Zircuit: Understanding the Hybrid Architecture L2 Supported by Binance, Pantera and Dragonfly
Colin Wu, founder of Wu Blockchain, speaks with Zircuit co-founders Martin Derka and Angel Xu about Zircuit’s project background, technical architecture, and development plans. Leveraging their experience in smart contract auditing, Zircuit has gained support from notable investors like Binance. Built on Ethereum’s OP Stack and incorporating zero-knowledge (ZK) technology, Zircuit has developed a “Sequencer-Level Security (SLS)” system to proactively identify potential risks. Additionally, Zircuit promotes cross-chain collaboration with ecosystems like Solana and attracts developer participation through its “Build to Earn” initiative and staking incentives.Zircuit previously received investments from Binance Labs, Pantera Capital, Dragonfly Capital, and Maelstrom.
Recently, a collaboration event has been launched between Zircuit and Binance Web3 Wallet. Meanwhile, the Eigen Fairdrop has officially started, with all eligible wallets receiving identical rewards. Visit app.zircuit.com/fairdrop.
This article is sponsored by Zircuit
Opening & Introduction
Colin:
Welcome Martin and Angel. Could you start by giving us a brief introduction to the Zircuit team and your backgrounds?
Martin:
We actually have four co-founders on board. Myself and my colleague Jan are the technical co-founders at Zircuit. We have quite similar profiles; we both hold PhDs from the University of Waterloo in Canada. We worked for a long time as smart contract auditors at a leading company providing smart contract security audits. Given our academic background, we’ve done extensive research there as well. Outside of that, we’ve both been working in software engineering across various capacities at small and large companies for the past 10 to 15 years. At Zircuit, we ensure we’re delivering the platform we envisioned, focusing on stability, accessibility for users, and security.
Angel:
Krishna and I are the business co-founders. We’ve worked together for many years, and Krishna has been involved in crypto since around 2016. Both of us have invested in and advised numerous projects over the years. Previously, I worked on my own startup and led investment initiatives as well. Essentially, all of us met through work and have been colleagues for a long time, which has built a strong, trusting relationship among us. Thanks.
Your project received investments from Binance, Pantera, and Dragonfly. How did you secure funding from them?
Colin:
We already read the news that your project received investments from major players like Binance, Pantera, and Dragonfly, some of the top investment firms in the crypto industry. How did you manage to secure investment from them? Could you share any insights for other projects, especially since every project aims to attract investment from firms like Binance?
Angel:
Yeah, in our case, most of the research and development for Zircuit was self-funded. We didn’t start raising funds until we had actually built out the product. We only sought funding once we had the roll-up ready. We also have some unique Features compared to other roll-ups, particularly in terms of security at the sequencer level. So, when we went into fundraising, it was relatively easy to convince investors because they could see the product in action and clearly understand how our Features add value for users and projects.
A lot of projects these days start raising funds at the idea stage or before there’s a product, which can make it harder for investors to fully grasp the vision and the broader impact. For us, another factor was that we’ve all been in the industry for quite a while, and through that, we’ve built many partnerships and friendships. Many of the people we raised funds from already knew us, which made the process more straightforward.
Did Zircuit receive any early grants from the Ethereum Foundation, and what role has it played in your project?
Colin:
Zircuit received some grants from the Ethereum Foundation early on, right? So your team joined the Ethereum ecosystem at a very early stage. What do you think about the Ethereum Foundation’s support for your project and other ecosystem projects?
Martin:
To clarify, Zircuit as a company wasn’t directly awarded grants by the Ethereum Foundation. However, some of the co-founders did receive grants from the Ethereum Foundation to work on various research topics. For example, one grant awarded to Jan focused on researching the security of roll-ups and existing roll-up chains. During this work, we developed an extensive security framework for assessing the security of roll-up networks. This research gave us significant insight into vulnerabilities in the space, highlighting what roll-ups might handle well and what they might not. Having this knowledge provides us with a comprehensive overview of the current state of roll-up security, which we can leverage to improve Zircuit. Our goal is always to aim for the best possible approach, and it all starts with research.
Another research grant awarded to us focused on roll-up data compression. Roll-ups inherently generate a large amount of data, as users send transactions to the roll-up, which processes them off the main chain (L1). The role of the roll-up is then to take these transactions and record the data on the data availability layer, ideally using L1 as this layer.
We found that the compression algorithm used by Zircuit saves roughly 40% in costs, which is a valuable outcome. While compression requires additional computational performance, it’s a trade-off that can bring substantial benefits. This research allowed us to address critical questions like whether to post data in a raw form or to compress it first, evaluating the cost-benefit of each approach. The insights we gained were valuable not just for Zircuit but for the broader Ethereum community as well, as we shared our findings through these grants.
How does Zircuit view the competition between Ethereum and Solana?
Colin:
In the Asian community, especially with Ethereum’s price not performing well lately, there’s frequent comparison between Ethereum and Solana. Multicoin Capital and others often weigh them against each other. I think your team definitely leans toward supporting Ethereum. How do you view the competition between Ethereum and Solana?
Angel:
For us, since we’re an Ethereum roll-up, our focus on Ethereum is straightforward. From the start, Zircuit was committed to building within the Ethereum ecosystem. However, we’re also interested in connecting with other ecosystems, like Solana. For example, we’ve been in touch with some Solana staking partners and may integrate that into our staking program. In the future, I think there are plenty of possibilities, such as collaborating with projects from other ecosystems or working with bridges to connect Ethereum and Solana. We’re open-minded and definitely happy to see Solana’s growth.
Martin:
I’ll add to that. We actively chose to be part of the Ethereum ecosystem, with Ethereum as our L1, and we’re focused on scaling it. The Ethereum developer landscape is robust, and by providing a chain that uses the same tools, environment, and execution model, we make it easier for developers to join us without facing a steep learning curve.
At the same time, since Zircuit’s inception, we’ve also worked with ecosystems outside of Ethereum. For instance, we integrated Bitcoin restaking platforms into our staking program to offer user incentives. While we are firmly embedded in Ethereum and believe in its future, we also recognize that we’re in a multi-chain world, which includes not only Ethereum L2s and possibly L3s but also chains like Bitcoin and Solana. As Angel mentioned, we’re excited about bridging gaps and creating opportunities for users to leverage their capital across different ecosystems.
Can you explain Zircuit’s hybrid architecture and how it compares to OP Rollup and ZK Rollup?
Colin:
Could you briefly explain the hybrid architecture currently adopted by Zircuit and its differences and advantages compared to the OP Rollup and ZK Rollup?
Martin:
Absolutely. So, we have two main types of roll-ups: optimistic and zero-knowledge. Optimistic roll-ups work by rolling up the state and giving users a window to challenge that state if they suspect any inconsistency. There’s a strong framework for optimistic roll-ups called OP Stack. Building a roll-up involves more than just the roll-up mechanism itself; you need a sequencer, data posting components, smart contracts, bridges, execution layers, and more. OP Stack provides most of these components in a templated form, giving developers a good starting point.
However, as we wanted to build a zero-knowledge roll-up rather than an optimistic one, OP Stack wasn’t fully compatible out of the box. So, we removed all components related to the optimistic model and replaced them with the machinery and services required for zero-knowledge functionality. This is how we arrived at our hybrid architecture. From the user’s perspective, it operates as a full zero-knowledge roll-up, but it’s built in a slightly hybrid way.
What we and our community gain from this is the robustness of the OP Stack framework. We could have built everything from scratch, but by using OP Stack, we leverage years of testing and reliability proven by other chains. In software engineering, having a thoroughly tested and trusted base is invaluable. This way, we benefit from OP Stack’s community of developers, who are constantly finding and fixing bugs, which we can immediately merge into our codebase.
As Ethereum itself undergoes periodic upgrades (like the expected “Petrus” upgrade in early 2025), our alignment with OP Stack allows us to benefit from those improvements. Because we’re building on the same foundation, we can easily adapt to Ethereum’s updates, ensuring our roll-up stays compatible. That said, whenever OP Stack doesn’t quite meet our needs, we modify it as necessary, so this is a genuinely hybrid approach.
SLS is central to your project. Could you elaborate on how it works and address potential concerns about transaction censorship?
Colin:
The SLS (Sequencer-Level Security) is a key feature of your project, and it’s connected to AI, which is a major topic in the crypto industry now. However, there are concerns that SLS could block certain transactions. Could you explain how this feature works and address these concerns?
Martin:
Let me first explain what SLS is, and then I’ll address the concerns. In Zircuit, when a transaction arrives, we don’t simply place it into a block and add it to the chain like other networks. Instead, we actively analyze whether the transaction could potentially harm the chain or trigger an attack. Every transaction is first assessed by an AI module within the SLS system, which determines whether it’s malicious. This AI is quite advanced, partly because we’re part of the Ethereum ecosystem. Zircuit is a relatively young chain, with our mainnet launched just this summer. You might wonder how we’ve trained our AI model to identify malicious transactions given our limited history. Here, Ethereum’s rich ecosystem helped immensely, as we were able to analyze data from other EVM-compatible chains to distinguish between normal and malicious transactions. This allowed us to train our AI model effectively.
If the AI flags a transaction as malicious, we place it in quarantine. This quarantine mechanism allows us to assess whether there’s a vulnerability in a protocol on Zircuit, giving us or the community time to pause or fix the protocol if necessary, or at least to alert users about the issue.
One significant advantage here is that we can precisely study flagged transactions to understand the exploit or vulnerability in detail, which can be more effective than traditional smart contract audits. With audits, the quality of the review depends on the auditors’ expertise and imagination. In contrast, our model allows for proactive security, as it aims to prevent attacks before they occur, which is vital since blockchain hacks can’t be undone.
Now, regarding concerns about transaction censorship: the impact on user experience largely depends on the false positive rate of the AI model. If the model mistakenly flags benign transactions as malicious, that would lead to a poor experience. However, we’ve been running our mainnet for about 3–4 months and our testnet for nearly a year, with millions of transactions processed. So far, there hasn’t been a single false positive. Benign transactions are typically straightforward and easily distinguishable from those associated with hacks. Based on our testing, the model’s accuracy exceeds 99.5%, meaning legitimate transactions are rarely flagged.
In cases where a legitimate transaction is mistakenly quarantined, we have mechanisms in place to allow for its release. Transactions in quarantine are manually reviewed, and users can choose to cancel the transaction or retry it later if needed. Additionally, everything related to SLS is transparent and visible on-chain, so users can monitor it. If users ever feel that SLS is censoring transactions unfairly, they have the freedom to withdraw and transact elsewhere.
So far, our community has embraced the benefits, recognizing the security SLS provides. It’s a safeguard, especially in situations where users need protection against potential vulnerabilities.
When will the full mainnet launch, and are there any token or airdrop plans? Could you share more about future incentives?
Colin:
So, the next question is, when can we expect the mainnet to launch fully? Are there any token plans or airdrop plans? We know Zircuit has a Build to Earn program, and many in the Asian community are participating. Could you share more information about potential future airdrops?
Martin:
Yes, the mainnet question is easy to answer — our mainnet is already live. We launched it in a private mode for our partners in early July, giving them a month to test the network and deploy their systems. In early August, we opened the network for public access. You can find information on how to connect, how the bridge works, and more on docs.zircuit.com. So, mainnet is already live and fully accessible.
In the early days of Zircuit, we introduced two main programs. One is a restaking program for liquid staking tokens, and the other is the Build to Earn program you mentioned. The Build to Earn program is still active and is designed to attract builders. We provide a stable, secure platform where developers can deploy and build exciting projects on Zircuit. Builders who participate can earn points, which can be awarded based on the project’s contributions to the ecosystem. They can apply for this on build.zircuit.com, where our ecosystem team connects with them to assess how we can support their work and potentially reward them with points.
There’s also the staking program. To cultivate a vibrant DeFi ecosystem, we need liquidity, so we launched a staking program on L1 back in March, allowing users to deposit liquid staking assets — Ether, Bitcoin, and potentially more assets in the future. These assets are being gradually migrated to L2, where they’re collected in our Central Liquidity Hub, which serves as a liquidity source for DeFi projects launching on Zircuit. So far, the Build to Earn program has received over 1,600 project submissions, with around 80 projects actively building on Zircuit. A few examples are Ocelex, a decentralized exchange, and Elara, a native lending platform.
Now, about token incentives. Zircuit does have a governance token, which is already deployed on Ethereum mainnet. Users who earned points through participation in staking, building, or other reward campaigns can claim their tokens on Zircuit. However, these tokens are currently locked and non-transferable but will become transferable in the future. We’ll continue to roll out more incentive campaigns, with updates posted on our Twitter, Discord, and website. You’ll find information about possible airdrops not only from us but also from partner projects building on Zircuit. So, stay tuned to Zircuit L2 on Twitter or X, and keep an eye on our announcements.
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