zkLink Nova, a layer 3 that aggregates liquidity from all Ethereum layer 2s, presents its new product: MergeToken. This tool enables tokens of the same value, such as stablecoins, to be merged into a single token, greatly enhancing the user experience and creating even greater liquidity. How it works
zkLink Nova further unifies layer 2 with MergeToken
Today, the same cryptocurrencies hosted on Ethereum’s layer 2s are not systematically compatible with each other. For example, for the stablecoin USDC, there’s no shortage of iterations: USDC.e on Arbitrum and Optimism, USDbC on Base, axlUSDC on Linea and Scroll, etc.
This greatly fragments liquidity and taints the experience of Web3 users, who can sometimes even lose their funds due to mishandling when transferring USDC from one blockchain to another when using a bridge.
It is for these reasons that layer 3 zkLink Nova has deployed its new solution called MergeToken. This application enables assets of the same value from different layer 2s to be consolidated into a single token. For example, USDC.e and USDbC merge into USDC.
For the launch of MergeToken, it is possible to merge different iterations of the stablecoins USDC, USDT and DAI. In the near future, WBTC and other tokens will be added based on developer and user demand.
This initiative follows the launch of Nova’s mainnet and is the next step in zkLink’s mission to solve the problem of liquidity fragmentation on Ethereum layer 2.
We’re setting a precedent for a practice that we hope will be adopted by other projects to make the Web3 environment more user-friendly. The support of the governance committee underscores the legitimate potential of token merging to unlock new DeFi use cases.
Vince Yang, CEO and co-founder of zkLink
The token merging process via the Merge Token tool is managed by a governance committee made up of 12 Web3 entities namely Wintermute, Particle Network, Skynet Trading, Flowtraders, Ascensive Assets, Republic Crypto, Efficient Frontier, SIG, USDV, Layer Bank, Redstone Oracles and Manta Network.
This committee will review and approve or reject proposals to add tokens within MergeToken, decentralizing decision-making and preventing autonomous control.
A new asset for developers of decentralized applications (dApps)
In addition, MergeToken enables developers to deploy dApps on zkLink that take full advantage of consolidated liquidity for tokens following the same value, thus broadening the types of use cases.
In this way, Nova will serve as a network on which tokens of the same value can be combined into a single token, thereby increasing the liquidity of the Nova network and the entire layer 2 ecosystem.
Our MergeToken liquidity pool provides the industry’s most flexible and secure resource, reducing the frustration of fragmented stablecoin transfers, especially useful as more and more RWAs and LRTs are integrated on-chain.
Vince Yang, CEO and co-founder of zkLink
