As the largest fintech hub in the EU, Vilnius provided an ideal backdrop for Cyberscope's engagement. Andreas Mavrikos, our Business Development Manager, was at the forefront, and contributed as a guest speaker.



Taking the stage, Andreas Mavrikos delved into the critical topic, "How the Crypto Industry Could Have Saved $1B from Hacks This Year." His insights shed light on robust security measures crucial for safeguarding assets in the crypto industry.



The conference drew global participants, including builders, investors, legal advisors, and tech leaders. Discussions encompassed decentralized finances, metaverse, crypto economy, and various pertinent topics.



Vilnius, as the leading fintech hub in the EU and the 10th globally, underscored the city's significance in discussions on the future of financial technologies.



Against the backdrop of global uncertainties, Cyberscope participated actively and contributed significantly, reinforcing our commitment to cybersecurity excellence. Our involvement in such forums continues to shape the digital future, ensuring robust security measures in the ever-evolving landscape of the WEB3 economy. You can watch [a recap of the event](https://www.youtube.com/watch?v=yq9VKAh__uU) on our YouTube channel.

Vilnius recently hosted the "Web3 | Impact the Economy" conference, and Cyberscope, positioned as a cybersecurity leader, played a pivotal role in shaping the discourse on the future of the WEB3 economy.

Cyberscope Attends Web3 | Impact the Economy 2023

Smart contracts revolutionized the blockchain industry by bringing a significant shift in how agreements are conceptualized and carried out. Ethereum introduced smart contracts to ensure the creation of programs on blockchain networks, signaling the start of smart contracts in blockchain application development services. Smart contracts have facilitated the creation of dApps for various purposes, broadening the application of blockchain technology beyond decentralized financial dealings.

In recent years, many platforms with unique features and abilities have emerged to support smart contracts on the blockchain. The connectivity between the blockchain and smart contracts has helped to promote creativity in the web3 and blockchain sectors. Let's delve deeper into how smart contracts affect blockchain app development services.

## The Definition and Source of Smart Contracts

Smart contracts are agreements that automatically execute when conditions are met, with contract terms embedded in code. For transparency and immutability, the code is stored and copied across a decentralized blockchain network. The contract automatically enforces predefined conditions to enable secure and trustless transactions. Due to advancements in blockchain technology, smart contracts have made significant progress since computer scientist Nick Szabo first introduced the concept in the 1990s.

Nick Szabo originally introduced the concept of self-executing contracts written in computer code in his revolutionary publication from 1994. This is the birthplace of smart contracts. Smart contracts only gained popularity once blockchain technology became widespread, especially after Vitalik Buterin introduced Ethereum in 2015. Ethereum's programmable blockchain opened the door to a fresh era of digital agreements and automated transactions, allowing developers to create DApps and utilize smart contracts.\
\
Read also:[Web 3.0 Penetration Testing: Top 5 Things You Need To Know](https://www.cyberscope.io/blog/web-3-0-penetration-testing-top-5-things-you-need-to-know)

## How Do Smart Contracts Work?

Essentially, smart contracts are the digital versions of traditional legal contracts that operate automatically. Software code is utilized to automate and execute the specified terms and conditions of an agreement. These agreements are secure since they are coded and stored on a transparent, secure, decentralized blockchain network.

Smart contracts are autonomous programs that execute actions once specific conditions are met. Examine a blockchain application designed for the supply chain. A smart contract can automatically trigger payment after receiving a delivery confirmation, eliminating the necessity for human intervention or third-party involvement.

It is fascinating to consider that the use of smart contracts reduces the necessity for traditional intermediaries such as banks or lawyers, thus reducing the risks of fraud, errors, or non-adherence. The popularity of these intelligent contracts grew mostly due to Ethereum's blockchain technology, offering a robust base for their development and application in sectors like supply chain management, real estate, and finance.

The consistent duplication of smart contracts on different nodes in a blockchain network, along with their predictable behavior, guarantees clear and coordinated execution of agreements for all participants. Despite the numerous advantages, one must remember that thorough testing and [auditing](https://www.cyberscope.io/smart-contract-audit) of smart contract code is essential before deployment to prevent any potential issues or vulnerabilities due to their immutable nature.

![Blockchain, th revolutionization of the finance industry](https://firebasestorage.googleapis.com/v0/b/cyberscope-90197.appspot.com/o/blog%2Fbucket%2F1733407116667-image1.jpg?alt=media)



## Why are Smart Contracts Important for Blockchain?



Blockchain technology is revolutionizing the finance industry by significantly impacting how it is being transformed. Smart contracts help expand the use of blockchain technology by eliminating intermediaries and promoting direct exchanges between peers. The focus of evaluating smart contracts in the blockchain is their ability to establish secure systems and improve transparency in transactions.

Once a smart contract is enrolled in the network, it is securely logged with the assurance of its unchangeable nature. Moreover, the decentralization of smart contracts ensures safety against attacks on individual weak spots. It also ensures freedom from concerns about system failures caused by security issues.

## How Do Smart Contracts Work in Blockchain Development?

Blockchain operates with smart contracts.

Smart contracts utilize code that self-executes, as opposed to traditional contracts. Digital contracts are created to execute pre-determined tasks automatically once certain conditions are satisfied. Automating smart contracts ensures the development process is efficient and reduces the chances of conflicts and errors.

Smart contracts can greatly transform blockchain technology by enhancing its reliability and effectiveness. Once activated, smart contracts can operate autonomously, eliminating the necessity of intermediaries. Developing smart contracts on the blockchain offers the main advantage of reducing unnecessary delays associated with traditional contract enforcement. In addition, smart contracts execute the planned transactions only if specific conditions are fulfilled. Consequently, they can provide a secure and reliable base for anyone involved in the transaction.

Quick Link:[Securing the Future: Cyber Threats in the Age of Web3](https://www.cyberscope.io/blog/securing-the-future-cyber-threats-in-the-age-of-web3)

## Smart Contracts in Blockchain Application Development

Smart contracts are digital protocols stored on a blockchain that aim to automate, verify, and enforce contract terms. Smart contracts, the key component of blockchain technology, completely transform the concept of contracts with their included automation capabilities.

The system becomes more independent when smart contract terms are created and implemented on the blockchain. When the specified conditions are fulfilled, the contract will execute predetermined provisions autonomously. This key trait sets smart contract leagues apart from traditional ones that may be costly, time-consuming, and susceptible to manipulation. On the other hand, once smart contracts are put into effect, they cannot be altered, ensuring that the contract terms are followed even without a trustworthy third party, thus reducing the chances of fraud and disagreements.

A grasp of blockchain systems, programming languages, and legal jargon is crucial for developing smart contracts. Blockchain experts who specialize in creating smart contracts are crucial to ensuring that the code accurately represents the contractual terms and operates seamlessly within the current blockchain system.

Platforms like Ethereum, designed for executing smart contracts on the blockchain, are widely used for implementing smart contracts. Developers now have a selection of platforms available to meet their specific needs, allowing smart contracts to play a vital role in digital contracts and impact future industry transactions.

![Your Ideal Blockchain Development Company](https://firebasestorage.googleapis.com/v0/b/cyberscope-90197.appspot.com/o/blog%2Fbucket%2F1733407201755-image2.jpg?alt=media)

## Your Ideal Blockchain Development Company

Cyberscope is a top-tier blockchain development company, delivering comprehensive, end-to-end blockchain solutions worldwide. With a team of expert blockchain developers and smart contract specialists, we provide tailored services that address the specific needs of businesses across various sectors.

At Cyberscope, we recognize the essential role of smart contracts in blockchain projects. These self-executing contracts automate and secure agreements, bringing transparency, security, and efficiency to business operations.

Our dedicated R&D team keeps pace with the latest smart contract advancements, ensuring our clients receive the most innovative solutions. From developing decentralized applications and custom smart contracts to integrating blockchain with existing systems, Cyberscope is prepared to support all your blockchain needs. Our expertise and commitment to excellence make us the ideal partner for businesses aiming to leverage smart contracts in their blockchain journey.

## Conclusion 

Since they started the trend of blockchain programming, smart contracts are essential in the development of blockchain technology. Smart contracts have allowed blockchain to emerge as a major player in the web3 environment. Thanks to the efficiency, security, and automation features of smart contracts, it is possible to create blockchain solutions tailored to unique scenarios.

Exploring new use cases in different sectors will reveal how smart contracts can enhance creativity. Moreover, smart contracts play a beneficial role in setting the foundation for the advancement of web3 and are essential for generating unique assets such as NFTs.

Smart contracts revolutionize blockchain with automation, transparency, and efficiency.

Smart Contracts in Modern Blockchain App Development

## What is Drainer-as-a-Service (DaaS)?

A crypto drainer is a phishing tool crafted specifically for the web3 ecosystem. Rather than stealing passwords and usernames, drainer operators typically pretend to be web3 projects, convincing victims to link their crypto wallets to the drainer and authorize transactions that give the operator access to the wallet's funds. If they succeed, drainers can immediately take users' money directly. Drain operators frequently advertise their fraudulent web3 platforms in Discord groups and on hacked social media profiles.

## An overview of DaaS and Crypto Drainers

A crypto drainer is a harmful tool or script created to move cryptocurrency from a victim's wallet to one controlled by an attacker. Drainers began targeting MetaMask in approximately 2021, when they were publicly advertised in secretive online platforms and markets.

However, there are various forms in which drainers and drainer-style attacks can manifest. Malicious smart contracts could have concealed features that activate unauthorized transfers. Alternative types of drains could utilise NFTs or token-triggered schemes to create counterfeit assets, enabling the covert and unauthorized exchange of cryptocurrencies.

Crypto drainers are frequently accessed via a Drainer-as-a-Service approach, where DaaS providers supply cybercriminals with software and assistance in exchange for a portion of the looted money. Some common services provided by a contemporary DaaS platform are

* Turnkey crypto-draining scripts
* Customizable smart contracts
* Phishing kits and social engineering services
* Premium OPSEC or security and anonymity services
* Integration assistance and mixing/obfuscation
* Ongoing updates, maintenance and technical support.

Cryptocurrency draining scripts that are turnkey or ready-to-use are utilized to automate the process of draining cryptocurrency from specific wallets. They are designed to be easy to comprehend and implement, without the need for much prior experience.

See also:[What Is Consensus in Blockchain?](https://www.cyberscope.io/blog/what-is-consensus-in-blockchain)

![The Effects of Crypto Drainers](https://firebasestorage.googleapis.com/v0/b/cyberscope-90197.appspot.com/o/blog%2Fbucket%2F1730897387212-image2.png?alt=media)

## The Effects of Crypto Drainers

Tracking the overall amount stolen by crypto drainer scams is challenging due to underreporting. Nevertheless, we can examine the behaviors of the scammers that were first identified by Chainalysis clients as phishing scams and those with comparable actions stored in our records.

We can observe that the quarterly growth rate in value taken by these burglars has surpassed even the value taken by ransomware, a type of crime that we have noticed to be rapidly increasing in recent years.

Also, during 2022 and 2023, most of the stolen funds by drainers were transferred to different DeFi projects like decentralized exchanges, bridges, and swap services as it is simpler and more convenient to move these assets within DeFi compared to Bitcoin.

Quick link:[What is Proof of History and How Does It Work?](https://www.cyberscope.io/blog/what-is-proof-of-history-and-how-does-it-work)



## How to Avoid Crypto Drainers

As cyber criminals using crypto-draining techniques become more advanced, it will be more crucial for both web3 projects and users to integrate multiple security measures to guard against this harmful behavior. Wallet Guard and other Web3 security features can detect scam websites and pages, as well as evaluate potential security threats linked to digital currency wallets.

To avoid being exposed to drainers, individuals can store significant amounts of assets in an offline wallet and only move funds to a hot wallet as necessary. Participants in the ecosystem need to be cautious of links shared in chat rooms or on social media that might not be connected to the official account of a project.

In case a private wallet user must connect to a web3 site they are not familiar with, they can generate a temporary wallet without any assets and link it to the site. In case a drainer steals a victim's assets, the victim has the option to void any unfinished transactions.

## Who are the Targets of DaaS Attacks?

DaaS attacks can target a wide range of victims, but certain groups are more vulnerable:

* Individuals: People with limited cybersecurity awareness or weak security practices are prime targets for credential theft and subsequent account takeovers.
* Small Businesses: Small businesses often lack robust cybersecurity measures, making them susceptible to web injection attacks that target their online payment systems.
* E-commerce Platforms: E-commerce sites, especially those with large customer bases and high transaction volumes, are attractive targets due to the potential for large-scale financial theft.



## The Impact of Crypto Drainers

Crypto drainers, are increasingly used in the theft of cryptocurrency. However, analysis shows that the quarterly growth rate of funds stolen by crypto drainers has surpassed even ransomware, a rapidly growing category of cybercrime.

Learn More:[What is Trap Phishing and How You Can Protect Yourself](https://www.cyberscope.io/blog/what-is-trap-phishing-and-how-you-can-protect-yourself)

## Conclusion

Drainer-as-a-Service (DaaS) represents a significant and evolving threat in the Web3 ecosystem, enabling cybercriminals to easily exploit unsuspecting users and siphon off their cryptocurrency assets. As these malicious tools become more sophisticated, both individuals and Web3 projects must adopt stringent security measures to mitigate the risks. This includes using advanced security extensions, storing assets in offline wallets, and being vigilant about the links they interact with online. By staying informed and cautious, the Web3 community can better protect itself against the growing menace of crypto drainers.

Learn how Drainer-as-a-Service (DaaS) exploits Web3 wallets and key steps to protect assets from this rising cyber threat.

Drainer-as-a-Service (DaaS): Unmasking the Dark Web’s Latest Threat


## Introduction 

The concept of "Web3" refers to the next version of the internet, utilizing blockchain technology and decentralized applications (dApps) to create a more transparent and secure online environment. Web3 applications differ from traditional web apps by employing a decentralized network of nodes to authenticate transactions and perform added tasks.

Web3 comes with numerous benefits, although it also introduces specific security challenges. Utilizing smart contracts, which are contracts programmed within the blockchain that self-execute, poses a significant challenge. Smart contracts can be vulnerable to various types of attacks such as reentrancy, integer overflow, and denial-of-service attacks.

The security concern arises from the decentralized nature of Web3 apps. Due to the absence of a central authority or server for monitoring security, it could be harder to detect vulnerabilities. Moreover, due to its open-source nature, Web3 allows hackers to easily find vulnerabilities in the code, underscoring the importance of securing Web3 applications to prevent any unauthorized access or attacks.

Conducting specialized penetration testing for Web3 applications is essential due to these specific challenges. Smart contracts, decentralized applications (dApps), and other Web3 elements undergo security testing called "Web3 penetration testing" to uncover vulnerabilities and possible areas of attack. This type of assessment requires expertise, tools, and an understanding of the specific challenges presented by Web3.

## What is Web3 Penetration Testing?

Penetrating testing in web3 is a must for the security testing methods used for web2 applications. Anyone interested in learning Web3 should be aware that there has been a significant increase in momentum in Web3 development. Numerous companies and developers are interested in leveraging web3 technologies and principles to adopt the decentralized web. Web 3.0 is a groundbreaking concept that alters the operations of various sectors like finance, gaming, and supply chain management.

The increasing number of web3 startups is keeping pace with the growing amounts of investment in web3. Yet, the increasing appeal of web3 also opens the door to web3 weaknesses that may result in permanent outcomes. By reading the latest web3 security reports, you will discover that web3 security problems lead to significant financial losses.

In 2022, web3 security breaches resulted in financial losses exceeding $3.5 billion. Furthermore, it has been noted in reports that the losses resulting from web3 security breaches in the initial half of 2023 have exceeded $650 million. Hence, it is crucial to seek out preventative measures that can protect user data, funds, and the integrity of the blockchain structure.

Penetration testing is superior to the most advanced web3 security tools in protecting web3 applications and users. A thorough evaluation process for assessing the security of smart contracts, blockchain networks, and dApps is known as penetration testing in web3. The suggested method for conducting penetration testing in web3 involves replicating actual cyber attacks to pinpoint weaknesses and vulnerabilities in the web3 environment.

Quick link: [Crypto Vulnerability Management Solutions: A Quick Guide](https://www.cyberscope.io/blog/crypto-vulnerability-management-solutions-a-quick-guide)

## Top 5 Things You Need to Know About Web3 Penetration Testing

##### 1. Understanding the Scope and Objectives

Before conducting Web3 penetration testing, it's crucial to clearly define the scope and objectives of the testing. Identify specific targets such as decentralized applications (dApps), smart contracts, or wallets. Establishing clear goals and boundaries helps in accurately identifying and assessing all possible vulnerabilities within the Web3 environment.

##### 2. Importance of Specialized Knowledge

Web3 penetration testing requires a deep understanding of Web3 architecture, technologies, and protocols. Unlike traditional web applications, Web3 apps use distinct tools and frameworks. Knowledge of blockchain technology, smart contract programming languages, and interfaces like JSON-RPC is essential for effective testing. This specialized knowledge enables testers to identify vulnerabilities unique to the decentralized nature of Web3.

##### 3. Methodologies for Testing

Choose appropriate testing methodologies tailored for Web3 environments. Penetration testing in Web3 can be conducted using automated tools or manual methods. Automated tools can quickly identify common vulnerabilities, while manual testing allows for a more thorough and detailed examination of the application. Selecting the right combination of methodologies ensures comprehensive coverage of potential security issues.

##### 4. Types of Web3 Penetration Tests

Web3 penetration testing encompasses various types of tests to identify vulnerabilities across different components:

- External Network Penetration Tests: Simulate attacks from external threat actors to assess the security of the application's perimeter defenses.
- Internal Network Penetration Tests: Evaluate the security of the internal network by simulating insider threats or breaches.
- Application Penetration Tests: Focus on identifying vulnerabilities within the Web3 application itself, such as authentication bypass, and cross-site scripting.

##### 5. Real-World Attack Simulation

Effective Web3 penetration testing involves simulating real-world cyber attacks to uncover weaknesses and vulnerabilities. By replicating actual attack scenarios, testers can better understand how an attacker might exploit vulnerabilities in the Web3 environment. This approach helps in identifying critical security gaps and developing robust strategies to mitigate potential risks.

Understanding these key aspects of Web3 penetration testing ensures a comprehensive assessment of security vulnerabilities, enabling organizations to strengthen their defenses and protect their decentralized applications from potential threats.

Learn also: [What is an Injection Attack on the Blockchain?](https://www.cyberscope.io/blog/what-is-an-injection-attack-on-the-blockchain)

## Traditional Penetration Testing VS Web3 Penetration Tests

Web3 penetration testing varies from traditional penetration testing in numerous aspects. The initial distinction is apparent in the aspect that web3 applications operate in decentralized settings, resulting in unique security vulnerabilities. For instance, weaknesses in smart contracts could create additional opportunities for hackers to launch attacks.

Another factor that sets apart web3 from web2 penetration tests is the incorporation of blockchain technology. Learning web3 reveals that web3 applications possess built-in security characteristics. Nevertheless, the built-in security features were unable to protect web3 apps from weaknesses in the code or methods for engaging with blockchain.

Above all, it is crucial to prioritize the need for specific regulatory requirements for web3 during penetration testing. For instance, DeFi apps need to adhere to financial regulations while looking for weaknesses.

![Types of Penetration Testing ](https://firebasestorage.googleapis.com/v0/b/cyberscope-90197.appspot.com/o/blog%2Fbucket%2F1729687810901-image3.png?alt=media)

## Types of Penetration Testing in Web3

The upcoming subject in a web3 penetration testing guide is different types of penetration tests. It's important to consider that penetration tests simulate attacks on web3 systems and networks to discover vulnerabilities. Simultaneously, you may encounter three different forms of web penetration testing to reduce web3 security vulnerabilities. Here is a summary of the various penetration tests conducted in web3.

### Tests are conducted to assess the security of networks from the outside.

External network penetration tests concentrate on finding weaknesses in the perimeter defenses of web3 applications. In these kinds of penetration tests, you will see simulations of external threat actor attacks. The tests assess the efficiency of security measures like web application firewalls, firewalls, and intrusion detection systems. Conducting an external network penetration test can assist in pinpointing critical vulnerabilities like inadequate password protocols, accessible ports, and outdated software.

### Penetration tests within the organization's network.

The internal network penetration test is the subsequent version used to identify web3 vulnerabilities. Internal network penetration tests involve simulating scenarios in which a malicious actor infiltrates the internal network of web3 applications. These penetration tests are designed to pinpoint internal vulnerabilities like improperly configured access controls, inadequate network segmentation, and unprotected databases.

### Penetration Testing for Applications.

Web3 security experts should also prioritize conducting application penetration tests to identify weaknesses within the application. Incorporating application penetration tests into web3 security audits is crucial for identifying security vulnerabilities like authentication bypass, SQL injection, and cross-site scripting. Penetration testing of applications is an effective method to protect user data privacy and prevent unauthorized access.

[Cyberscope’s](https://www.cyberscope.io/penetration-testing-service) penetration testing services include real-world attack simulations to provide a realistic assessment of security defenses. Their thorough approach ensures that organizations are well-prepared to handle actual threats.

## Web3 Penetration Testing Components

Penetration tests in Web3 go beyond merely simulating attacks on the perimeter of web3 apps, their internal networks, and the application itself. They include various components designed to uncover a wide range of vulnerabilities. These components are smart contract audits, blockchain testing, wallet software testing, and DevOps penetration testing. Each plays a crucial role in ensuring the security of different aspects of Web3.

1. Smart Contract Audits: [Smart contracts](https://www.cyberscope.io/smart-contract-audit) are pivotal in the Web3 ecosystem, making their audits essential. Smart contract audits test access control, transaction order dependency, vulnerability to denial of service, and asset management capabilities. Common vulnerabilities identified include time manipulation, insufficient access controls, reentrancy attacks, and short address attacks.
2. Blockchain Testing: Blockchain testing evaluates vital components and potential attack surfaces within the blockchain. It involves checking peer-to-peer protocol vulnerabilities, blockchain block parsing, RPC authentication, and secure RPC method implementation. Typical attack surfaces identified include communication interfaces, OS and services, DevOps, and input management.
3. DevOps Penetration Tests: DevOps penetration testing focuses on assessing code repository contents and access privileges, secrets management, and access to production deployment. Given its extensive technological footprint and limited security controls, DevOps is an attractive target for malicious actors.

![Benefits of Penetration Testing ](https://firebasestorage.googleapis.com/v0/b/cyberscope-90197.appspot.com/o/blog%2Fbucket%2F1729688028050-image1.jpg?alt=media)

## Benefits of Penetration Testing 

Penetration testing offers numerous benefits, particularly in enhancing an organization's security posture. Here are some key benefits:

##### 1. Identifying Vulnerabilities

Penetration testing helps in uncovering vulnerabilities in a system, network, or application that attackers could exploit. By identifying these weaknesses, organizations can take proactive measures to address them before they are exploited.

##### 2. Protecting Reputation

Security breaches can damage an organization's reputation and erode customer trust. Regular penetration testing helps prevent breaches, protecting the organization's reputation and maintaining customer confidence.

##### 3. Improving Security Posture

Penetration testing provides detailed insights into an organization’s security strengths and weaknesses. This enables the organization to improve its overall security posture by implementing effective security measures and controls.

##### 4. Cost Savings

Addressing security vulnerabilities proactively through penetration testing can save organizations significant costs associated with data breaches, including legal fees, remediation costs, and loss of business.

### Conclusion

In the evolving landscape of Web3, the importance of robust security measures cannot be overstated. Web3 penetration testing emerges as a critical practice to safeguard decentralized applications, smart contracts, and blockchain networks from potential vulnerabilities and cyber threats. By understanding the unique challenges and requirements of Web3 environments, organizations can effectively identify and mitigate risks through specialized knowledge, appropriate methodologies, and real-world attack simulations.

Implementing comprehensive Web3 penetration testing helps organizations achieve a strong security posture, protect user data, ensure compliance with regulatory standards, and maintain trust within the Web3 ecosystem. As the adoption of Web3 technologies continues to grow, staying ahead of security challenges through proactive and thorough penetration testing will be key to securing the future of decentralized applications and blockchain technologies.


Web3 penetration testing identifies vulnerabilities in dApps, smart contracts, and blockchain networks to defend against cyber threats and improve security.

Web 3.0 Penetration Testing: Top 5 Things You Need To Know


## What is zkSync?

zkSync is a leading Layer 2 scaling solution for Ethereum, utilizing zero-knowledge rollups (zk-rollups) to provide faster and more cost-efficient transactions. To leverage zkSync's benefits effectively, you need a compatible wallet. Here’s an in-depth guide to the top five zkSync wallets, covering features, transaction fees, security, customer support, and user feedback.

zkSync is a technology developed by Matter Labs designed to address Ethereum’s scalability challenges. By utilizing zero-knowledge rollups, zkSync allows for faster and cheaper transactions compared to Ethereum’s mainnet while maintaining high security.

## How Does zkSync Work?

1. **Zero-Knowledge Rollups (zk-Rollups):**

   Batching Transactions: zkSync aggregates multiple transactions into a single batch. These batches are processed off-chain, which reduces the burden on the Ethereum mainnet.

   Proof Generation: A cryptographic proof (zero-knowledge proof) is generated to confirm the validity of the batch. This proof is then submitted to the Ethereum mainnet, which verifies the batch’s correctness without needing to process each transaction individually.

2. **Security and Data Availability:**

   Security: zkSync inherits the security of Ethereum by anchoring its proofs on the mainnet. This ensures that even though transactions are processed off-chain, they are still secured by Ethereum’s robust security infrastructure.

   Data Availability: Transaction data is stored on-chain in a compressed format, ensuring that data can be recovered and verified if needed.

3. **Scalability:**

   Higher Throughput: By processing transactions off-chain and batching them, zkSync significantly increases the transaction throughput compared to Ethereum's Layer 1.

   Lower Fees: The cost of transactions on zkSync is lower because the system reduces the amount of data and computation required on Ethereum’s mainnet.

Learn also: [Real World Assets (RWA) in Crypto: Everything You Need to Know](https://www.cyberscope.io/blog/real-world-assets-rwa-in-crypto-everything-you-need-to-know)

## What You Get With zkSync

By using zkSync, you receive:

1. **Reduce the cost of gas:** Pay only 1% of the cost compared to the main Ethereum network. And more affordable than utilizing optimistic rollups.
2. **Quick transactions:** More than 2000 transactions per second are possible, in comparison to only 14 tps on the primary network.
3. **Security:** The Ethereum blockchain ensures the protection of your transactions.
4. **Simple transactions:** Transfer your digital currency seamlessly and swiftly between the Ethereum main network and Layer 2.
5. **Freedom:** You have the option to transfer your funds back to the primary Ethereum network at any time.

However, a high-quality wallet is essential for utilizing all the features available in the zkSync ecosystem. Wallets assist in purchasing, trading, and securely storing cryptocurrency. You can also discover DeFi and NFTs through them. Accessing zkSync is not possible yet through exchanges such as Coinbase or Binance. Therefore, you should be aware that these are some of the best zkSync wallets.

## Top Cryptocurrency Wallets on zkSync

## 1. Holdstation Wallet

![Holdstation Wallet](https://firebasestorage.googleapis.com/v0/b/cyberscope-90197.appspot.com/o/blog%2Fbucket%2F1727940539588-image5.png?alt=media)

Overview\
Holdstation Wallet, based in Singapore, offers a robust solution for managing various digital assets including coins, tokens, and NFTs. As a non-custodial wallet, it gives users full control over their private keys and transactions, making it a leading choice in the zkSync Era ecosystem.

**Key Features**

**Security:** Undergoes thorough security audits by Verichains and integrates zkSync for enhanced protection. The 'Revoke' feature allows users to monitor and revoke contract access, reducing asset loss risk.

**zkSync Integration:** Enables fast, cost-effective transactions with zkSync, a Layer 2 scaling solution, and supports Account Abstraction (AA) for efficient token swaps and gas fee payments.

**Holdstation DeFutures:** A futures trading platform that supports high leverage across various assets while keeping funds securely in the user’s wallet.

## 2. BlockWallet

![BlockWallet](https://firebasestorage.googleapis.com/v0/b/cyberscope-90197.appspot.com/o/blog%2Fbucket%2F1727940659062-image4.png?alt=media)

BlockWallet is a highly secure browser extension wallet designed to ensure privacy for your funds. It employs advanced privacy technologies to make it virtually impossible to trace the origin of your money. When you withdraw funds, BlockWallet generates a new address that is not linked to any of your previous transactions.

**Privacy Features:**

**Supports Privacy-Enhancing EVM Chains:** Utilizes chains that are built to enhance privacy.

**IP Address Masking:** Conceals your IP address to further protect your privacy.

BlockWallet is ideal for users who prioritize privacy and anonymity in their transactions.

## 3. Rabby

![Rabby Wallet](https://firebasestorage.googleapis.com/v0/b/cyberscope-90197.appspot.com/o/blog%2Fbucket%2F1727940789860-image6.png?alt=media)

Rabby Wallet is a non-custodial wallet designed for Ethereum that connects to decentralized applications (dApps). Unlike MetaMask, Rabby offers additional features that enhance its functionality:

**Special Features:**

**Multi-Chain Support:** Connects to 44 different blockchain networks and automatically selects the correct chain for transactions. You can also manually switch chains if desired.

**Pre-Signature View:** This allows you to see the details of a transaction before you approve it, including how your balance will be affected.

**Risk Assessment:** Check the safety of transactions before you sign, alert you to potentially risky deals, and verify the legitimacy of addresses.

Rabby is an excellent alternative to MetaMask with its enhanced features and automatic chain selection.

## 4. Argent Wallet

![Argent Wallet](https://firebasestorage.googleapis.com/v0/b/cyberscope-90197.appspot.com/o/blog%2Fbucket%2F1727940924001-image3.png?alt=media)

Overview\
Argent Wallet is a non-custodial wallet designed to simplify access to DApps and asset recovery without the need for seed phrases. It supports a wide range of networks, including Ethereum, Starknet, and zkSync.

**Key Features**

**User-Friendly Access:** Eliminates seed phrases for easier recovery.

**Wide Network Support**: Includes Ethereum, Layer 2 solutions, Starknet, and zkSync.

**Argent X for Developers:** Offers a specialized wallet for developers on the Starknet network.

**zkSync Integration:** Available on mobile apps for zkSync 1.0 (zkSync Lite), though zkSync Era 2.0 is not supported in these versions.

## 5. xRaise

![xRaise](https://firebasestorage.googleapis.com/v0/b/cyberscope-90197.appspot.com/o/blog%2Fbucket%2F1727940999804-image2.jpg?alt=media)

xRaise is a prominent wallet within the gaming community, designed specifically for gamers with a focus on smart contracts and gaming functionality. Its user-friendly interface is intuitive, making it accessible even for beginners.

**Key Features:**

**zkSync Integration:** Fully compatible with any app in the zkSync ecosystem.

**Account Abstraction:** Allows interaction with smart contracts without the need to manage private keys, offering enhanced security and flexibility.

**Session Keys:** Enables you to sign transactions in advance, so you can play games uninterrupted. This feature eliminates the need to pause your game for wallet interactions.

**Social Recovery:** Provides a system to help recover your wallet if needed, enhancing security.

**Payment Scheduling:** Allows you to set up and schedule payments for subscriptions, in-game purchases, and even payroll.

xRaise is particularly suited for gamers who want a secure and seamless wallet experience without interrupting their gaming sessions.

## Benefits of ZKsync

zkSync provides several key benefits that enhance the Ethereum network’s scalability, efficiency, and user experience:

1. **Scalability:** zkSync significantly increases transaction throughput by using zk-Rollups to bundle multiple transactions into a single proof. This allows the network to handle a higher volume of transactions per second compared to the Ethereum mainnet.
2. **Cost Efficiency:** Transactions on zkSync are much cheaper than on Ethereum’s mainnet. By aggregating multiple transactions into a single proof, zkSync spreads the cost across many transactions, reducing fees for users.
3. **Speed**: zkSync reduces transaction times by processing them off-chain and only posting aggregated proofs to the Ethereum mainnet. This results in faster transaction confirmation and processing.
4. **Security:** zkSync uses zero-knowledge proofs (ZK-SNARKs) to ensure the validity and security of transactions. This method maintains strong security guarantees while keeping transaction details private and secure.
5. **User Experience:** zkSync improves user experience with lower fees and faster transactions, making it more practical for everyday use cases like payments and DeFi interactions. This also enhances the overall usability of decentralized applications (dApps) built on the platform.
6. **Interoperability:** zkSync is compatible with Ethereum, allowing developers to build and deploy dApps with minimal changes. This interoperability supports a seamless integration with existing Ethereum-based projects and services.
7. **Decentralization:** zkSync maintains Ethereum’s decentralization ethos by utilizing its Layer 2 solution, which operates on top of the mainnet while benefiting from its security and consensus mechanisms.
8. **Developer-Friendly:** zkSync provides developer tools, including SDKs and APIs, which make it easier to integrate its technology into applications. This support helps accelerate the development and adoption of zkSync-powered solutions.

Overall, zkSync addresses many of Ethereum’s limitations, offering a more scalable, cost-effective, and user-friendly solution for handling transactions and interacting with decentralized applications.

Quick link: [What is an Injection Attack on the Blockchain?](https://www.cyberscope.io/blog/what-is-an-injection-attack-on-the-blockchain)

## Conclusion

zkSync provides a transformative solution for Ethereum by enhancing scalability, reducing transaction costs, and speeding up processing times through its zero-knowledge rollups technology. With significant improvements in throughput and lower fees, zkSync addresses many of Ethereum's limitations while preserving its security and decentralization. By integrating with zkSync-compatible wallets, users can efficiently manage their assets, access decentralized applications, and enjoy a seamless experience in the Ethereum ecosystem.

Each of the top zkSync wallets—Holdstation, BlockWallet, Rabby, Argent, and xRaise—offers unique features tailored to different needs, whether it's privacy, multi-chain support, or gaming. Embracing zkSync and its compatible wallets can greatly enhance your interactions with Ethereum’s expanding Layer 2 ecosystem.


Top 5 zkSync wallets for faster, secure Ethereum transactions using zk-rollups: Holdstation, BlockWallet, Rabby, Argent, and xRaise.

Cyberscope Attends Web3 | Impact the Economy 2023

Recent Posts

Smart Contracts in Modern Blockchain App Development

Drainer-as-a-Service (DaaS): Unmasking the Dark Web’s Latest Threat

Web 3.0 Penetration Testing: Top 5 Things You Need To Know

The Top 5 zkSync Wallets

Subscribe To Our Newsletter