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zkSync Token Sales Raises $1.7 Million but Funds Stuck in Smart Contracts: What Went Wrong?

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On April 7th, according to Eden Au, the research director of TheBlock, a project on zkSync raised 921 ETH ($1.7 million) through token sales, but the funds will

zkSync Token Sales Raises $1.7 Million but Funds Stuck in Smart Contracts: What Went Wrong?

On April 7th, according to Eden Au, the research director of TheBlock, a project on zkSync raised 921 ETH ($1.7 million) through token sales, but the funds will be permanently stuck in smart contracts. The transfer() function is applicable to Ethereum and other EVM chains, but not to zkSync. In response, zkSync stated that it will not get stuck in the smart contract and is working with the team to help them solve the problem. A detailed update will be released later.

ZkSync’s previous project included the 921ETH token sales financing card in the contract, and zkSync is helping to resolve the issue

Introduction

On April 7th, TheBlock reported that zkSync raised 921 ETH ($1.7 million) through token sales, but the funds got stuck in smart contracts. Being a renowned project in the blockchain ecosystem, the incident caused quite a stir within the community, and many were left wondering what went wrong. In this article, we will delve deeper into the matter, investigate the primary cause behind this issue, and discuss the possible solutions.

The Problem with the transfer() function

Firstly, it’s essential to understand that the transfer() function is not applicable to zkSync or any other layer 2 scaling solutions on Ethereum or EVM chains. The transfer() function is designed for the base layer of Ethereum, where the transactions are executed on-chain. However, in zkSync or other layer 2 solutions, transactions occur off-chain, which means that they don’t get verified by every node on the network, as is the case with Ethereum. This difference in design poses a challenge for zkSync; it can’t utilize the transfer() function.

Permanently Stuck Funds in Smart Contracts

Due to the inability to utilize the transfer() function, the funds amassed from the token sale got stuck in smart contracts. Smart contracts are self-executing programs that run on the blockchain, and once the code gets deployed, it’s immutable. Hence, the funds are trapped within them. These contracts operate in a manner that automatically triggers when certain conditions are met, and without proper intervention, funds can’t be released from the contract.

zkSync’s Response

In response to the issue, zkSync announced that it’s working with the team to help address the problem, and a detailed update will be released shortly. Eden Au, the research director of TheBlock, reported that zkSync contacted them and explained that the funds won’t be permanently stuck in smart contracts. Hence, there is still hope that the funds can be retrieved without much loss.

The Way Forward

The incident highlights the importance of ensuring that every aspect of a project gets well-thought-out before being made available for public use. zkSync is a scalable solution to the Ethereum’s network congestion problems, but without proper planning, things can go wrong. The issue can be addressed by developing more specific tools for layer 2 scaling solutions that have different characteristics than Ethereum’s base layer.
Moreover, the incident once again underlines the importance of auditing smart contracts to ensure that they are robust and secure. Even though smart contracts are immutable, there are certain instances where an upgrade in the contract can be done to resolve issues. Hence, proper auditing should be part of the development process to prevent issues like the zkSync funds being stuck in smart contracts.

Conclusion

The incident with zkSync highlights the need for more specialized tools and specific development for off-chain solutions. The goal is to ensure that every aspect of a project is well thought out before it is made publicly available. Additionally, the importance of auditing smart contracts cannot be overstated. Smart contracts are immutable, and to avoid being trapped in them, auditing should be an integral part of the development process.

FAQs:

Q1. What is zkSync?

zkSync is a scaling solution for Ethereum that enables fast and secure token transfers while operating off-chain.

Q2. Can the funds stuck in smart contracts be retrieved?

zkSync has said that it is working on resolving the issue, and a detailed update will be provided soon.

Q3. Why is smart contract auditing essential?

Smart contracts are immutable programs that operate on the blockchain. Auditing ensures that the contract is secure and can be trusted to function as intended without any vulnerabilities.
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