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Vitalik Buterin Backs ZKsync: Driving Institutional-Level Ethereum Scalability

Vitalik Buterin Backs ZKsync: Driving Institutional-Level Ethereum Scalability

Bitget-RWA2025/12/10 11:52
By: Bitget-RWA
- Vitalik Buterin's endorsement of ZKsync's Atlas upgrade boosts Ethereum's L2 scalability and institutional adoption. - ZKsync's 15,000 TPS and $15B in institutional investments highlight its institutional-grade performance and token economics. - Enterprise partnerships and RWA projects position ZKsync as a cost-effective alternative to Arbitrum, challenging its 45% TVL dominance. - Planned Fusaka upgrade and Buterin's ZK advocacy aim to enhance Ethereum's scalability and value capture without compromisin

Vitalik Buterin’s Support Sparks Major Shift in Ethereum Layer 2 Landscape

Vitalik Buterin’s recent public backing of ZKsync’s Atlas upgrade has marked a significant turning point for Ethereum’s Layer 2 (L2) ecosystem. As one of Ethereum’s co-founders, Buterin’s approval of ZKsync’s zero-knowledge (ZK) technology highlights a growing industry belief that scalable, privacy-focused solutions are essential for Ethereum’s continued leadership in blockchain innovation. This overview explores how ZKsync’s technical progress, institutional momentum, and competitive strategy may redefine Ethereum’s value in the years ahead.

ZKsync Atlas: Redefining Scalability and Institutional Engagement

Launched in early 2025, the Atlas upgrade has dramatically improved ZKsync’s scalability and interoperability. Reports from Bitget indicate that Atlas now supports up to 15,000 transactions per second with almost immediate finality—a threefold increase over previous versions. This performance leap is powered by the ZK Stack framework, which enables seamless liquidity movement between Ethereum’s mainnet and its L2, reducing fragmentation and boosting cross-chain operations.

ZKsync Atlas Upgrade

The institutional response has been robust. According to Phemex, ZKsync attracted $15 billion in institutional capital in 2025 after Buterin’s endorsement, with the ZK token price climbing 50%. This surge reflects trust in ZKsync’s revamped token model, which shifted the ZK token from a governance role to a mechanism for value accrual through buybacks and burns. Such changes resonate with institutional investors seeking utility-driven digital assets, a trend gaining traction across the crypto sector.

Enterprise Adoption and Expanding Partnerships

ZKsync’s appeal to institutions is further strengthened by its expanding enterprise network. Notable real-world integrations include Deutsche Bank’s Project Dama 2 and Tradable’s adoption of ZKsync, demonstrating the platform’s suitability for asset tokenization and compliance-oriented solutions. By the end of 2024, ZKsync had processed 12 billion transactions and supported 28 real-world asset projects with a combined $1.9 billion in total value locked (TVL), proving its ability to scale beyond DeFi into sectors like gaming, artificial intelligence, and corporate finance.

Innovations such as gasless transactions and a Single Sign-On (SSO) toolkit have lowered barriers for both institutional and retail users. With transaction fees as low as $0.01, ZKsync presents a cost-effective alternative to rivals like Arbitrum, which currently holds 45% of the total value locked in Ethereum’s L2 ecosystem.

Competitive Landscape and Ethereum’s Value Retention

Although ZKsync commands a 15% share of TVL—less than Arbitrum’s market lead—its emphasis on privacy and interoperability through ZK technology offers a distinct advantage for institutional investors. Analysis from Markets.com suggests that ZKsync’s upcoming Fusaka upgrade, aiming for 30,000 TPS, could further challenge Arbitrum’s dominance by addressing throughput bottlenecks. ZKsync’s long-term vision, including the Elastic Network and BoojumVM initiatives, underscores its commitment to scalability, setting it apart from competitors like Optimism, which focus on roll-up solutions.

Buterin’s endorsement also strengthens Ethereum’s overall value proposition. By mid-August 2025, Ethereum’s price had reached $4,600, with 85% of network activity occurring on L2 platforms. ZKsync’s ability to facilitate smooth liquidity sharing between L1 and L2 enhances Ethereum’s capacity to capture value while scaling, aligning with Buterin’s vision of ZK proofs as foundational for Ethereum’s future—delivering both privacy and security without compromising decentralization.

Obstacles and Future Prospects

Despite these advancements, Ethereum’s L2 ecosystem faces notable challenges. The combined market capitalization of L2 platforms has dropped nearly 90% from its peak, reflecting broader volatility in the crypto markets. ZKsync also experienced a 42% decline in average daily transactions in Q4 2024, though its 97% transaction success rate highlights the platform’s robust infrastructure.

Nevertheless, ZKsync’s strong institutional alliances and ambitious technical roadmap point to ongoing growth. As the Fusaka upgrade approaches and Ethereum’s adoption of real-world assets accelerates, ZKsync is poised to capture a larger portion of the $16.63 billion TVL currently dominated by Arbitrum. This could set off a positive feedback loop: greater L2 adoption eases congestion on Ethereum, reduces transaction costs, and solidifies its status as the premier smart contract platform.

Summary

Vitalik Buterin’s support for ZKsync represents more than just a symbolic gesture—it signals a strategic commitment to ZK-powered scaling as the path forward for Ethereum. By delivering institutional-grade performance, privacy, and interoperability, ZKsync is reshaping how Ethereum captures value, enabling the network to expand without sacrificing security or decentralization. For investors, ZKsync’s technical achievements, evolving tokenomics, and enterprise traction make it a compelling opportunity within Ethereum’s rapidly developing ecosystem.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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Bitget-RWA2025/12/10 21:14

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