Early Whales Have 32% of Their Holdings on zkSync: Nansen Research

  • Ethereum and stablecoin USDC are the most widely held.
  • The report highlights the concentration of LP activity on DEX, calling for caution.

A report from the data analytic firm Nansen Research has captured the behavior of early whales on zkSync, a Layer 2 scaling solution for Ethereum that uses zero-knowledge proofs to achieve high throughput and low fees.

According to the report, these early adopters have an average of 32% of their holdings on zkSync, indicating a significant amount of idle capital on the platform. The holdings mainly comprise spot Ethereum token (ETH), stablecoin USDC, and a distant third of MUTE, a new privacy-focused cryptocurrency.

The report further highlights that most of their activity on zkSync is concentrated around decentralized exchanges (DEX), especially liquidity providers (LPs) across SyncSwap, Izumi Finance, Mute, and Velocorexyz. Additionally, it notes that most LPs are in the ETH/USDC pools. At the same time, Pool 2s and altcoins (alts) make up a very negligible position, “indicating a lack of interest in zkSync alts.”

The data analytic firm further stressed the presence of a considerable idle capital waiting to be deployed, given the large number of spot holdings in ETH and USDC. It advises keeping track of new product launches, such as upcoming derivatives apps like UniDex Finance and Derivio, which are currently in testnet.

While the report notes the potential for profitable investment opportunities in the near term, it also warns users to exercise caution when interacting with protocols on zkSync. “There have been many rug pulls on zkSync,” the analytic noted, advising the crypto community to “always exercise caution before interacting with any protocols.”

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