and serious in the early stages of testing and launching that some toxic anonymous dirty dogs have no undue effect. In the early stages of being unable to control the earth dog project line, they showed their attitude and distanced themselves from the position of the earth dog project.

Of course, we all know that the zkSync Era is one of the most anticipated and promising public chains on the ZK track, and it will be a very long time until the day the zkSync Era takes off.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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