Scroll, the largest zero-knowledge (ZK) rollup on Ethereum (ETH) by total value locked (TVL), is set to launch its governance token SCR on October 22, 2024.
Since 2022, Scroll has been quietly developing a layer two (L2) chain that is focused on providing seamless Ethereum compatibility, a highly secure ZK-powered environment and an organic community of developers and users.
In this article, we analyze Scroll, talk about the upcoming SCR token launch and get exclusive insights from developers building on Scroll.
Key Takeaways
- Scroll is launching its governance token SCR to decentralize its network.
- Scroll was the largest ZK rollup in the world in terms of total value locked.
- It is considered one of the most Ethereum-compatible L2 chains.
- Peter Chen, co-founder of lending protocol Rho Markets, said he is bullish due to Scroll’s fast transaction finality.
- As of October 14, SCR token was trading at a pre-market price of $1.16 on Binance which gave SCR a fully diluted valuation of over $1.16 billion.
What Is Scroll?
Scroll is a general-purpose zero-knowledge rollup that is designed to maximize compatibility with the Ethereum Virtual Machine (EVM). Scroll was founded by Ye Zhang, Haichen Shen, and Sandy Peng in 2021.
The trio first connected online on Ethereum research forums and got together to form Scroll. In October 2023, Scroll launched its mainnet.
As of October 14, 2024, Scroll boasted a TVL of $1.46 billion, data from L2Beat showed, making it the largest ZK rollup in the world. Overall, Scroll was the sixth largest Ethereum rollup, behind optimistic rollups such as Arbitrum One (ARB), Base, OP Mainnet (OP), Blast (BLAST) and Mantle (MNT).
Techopedia reached out to Ali Habbabeh, co-founder of incentivized trading platform Kaskade Finance, to ask why developers have flocked to Scroll L2. He said:
“The reason behind us building on Scroll is simply the superior tech and the early adoption Scroll got. Their TVL has been growing since early days in ways we have never seen before. As a volume incentive layer, Kaskade helps networks and projects to gain more liquidity and volume, but that requires some network effect that Scroll did a great job acquiring from day 1.”
Technical Details About Scroll
Let’s dive deep into the technical details and blockchain architecture of Scroll.
Scroll can also be described as a zero-knowledge Ethereum Virtual Machine (zkEVM), which is a software that can execute smart contract transactions and generate ZK proofs in a way that is compatible with the existing Ethereum infrastructure.
The current architecture of Scroll consists of three key infrastructure components:
How Is Scroll Different From Other Ethereum Rollups?
Compatibility
Among the many ZK rollups out there, Scroll is considered one of the most Ethereum-compatible L2 chains in the market.
Scroll’s zkEVM is designed to behave like the EVM as specified in the Ethereum technical paper. The use of Solidity to write smart contracts and the use of a Go-Ethereum (Geth) fork to run its sequencer nodes has made Scroll’s infrastructure highly compatible with that of Ethereum.
This compatibility not only makes it easy for developers to seamlessly migrate their Ethereum-based decentralized applications to Scroll, but it also allows Scroll to inherit any network upgrades and security improvements made to the Ethereum protocol.
Performance
Shorter transaction finality time is one of the most significant advantages of ZK rollups like Scroll over Optimistic rollups.
Optimistic rollups can take as long as seven days to finalize a transaction and make it irreversible. That time is cut short to a few hours in ZK rollups due to verifiable proofs generated by these systems.
We reached out to several Scroll-based projects to hear why they chose to build on Scroll. To this, Peter Chen, co-founder of lending protocol Rho Markets, told Techopedia:
“Other Rollups are taking days to weeks to settle a tx (transaction) on L2 on L1, but with Scroll’s ZK technology, it only needs 2 hours. And according to Sandy’s interview, it will become minutes, or even seconds later this year, this is why (I am) bullish on Scroll.”
Indeed, Scroll co-founder Sandy Peng, in an interview with Nasdaq, said that transaction finality at Scroll is expected to fall within the one-minute mark by the end of the year.
She went on to state that Scroll will see a “sub-second finality timeframe” in the future.
As of today, Scroll occupies the fastest finality out of any zk-Rollup.
We're pushing this even further by targeting 1-minute-finality on Scroll by the end of 2024.
Catch @sandyzkp's insights in her @nasdaq @TradeTalks interview ⬇️ pic.twitter.com/R1Cet0sqZ4
— Scroll (@Scroll_ZKP) October 7, 2024
Why Is Scroll Launching a Token?
Scroll is launching its governance token SCR to decentralize its network.
A major cause for concern within the L2 sector is the use of centralized sequencers. Leading L2s like Arbitrum, Base and OP Mainnet are operated by a single sequencer node under the control of their core development teams.
In the case of Arbitrum, OffChain Labs has control over the only sequencer in the network. Coinbase runs the sole sequencer node on Base L2 while the Optimism Foundation does so on the OP Mainnet.
Similarly, Scroll is run by a centralized sequencer.
According to L2Beat, Scroll’s centralized operator has the power to censor transactions, disable token withdrawals, and front-run user transactions for maximal extractable value (MEV).
Additionally, having only one sequencer node exposes an L2 chain to downtimes, as the rollup will stop processing transactions if the centralized sequencer node goes down.
With the launch of the SCR governance token, Scroll aims to introduce decentralized governance and diversify its sequencer and prover nodes.
All You Need to Know about SCR Token Airdrop
The SCR crypto token will be airdropped to its community on October 22, 2024. The SCR token also conducted a Binance Launchpool program.
Scroll’s SCR Binance Launchpool Program
Let’s first talk about the SCR token launch via Binance Launchpool.
Over 55 million SCR tokens (or 5.5% of the total supply) are allocated to the SCR Binance Launchpool.
In order to receive SCR token airdrop, users have to lock BNB and FDUSD tokens over two days, starting October 9, 2024.
The SCR token will be available for trading via Binance’s pre-market listing from October 11 onwards.
As of October 14, the SCR token was trading at a pre-market price of $1.16 on the Binance crypto exchange, giving the crypto a fully diluted valuation of over $1.16 billion.
SCR Airdrop to Early Onchain Users
SCR tokens will be airdropped to users who have actively engaged with the Scroll ecosystem.
70 million SCR tokens (or 7% of total SCR supply) are allocated for the first SCR token airdrop. Users will be allowed to claim their airdropped tokens on October 22, 2024.
The airdrop snapshot date is set for October 19.
SCR Tokenomics & Distribution Plan
Scroll’s SCR token will have a total supply of 1 billion tokens. Here is a table showing how the Scroll crypto token will be distributed:
Recipient | Allocation in % of total supply | Conditions |
---|---|---|
Scroll Core Contributors – Team, Future Team, and Advisors | 23% | Subjected to a vesting schedule based on the service period.
Vested tokens to unlock after the first year and will be fully unlocked by the end of the fourth year. |
Ecosystem & Growth allocation | 19.5% | 25 million SCR available at launch for distribution to ecosystem partners.
Rest will be evenly unlocked over the next four years. |
Investors | 17% | Tokens to unlock after the first year and will be fully unlocked by the end of the fourth year. |
Scroll Foundation Treasury | 10% | 20 million SCR will be unlocked at the launch.
80 million SCR will unlock over the next four years. |
Scroll DAO Treasury | 10% | 20 million SCR tokens will be unlocked at launch.
80 million SCR tokens will unlock over the next four years. |
Future airdrops | 8% | To take place over the next 12 to 18 months from October 2024. |
First SCR airdrop | 7% | Airdrop claims will begin on October 22. |
Binance Launchpool | 5.5% | Lock BNB and FDUSD tokens over two days, starting October 9. |
The Bottom Line
Scroll’s developer-centric approach to providing seamless Ethereum compatibility has helped its community grow organically. According to Electric Capital, Scroll has the eighth-largest developer community among all blockchains worldwide.
Now, with the launch of the SCR token, we can expect the growth of Scroll’s ecosystem to accelerate, supported by the capital that token generation events bring.
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References
- L2BEAT – The state of the layer two ecosystem (L2BEAT)
- zk, zkVM, zkEVM and their Future — msfew (Mirror)
- Scroll on X (X)
- Scroll – L2BEAT (L2BEAT)
- Developer Report: Analysis of Open-Source Crypto Developers by Electric Capital (Developer Report)