The Bank Stack of Ethereum
The Bank Stack: an institutional architecture using private ZK-execution and safety controls to bring secure, programmable finance to Ethereum.
ZKsync Blog > L1 Interop: A Path To Scaling ...
Published Dec 4, 2025
L1 Interop: A Path To Scaling Ethereum’s Liquidity
It feels like every month a new chain appears promising to “fix” DeFi incentives yet every launch repeats the same pattern. Each major DeFi protocol has to redeploy, rebuild liquidity, and chains spin up another liquidity-mining campaign. The result is a structural cold-start problem the entire ecosystem keeps reliving.
Meanwhile, Ethereum continues to hold the lion’s share of crypto-native lending liquidity. What’s been missing is a way for L2s to use that liquidity directly.
For years, L2s have scaled Ethereum’s performance.
Today, for the first time, they can scale Ethereum’s liquidity.
A few weeks ago, we shared for the first time our vision about Ethereum turning into the main capital hub of the ZKsync ecosystem, enabled by our Atlas upgrade.
L1 Interop makes it possible for any ZK Stack chain to tap Ethereum DeFi natively without giving up its own governance, privacy, or execution environment. A user on a ZK Chain can deposit into Aave or borrow GHO on Ethereum with no fragmented liquidity and no slow bridges.
Paired with Prividiums, this becomes the first architecture where institutions get private systems and seamless access to public-market liquidity.
How this works
From the user’s perspective, the experience is simple, with the protocol handling the mechanics of the L2 ↔ L1 interaction. The user signs a transaction at L2 just as they would a normal L2 transaction, but in this case it triggers the following steps:
- Assets are withdrawn within minutes to an aliased account (aka shadow accounts) on Ethereum.
- Our Airbender proof system is incredibly efficient, and able to generate a proof for an L2 block in ~1 second.
- With the ZK proof generated and verified, funds move from L2 → L1 within minutes, with no intermediaries or custodial risk. These low latency withdrawals are further made possible by running multiple independent implementations of the client sequencer, hardening the system against potential bugs or attacks.
- The funds arrive at an aliased account, a deterministic Ethereum address that is cryptographically bound to the L2 account. No new keys are required; the same user controls both layers.
- An interop transaction bundle is prepared and executed.
- On L2, the user signs an interop transaction bundle that describes what their aliased L1 account should do (for example, call
deposit()on Aave and then borrow()GHO against that collateral).
- On L2, the user signs an interop transaction bundle that describes what their aliased L1 account should do (for example, call
- Optionally, bridge the borrowed tokens back to the L2
- The user can bridge their borrowed tokens (e.g., GHO in this case) back to L2 for a unified portfolio view. In practice, this feels like a single action: the same interop transaction bundle both borrows on L1 and returns the borrowed tokens to L2.
From the user’s point of view, they never have to switch networks or manage a separate L1 wallet, but they can still tap into the deep public liquidity of the Ethereum DeFi ecosystem.
Ethereum for Enterprises
This design pattern unlocks powerful use-cases for enterprises and institutions wanting to build on Ethereum.
Private access to Ethereum liquidity & markets
Teams operating a Prividium can use this pattern without compromising privacy. Their users get:
- Private access to lending, liquidity pools, yield markets, and vaults
- Integration with existing DeFi protocols instead of rebuilding them
- Participation in deep public markets while keeping internal workflows private
Streamlined treasury, credit & funding operations
ZKsync’s Interop becomes a powerful tool for corporate finance teams. They can move assets between ZK Chains and Ethereum L1 in minutes to:
- Optimize collateral usage
- Improve yield strategies
- Support intraday funding and liquidity management
- Hedge exposures in real time
Private operations stay on their chain; market interactions happen on L1.
Advanced trading & risk systems on L2 with L1 settlement
For trading firms, exchanges, and structured product issuers, this model allows them to:
- Run high-performance matching engines, vaults, risk engines, or credit systems on L2
- Settle and manage collateral natively on Ethereum L1
- Deliver better execution to traders and market-makers
This gives institutional markets the best of both worlds: L2 performance with L1 liquidity and solvency guarantees.
From Omnibus accounts to Ethereum as the capital hub
Many institutional Ethereum integrations today still rely on omnibus accounts.
- The operator holds one large wallet on Ethereum and all client balances are tracked in an internal database.
- Onchain you see a single pooled account; offchain you see sub-accounts and reconciliation spreadsheets. Users effectively hold IOUs against that pool, not their own positions.
L1 Interop flips that model.
With ZK Chains and Prividiums, each user has an aliased account on Ethereum. When they deposit, post collateral, or provide liquidity into a DeFi protocol like Aave, they do so directly from that account.
- Assets and risk live in segregated, on-chain positions on L1, while the L2 coordinates access, permissions, and supports high-throughput workflows.
- For finance, risk, and legal teams, this is much closer to the mental model they already use: clear ownership, clean segregation, verifiable records, and fewer failure modes from commingling funds.
As users interact with real L1 protocols rather than fenced-off replicas, they also inherit the full composability of Ethereum.
- A position opened via a ZK chain is visible and usable alongside the rest of Ethereum DeFi, including by trading firms, market makers, structured product issuers, tokenization platforms, and anyone else building on the same protocols.
- The chain becomes a private, programmable front-end to a shared public capital base, not a walled garden.
This is the concrete realization of the idea that “Ethereum is now the main capital hub of ZKsync.”
- Ethereum becomes the single, transparent hub where capital sits and risk is discovered; ZK Chains and Prividiums become specialized environments that provide privacy, sovereignty, and performance for specific institutions, markets, or jurisdictions.
Enterprises no longer have to choose between private, compliant systems on the one hand and Ethereum’s liquidity, market depth, and trust guarantees on the other.
With L1 Interop, they keep sovereignty over their own chain, gain native access to Ethereum, and give their users a single wallet, a single identity, and a seamless bridge between institutional workflows and the world’s most valuable on-chain financial ecosystem.
Want to learn more? Get in touch with us!
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