Swiss zKSync Startup Raises $2 Million to Enhance Gas Abstraction and On-Chain Experience

Swiss startup Zyfi, Paymaster-As-A-Service platform, has secured $2 million in a private funding round. As per the announcement on June 10, this strategic investment aims to propel Zyfi’s innovative gas abstraction layer on zkSync, which promises to transform the on-chain experience through native account abstraction.

Zyfi is redefining the DeFi landscape by enabling any tokens to be used as gas for transactions. The funding round saw participation from leading industry players, including Everstake Capital, Tenzor Capital, Apvc.capital, Criterionvc, NxGen, Majinx Capital, v3ntures, Momentum8, and several other investors.

With over 815,000 transactions processed and more than 110,000 users benefiting from gasless flows on zkSync, Zyfi has demonstrated its capability and appeal. The platform has successfully integrated with major protocols such as Zerolend, Increment Fi, Pancakeswap, zkMarkets, Libera, and various NFT collections on zkSync.

Zyfi Aims to Solve Critical DeFi Bottlenecks

The DeFi ecosystem often struggles with cumbersome user experiences, particularly when users run out of gas mid-transaction. Zyfi addresses this issue by leveraging native account abstraction on zkSync.

This technology allows decentralized applications (dApps) to offer users the option to pay gas with any ERC-20 token or for the dApps to sponsor part or all of the gas costs using custom logic.

This innovative approach simplifies transactions and removes the need for users to manage Ethereum for gas fees, thus democratizing access to DeFi services.

Zyfi’s solution is powered by an API that abstracts protocol complexities, allowing developers to focus on building their products. This not only enhances user experience but also promotes broader on-chain engagement.

“At Zyfi, we are dedicated to tackling crucial challenges within the DeFi ecosystem and empowering builders to create seamless DeFi experiences for users. This is revolutionary because developers can now concentrate on enhancing their products with an API that simplifies the intricacies of protocols,” said Gauthier Vila, Founder of Zyfi.

Denys Vashchuk, General Partner at Everstake Capital, echoed this sentiment: “Zyfi accelerates zkSync adoption and empowers developers to prioritize innovation, enhancing user experience without distraction. It’s the go-to tech stack for every dApp developer, backed by a strong team, tech, and vision.”

The newly acquired $2 million will be strategically utilized to support the development of software development kits (SDKs) and paymaster services for dApps.

Additionally, Zyfi plans to drive utility for governance token holders and advocate for research on account abstraction across all blockchain networks, including the implementation of EIP-7702.

ZK Rollups Bucking the Trend in 2024

The ZK rollup trend gained significant traction in 2024, leading to the emergence of several high-profile projects. This surge was driven primarily by the desire to offload the majority of activities from the Ethereum mainnet, enhancing scalability.

Additionally, the growing need for confidentiality played a crucial role, as ZK rollups enable validators to verify transaction authenticity without disclosing excessive information, thereby maintaining privacy.

ZK rollups are not inherently confidential, as their block explorers can reveal sender and receiver addresses. However, some ZK rollup projects enhance financial privacy or support anonymous voting by concealing user information.

Adoption of ZK rollups began less than two years ago, with Polygon being among the early adopters. The 2024 bull market boosted the prominence of ZK rollups, turning “ZK” into a recognizable brand.

Matter Labs, the developers of the Ethereum layer-2 scaling solution zkSync, have decided to abandon their efforts to trademark the term “ZK,” which stands for “zero knowledge” proofs.

This decision follows strong criticism from ZK researchers, who argued that ZK technologies should be treated as a public good accessible to everyone.