How has the Polygon zkEVM ecosystem developed in the 2 months since its launch?

Written by: 2Lambroz.eth

*Compiled by: Heimi, * Baize Research Institute

Have you learned about the development of Polygon zkEVM? Not an airdrop hunter or an alpha hunter, but want to know what’s happening on this L2?

In 3 minutes, let me take you through everything you can do on Polygon zkEVM, whether the ecological projects are opportunities or just pure airdrop speculation.

zkEVM is considered the holy grail of Ethereum scalability. Polygon is one of the leading explorers in this field, with its Polygon zkEVM being the second zkEVM to launch its mainnet after zkSync Era.

In this article, we mainly discuss three things:

1. Opportunities on Polygon zkEVM

2. Overview of on-chain assets on Polygon zkEVM

3. All Dapps currently on Polygon zkEVM

4. Thoughts and conclusions

Opportunities on Polygon zkEVM

Let me show you some "temptations" ------ the current APR on Polygon zkEVM, and see how high the liquidity mining returns are.

QuickSwap

The TVL on the zkEVM chain is about $7 million.

USDC/DAI - 173%

USDT/DAI - 146%

USDC/WBTC - 63%

But this high yield is not just set to attract liquidity; if you check on CoinGecko, you can find that the actual trading volume/liquidity ratio is also quite high.

Dovish Finance

The TVL is only $550,000.

The current TVL of the wETH/frxETH pool is 4.5 ETH, but the total daily yield is only 10 FXS, which is obviously not attractive.

USDC/FRAX is similar, with a TVL of $18,000 and a total daily yield of only 10 FXS. Assuming the FXS price stays at $7, then providing $1 of liquidity averages only $0.003 daily (70/18000).

The project team is also using the platform token $DOV as an incentive in some liquidity pools, but the wETH/DOV LP is very thin, with only 24 wETH paired, resulting in low liquidity. I’m not sure how $DOV will gain its value, but it’s worth keeping an eye on.

Mantis Swap

I couldn’t find a stablecoin exchange AMM on Polygon zkEVM, so my friend recommended Mantis Swap to me:

• Possibly the first stablecoin trading protocol

• Single-token mining

Overview of On-Chain Assets on Polygon zkEVM

Polygon zkEVM is currently just a "baby," with a TVL of only about $10 million.

USDT - $700,000

USDC - $2.3 million

DAI - $80,000

BTC - $700,000

WETH - $2.3 million

Matic - $3.5 million

Interestingly, the Frax ecosystem has existed for a while:

sfrxETH - $475,000

frxETH - $455,000

FPIS - $469,000

FXS - $180,000

NFTs have not been crazily minted yet, but it seems some projects are laying the groundwork.

All Dapps Currently on Polygon zkEVM

QuickSwap

Currently the largest DEX on Polygon zkEVM.

Dovish Finance

Swap, with perpetual contract functionality coming soon.

However, the current liquidity mining is not very attractive.

Uniswap

The on-chain vote for "launching Uniswap V3 on Polygon zkEVM" has passed and should be coming soon.

LeetSwap

A swap built on both Canto and Polygon zkEVM, but the UI currently cannot connect to zkEVM.

Antfarm Finance

Antfarm is a swap that prioritizes liquidity providers, aiming to provide more profits and security for liquidity providers by leveraging market price changes. The current TVL is $1.07 million, which looks decent.

0VIX

A lending protocol, but currently there isn’t much liquidity available to borrow.

However, borrowing money on Polygon zkEVM is really not worth it right now. If you are cross-chain to zkEVM just to borrow money, you might as well do something on those platforms that offer high APY.

But if you are an airdrop hunter, it might be worth a try.

D8X

An upcoming institutional-grade perpetual DEX.

Satori Finance

A perpetual DEX backed by PolyChain and Coinbase.

zkEVM Swap

A small swap that is not very popular on Twitter and has no more information available.

zkDeFi

A low-profile swap that also has liquidity mining and Launchpad features, built on zkSync and coming soon to Polygon zkEVM.

Thoughts and Conclusions

Polygon zkEVM is a "baby" L2 backed by the experienced Polygon development team and has airdrop expectations.

As Polygon founder Sandeep Nailwal, whom I have always respected, said:

"The Polygon zkEVM ecosystem is preparing for a significant upgrade through key infrastructure deployments (like Safe), the arrival of oracles (like Chainlink), improving user experience based on early developer feedback, cost optimization using data compression, and more. Moreover, there is no stipulation that existing tokens (MATIC) cannot undergo large-scale airdrops."

The advantages of Polygon zkEVM include:

1. Backed by Polygon, making it easy to attract more protocols to develop

2. The team has strong business development skills to invite more protocols to migrate

3. An active community

However, Polygon zkEVM also faces some challenges:

1. Polygon is trying to do many things: DeFi, Web3 gaming, Web2 adoption

2. Their DeFi has slowed down a lot, and they consider "the king" to be QuickSwap

3. Zero-knowledge proof technology is cool, but how many people really care about it?

If you want to try using Polygon zkEVM, you may find that most cross-chain bridges have low liquidity. You can basically only cross-chain ETH from the Ethereum mainnet to here. So, so far, the user experience on Polygon zkEVM is not great (but it is still early).

I enjoy mining in DeFi, and the high APY offered by existing DeFi Dapps is beneficial for me.

Therefore, while Polygon zkEVM may be a bit early for a broader audience, it is worth keeping an eye on.