Hashkey Capital’s H1 2024 report reveals key blockchain developments, including zkVM adoption in Ethereum and concerns over block builder centralization. Learn about the latest trends in DeFi and account abstraction.
Bollywoodfever: Hashkey Capital, a major venture capital firm specializing in Web3 and cryptocurrency, has released its sector analysis for the first half of 2024. The report highlights significant technological advancements in the blockchain industry, with a particular focus on Ethereum, zero-knowledge virtual machines (zkVM), account abstraction, and the decentralized finance (DeFi) landscape.

Ethereum zkVM Growth and Challenges
The report emphasizes the increasing adoption of zkVM technology within the Ethereum ecosystem. Projects such as Taiko, Scroll, and Ethereum’s PSE are pushing the boundaries of zkVM development, with innovations like Plonky3 offering performance improvements over older systems like Halo2. Hashkey Capital’s researchers believe that the cost of proving, efficiency, and hybrid verification models will be pivotal in driving broader zkVM adoption. These advancements are set to support verifiable applications across the Ethereum ecosystem.
Concerns Over Block Builder Centralization
Hashkey Capital raises concerns about the growing centralization of block builders in Ethereum, particularly the dominance of players like Beaverbuild, Titan Builder, and Rsync Builder. The report warns that this centralization poses a threat to Ethereum’s censorship resistance. To address this issue, the firm stresses the need for innovative block auction designs to maintain Ethereum’s decentralization.
Solutions like Flashbots and Titan Relay have emerged to enhance block supply while mitigating centralization risks. More than 90% of Ethereum blocks currently pass through relays, with Titan Relay showing notable growth since its launch.
DeFi and Account Abstraction Developments
The report also delves into the evolving DeFi landscape, pointing to increasing interest in account abstraction and modular services. Ethereum’s upcoming Pectra upgrade is expected to improve smart contract wallets and developer experience. Projects such as Polygon and Base are leading the charge in account abstraction, with smart wallet usage on the rise. Hashkey Capital predicts that further protocol-level enhancements will drive the development of higher-quality decentralized applications.
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