Recently, there has been an interesting technological direction—Layer 2 solutions based on zero-knowledge proofs, aimed at addressing the two major pain points in DeFi today: Gas costs and privacy protection.

Simply put, what are the core advantages of these solutions? First, they significantly reduce transaction costs, which directly improves user experience. Second, they offer institutional-grade asset privacy protection—this is highly attractive for large transactions and institutional clients. From an architectural perspective, modular design allows developers to flexibly build customized applications, and ecosystem participants can also engage in decision-making and liquidity mining through governance tokens.

In addition to these fundamental features, cross-chain interoperability and compliance-friendly design concepts are pushing the boundaries of Layer 2 solutions. Based on the activity on testnets, community interest continues to rise, reflecting market expectations for the ZK track.

Regarding investment opportunities, it depends on the development potential of the entire ecosystem—token economic models, developer incentives, and user growth are all critical factors. If a healthy ecological closed loop can be established, there is still room for explosive growth in future ZK-related projects.