ZkSync Era stablecoin liquidity dips slightly: Why is this a big deal?
- ZkSync Era stablecoin liquidity experiences major outflow for the first time in two months.
- A look at why the ZkSync snapshot may have had an impact on stablecoin liquidity.
ZkSync Era reportedly experienced a 2% dip in stablecoin liquidity in the last week or so. You are probably wondering why this is such a big deal considering how volatile things are in the crypto world. But there is a reason why this development is important.
It turns out that this is the first time that ZkSync Era recorded a weekly dip in stablecoin liquidity for the last two months. The relative stability that the project’s stablecoin liquidity achieved in the last few weeks. So, a sudden change is bound to trigger some attention.
In a surprising turn of events, the Zksync Era has experienced its first net weekly decline in stablecoin liquidity since May of this year.
— Emperor Osmo? (@Flowslikeosmo) July 11, 2023
There has been a lot of speculation regarding the stablecoin dip. Some believe that the change could be due to liquidity providers moving to different DeFi farming protocols. Perhaps the biggest potential reason is the upcoming ZkSync airdrop.
Is the ZkSync airdrop to be blamed?
A snapshot usually takes place prior to an airdrop. The goal of snapshots is to determine who is deserving of the planned airdrop. This creates an incentive for users to hold a particular token or asset within a specific ecosystem. In this case, the airdrop is for the launch of ZkSync Era’s native token.
There was speculation that the recent dip in stablecoin liquidity on ZkSync Era was due to a post-snapshot liquidity exit. The platform was scheduled to hold a snapshot prior to the airdrop of its native platform. Individuals were looking to capitalize on the snapshot and upcoming airdrop.
After digging on the internet, there were multiple reports stating that the snapshot has been taken. However, official sources have not yet confirmed this development. However, we did find this recent post regarding the upcoming airdrop which suggested that the timeline is rapidly counting down to the token release.
In addition, the announcement confirmed a partnership between ZkSync and Ledger that will facilitate the airdrop.
Congratulations on the partnership between Ledger and zkSnyc!
Can now enjoy a faster and lower-fee transaction experience with zkSnyc. As a token of appreciation
There is a special airdrop for everyone using the Ledger wallet and the Zksnyc network! pic.twitter.com/DF2eTpA9wz
— zkSync ∎ (@zkysncEra) July 11, 2023
So why the hype about ZkSync Era?
ZkSync is not entirely new. The first iteration was designed as an Ethereum layer-2 scaling solution incorporating zero-knowledge tech. However, it lacked smart contract support. ZkSync Era is the version that has smart contract compatibility. In addition, this new layer 2 scaling solution is designed to feature lower costs, hence its appeal.
In summary, the excitement behind ZkSync Era is because it is the first ZkEVM layer 2 to join the Ethereum mainnet.