The Protocol: Another Episode in the Layer-2 Teams Drama

Ethereum’s

layer-2
teams
are
butting
heads
once
again.
This
time,
major
figures
in
the
space
are
condemning
Matter
Labs,
the
creator
of
zkSync,
over
its
decision
to
trademark
the
acronym
“ZK,”
which
is
shorthand
for
“zero-knowledge”
cryptography,
the
core
technology
underlying
zkSync
and
a
plethora
of
other
blockchain
projects.

Matter
Labs
claimed
it
made
the
move
to
protect
users.
Leaders
from
Polygon
and
Starkware–competitors
in
the
layer-2
space–disagreed,
arguing
that
trademarking
public
goods
does
not
serve
the
interests
of
the
Ethereum
ecosystem.

In
this
week’s
newsletter,
we’ll
recap
this
latest
episode
in
the
layer-2
saga
and
a
slate
of
other
industry
updates
that
you
won’t
want
to
miss.

This
article
is
featured
in
the
latest
issue
of


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Protocol,
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weekly
newsletter
exploring
the
tech
behind
crypto,
one
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ZK
Trademark
Filing
Rile
Layer
2
Teams:
Matter
Labs,
the
main
development
firm
behind
the
zkSync
Era
blockchain,
received
major
blowback
from
fellow
Ethereum
layer-2
teams
after
it
unveiled
plans
to
trademark
the
term
“ZK.”
The
week-long
clash
resulted
in
Matter
Labs
withdrawing

its
trademark
application,
which
it
initially
said
was
necessary
to
protect
the
Ethereum
community
against
similarly-named
projects
and
token
tickers.
ZK,
or
zero-knowledge,
is
a
type
of
cryptography
used
by
certain
layer-2
rollups
and
other
blockchain
projects
to
quickly
prove
that
transaction
details
are
true
while
keeping
other
details
private.
The
tech
is
closely
associated
with
attempts
to
scale
the
Ethereum
blockchain.
Layer-2
networks
like
Polygon,
StarkNet
and
zkSync
all
use
ZK
proofs
to
help
provide
users
with
quicker
and
cheaper
transactions.
Matter
Labs’
move
to
trademark
ZK
came
after
a
tiff
with
Polyhedra,
a
blockchain
project
that
used
“ZK”
as
the
ticker
for
its
token.
Matter
Labs
has
been
preparing
for
its
own

highly-anticipated
token
airdrop
and
planned
to
take
the
“ZK”
ticker
for
itself.
(Polyhedra
ultimately
decided
to
rebrand
its
token
to

“ZKJ,”
according
to
reporting
from
The
Block.)
When
Matter
Labs
initially
revealed
its
plan
to
trademark
ZK,
it
ignited
an
ecosystem-wide
outcry.
Given
that
ZK
technology—and
the
term
itself—are
used
by
many
teams
across
the
industry,
the
trademark
filing
was
seen
as
an
attempt
by
a
single
company
to
seize
ownership
over
a
“public
good.”
More
broadly,
this
was
viewed
as
an
attack
on
crypto’s
open-source
and
collaborative

ethos.
In
a
statement
shared
with
CoinDesk,
StarkWare
CEO
Eli
Ben-Sasson
called
the
move
“an
absurd
IP-grab.”
Polygon
Chief
Legal
Officer
Rebecca
Rettig

wrote
on
X
that
trademarking
a
term
is
to
“protect
a
company’s
brand”
rather
than
the
wider
crypto
community.

This
isn’t
the
first
time
that
Matter
Labs
has
found
itself
in
hot
water
with
its
competitors.
In
August
2023,
the
Polygon
team
went
on

a
media
blitz
with
the
claim
that
Matter
Labs
had

copied
its
Plonky-2
software
system
without
proper
attribution.
Leaders
from
other
teams,
like
Starkware,
also
weighed
in
at
the
time,
expressing
their
disappointment
with
Matter
Labs.
(Gluchowski

denied
the
claims
of
copying
but
said
his
team
“could
have
done
better”
by
providing
clearer
attribution
to
other
teams’
open-source
code.)
Polygon
co-founder
Sandeep
Nailwal
seemed
to
reference
the
debacle
when
he
weighed
in
on
the
earlier
dispute,
saying
in
a
statement
last
week
that
“zkSync
has
repeatedly
acted
contrary
to
the
Web3
ethos,
despite
consistently
signaling
those
same
values.
We
believe
that
if
we
do
not
publicly
address
this
behavior,
it
will
persist
and
potentially
worsen.”
Alex
Gluchowski,
the
CEO
of
Matter
Labs,
initially
dismissed
the
complaints,
sharing
that
his
intention
with
the
trademark
application
was
to
protect
users
and
adding
that
Matter
Labs
would
eventually
move
to
share
the
trademark
with
a
yet-to-exist
consortium
of
ecosystem
stakeholders.
Three
days
later,
however,
Matter
Labs
opted
to

walk
back
on
its
trademark
efforts
entirely.

Consensus
2024
Debrief:
Last
week,
CoinDesk’s
10th
annual
Consensus
festival
took
place
in
Austin,
Texas,
and
what
a
whirlwind
it
was!
This
year,
the
conference
had
a
pronounced
focus
on
policy
and
regulation.
Last
month’s
surprise
ether
(ETH)
ETF
approval,
the
bipartisan
vote
to
repeal
the
U.S.
Securities
and
Exchange
Commission’s
(SEC)

crypto
accounting
policy
(SAB121),
and

the
wider
Democratic
softening
towards
crypto
in
the
past
few
weeks
were
on
everyone’s
minds.
Independent
U.S.
presidential
candidate
Robert
F.
Kennedy
Jr.

stopped
by
to
share
his
thoughts
on
crypto
policy,
and
he
also
gave
his
opinion
on
former
President
Donald
J.
Trump’s
guilty
verdict
in
his
hush-money
trial.
Another
trend
at
the
center
of
Consensus
was
AI
and
its
intersection
with
Blockchain.
Consensus
even
dedicated
an
entire
day
(May
31)
to
AI
discussions
on
the
Gen
C
Stage.
And
finally,
vibe
checks
were
all
around,
with
many
still
figuring
out
if
crypto
is
on
the
cusp
of
another
bear
or
bull
run.
The
takeaway:

it
isn’t
exactly
clear.

Top
picks
of
the
past
week
from


our
Protocol
Village

column,
highlighting
key
blockchain
tech
upgrades
and
news.

Bitcoin
scaling
continues
to
be
a
major
focus
for
the
oldest
blockchain
ecosystem,
and
now
the
team
behind
Bitcoin
layer-2
protocol
Ark
has
created
a
new
company
that
will
focus
on
cheap
and
fast
payments.

Ark
Labs,
the
new
company,
will
compete
with
Bitcoin’s
Lightning
Network
with
its
own
solution
for
scaling
the
blockchain’s
transaction
capacity.

The
company
shared
that
it
will
pursue
scalability
by
developing
“an
open
implementation
of
the
Ark
Protocol”
and
“building
services
for
users,”
CoinDesk’s

Jamie
Crawley
writes.

The
open
implementation
of
Ark
is
expected
to
happen
in
2024.

Read
the
full
post
by
Jamie
Crawley
here

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