Ethereum Foundation to Invest $10 Million in Zero-Knowledge Virtual Machines
On November 29, the Ethereum Foundation (EF) announced a $10 million investment in zero-knowledge virtual machines (zkVMs). This funding is part of its strategy to enhance Ethereum’s scalability, security, and overall blockchain capabilities.
A Strategic Investment in zkVMs to Enhance Ethereum’s Future
Ethereum researcher Justin Drake shared details of this investment on X. zkVMs improve Ethereum's ability to process transactions securely and efficiently through zero-knowledge proofs, which validate transactions without exposing sensitive information. This technology is crucial for enhancing privacy and scalability within blockchain systems.
The EF is investing tens of millions into zkVMs:https://t.co/XDaHyurNK9—zkRISC-V formal verificationhttps://t.co/ML0PUqliRb—Poseidon cryptanalysishttps://t.co/0Qns6MCIuu—L2beat for zkVMs, soon™
— Justin Ðrake 🦇🔊 (@drakefjustin) November 28, 2024
The $10 million will support several key zkVM projects, including zkevm.org for formal verification, Poseidon cryptanalysis, and ethproofs.org. This financial backing aims to bolster Ethereum’s security and performance.
The foundation’s investment aligns with its commitment to promoting growth in the Decentralized Finance (DeFi) ecosystem.
Market Reactions: Ethereum Price and Co-founder Activity
This investment arrives amid fluctuations in Ether’s price. Ethereum co-founder Jeffrey Wilcke recently transferred 20,000 ETH to the Kraken exchange, raising speculation about a potential selloff. He previously sold 44,300 Ether at an average price of $3,342, contributing to market uncertainty.
Currently, Ether has seen a slight decline of over 1% intraday, trading at $3,567. This drop reflects broader market trends marked by selling pressure, particularly from whale holders.
Despite these short-term declines, Ethereum recorded a 15% weekly increase, surpassing the $3,600 mark, its highest level in five months. Analysts maintain a bullish outlook, projecting that Ethereum could reach $4,000 during its ongoing bull rally, driven by optimism surrounding upcoming upgrades designed to enhance the protocol and reduce gas fees.
Additionally, the Ethereum Foundation continues to manage its assets strategically, recently transferring 1,250 Ether to Bitstamp as part of its asset management plan.