ZKcandy: Pioneering the Next Generation of Web3 Gaming
Abstract
ZKcandy is building a specialized Layer 2 solution for blockchain gaming to address key challenges such as scalability, high transaction fees, and developer onboarding. This report explores ZKcandy’s technical infrastructure, strategic market positioning, and industry collaborations, highlighting its role in enabling Web2 game studios to transition into Web3 gaming. With strong industry backing and technological innovation, it aims to accelerate the adoption of blockchain technology in gaming.
Key Takeaways (TL;DR)
- ZKcandy is a ZK-Rollup-based Layer 2 solution built on zkSync’s Elastic Chain, designed to provide low-cost, high-speed transactions while maintaining Ethereum compatibility.
- $4M Seed Funding Secured – Backed by top-tier VCs, including Animoca Brands and The Spartan Group.
- Industry Collaborations – Established as a joint venture between Matter Labs and iCandy Interactive, with partnerships across major gaming studios to bridge Web2 and Web3 gaming.
- Comprehensive Developer Ecosystem – ZKcandy provides SDKs, wallet integrations, and tools to simplify Web3 onboarding for game developers.
- Competitive Positioning: It stands out against Immutable zkEVM, Ronin, and Beam with a gaming-first approach and industry-backed adoption.
- Successful Testnet Deployment – The ZKcandy Voyage Testnet saw significant adoption, with 2,465,974 registered wallets and active participation from developers and players.
1. Introduction
The blockchain gaming industry has experienced significant growth over the past 3 years. In 2024, the global market was valued at approximately $14.8 billion and is projected to reach $887 billion by 2032, representing a compound annual growth rate (CAGR) of 62.59%, according to a report by Vision Research Reports (Vision Research Reports, 2024). This growth is primarily driven by the increasing adoption of blockchain-based economies, tokenized assets, and digital ownership models within gaming ecosystems.
Figure 1: Blockchain In Gaming Market Size, 2022 to 2032 (USD Billion)
However, despite rapid development, blockchain gaming still faces fundamental challenges such as scalability, transaction costs, and cross-game interoperability. High transaction fees and network congestion negatively impact user experience, while the lack of interoperability between gaming ecosystems restricts asset utility across different platforms. Existing solutions like Immutable X, Ronin, and BeamAI attempt to address these issues but still struggle with cost inefficiencies, liquidity fragmentation, and onboarding hurdles for game developers. These limitations highlight the need for a more robust infrastructure that seamlessly integrates Web3 gaming experiences.
Founded in 2023 by CEO Lau Kin Wai, ZKcandy is a Layer 2 solution designed to optimize gaming in blockchain by leveraging zero-knowledge rollups within the zkSync ecosystem. The project addresses key pain points in blockchain gaming, such as high transaction fees, slow processing times, and limited interoperability. ZKcandy lowers the entry barriers for Web2 and Web3 game developers by providing a scalable and cost-efficient infrastructure while maintaining Ethereum compatibility.
ZKcandy is a joint venture between Matter Labs and iCandy Interactive, combining Matter Labs’s expertise in zkSync technology with iCandy’s extensive gaming ecosystem. iCandy Interactive – the largest game developer in Australia and Southeast Asia – brings a portfolio of over 500 games and a user base exceeding 300 million players. This collaboration positions ZKcandy at the intersection of blockchain innovation and mainstream gaming.
2. ZKcandy Technology & Innovation
ZKcandy tackles key challenges in blockchain gaming with a robust technical framework and developer-friendly tools. By leveraging zero-knowledge rollups and modular scaling solutions, it enhances transaction efficiency, scalability, and interoperability. This section explores ZKcandy’s core architecture, development infrastructure, and economic mechanisms, highlighting how its innovations position it as a leading Layer 2 solution for gaming.
2.1. Core Architecture
ZKcandy’s architecture is built to optimize blockchain gaming by leveraging Layer 2 scalability solutions. It prioritizes high efficiency, seamless interoperability, and cost-effective transactions, ensuring a smooth experience for developers and players. By integrating zero-knowledge rollups and a modular scaling framework, ZKcandy enhances network performance while maintaining Ethereum compatibility, making blockchain gaming more accessible and scalable.
2.1.1 ZKsync Elastic Chain: The Backbone of ZKcandy
Elastic Chain is a modular scaling architecture introduced in zkSync 3.0, designed to create an interconnected network of ZK-powered chains. Elastic Chain enables seamless interoperability, enhanced scalability, and a shared liquidity layer across different rollups.
Key Features of Elastic Chain:
- Interoperability – Enables cross-rollup transactions without third-party bridges, reducing friction and security risks.
- Scalability – Dynamically allocates resources based on demand, maintaining high throughput as adoption grows.
- User Experience – Players and developers can interact across multiple chains using a single address, ensuring low latency and minimal fees.
2.1.2 ZK-Rollup Scalability Engine
ZKcandy leverages advanced ZK-Rollup technology to enhance the speed and affordability of blockchain gaming. Instead of processing each game action individually, ZKcandy aggregates multiple in-game transactions into a single cryptographic proof before submitting it to the network. This batching mechanism significantly reduces gas fees, minimizes network congestion, and accelerates transaction finality, ensuring a seamless gaming experience.
Key Features:
- Efficient Processing: Can handle multiple transactions in each Ethereum block.
- Fast Verification: A network of powerful computers is used to check game actions quickly.
- High Capacity: Designed to manage millions of daily transactions from thousands of players.
This setup allows players to enjoy instant in-game asset trading, fair loot box openings, smooth play-to-earn features, and cross-game item transfers without delays or high fees.
2.1.3 zkSNARKs & zkStack: Enhancing Security, Privacy, and Ownership in ZKcandy
ZKcandy integrates zkSNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge) and zkStack, a modular framework designed to reinforce security, privacy, and interoperability in blockchain gaming.
Strengthening Security & Privacy with zkSNARKs
- Fraud Prevention – zkSNARKs allow transactions and ownership verification without exposing sensitive data, ensuring in-game assets remain protected from fraud and unauthorized alterations.
- Privacy-Driven Transactions – By utilizing zkSNARKs, ZKcandy enables secure in-game purchases, trades, and interactions without revealing user identities, aligning with growing privacy demands in gaming.
zkStack: Powering True Digital Ownership & Interoperability
- NFT Security & Player Ownership – zkStack enhances NFT integrity, ensuring in-game assets are verifiable, transferable, and uniquely owned by players, fostering a decentralized gaming economy.
- Self-Sovereign Player Identities – Players maintain full control over their gaming profiles, progress, and digital identities without reliance on centralized servers, reducing the risks of data breaches.
- Seamless Cross-Game Asset Transfers – zkStack’s interoperability allows assets, achievements, and game elements to move fluidly across multiple gaming platforms, unlocking new gameplay possibilities.
2.2 ZKcandy Gaming SDK & Developer Tooling
ZKcandy offers a developer-friendly SDK to streamline blockchain integration in gaming. The toolkit provides essential features for asset management, cross-game interoperability, and in-game transactions without requiring extensive blockchain expertise.
2.2.1 NFT & Game Asset Management
ZKcandy’s SDK allows developers to mint, manage, and customize NFTs for in-game assets. These assets remain securely stored on-chain, ensuring transparent ownership and seamless trading within and across gaming ecosystems. For instance, in games such as “EVM Warfare” or “PEPE Kingdoms” that are already live on ZKcandy, players can trade in-game assets seamlessly, and these assets can be used across other ZKcandy-enabled games, further enhancing liquidity and fostering a broader gaming ecosystem.
2.2.2 In-Game Wallet & Economy
To simplify blockchain interactions, ZKcandy provides a built-in wallet system, facilitating:
- Seamless payments and asset transfers, reducing transaction complexity.
- Efficient tokenized economies, improving accessibility for mainstream players.
- Secure transactions, ensuring fraud-resistant in-game exchanges.
With these developer-centric tools, ZKcandy aims to reduce adoption barriers while ensuring a scalable and efficient ecosystem for game developers and players.
3. Ecosystem & Market Positioning
Beyond its technological innovations, ZKcandy’s position in the blockchain gaming market is defined by its strategic investor backing and key partnerships. As the industry shifts toward more scalable gaming solutions, understanding the competitive landscape helps highlight ZKcandy’s approach.
3.1 Competitive Landscape
Figure 2: Competitive Landscape: ZKcandy vs. Other Gaming Blockchains
The table above provides a detailed comparison of ZKcandy’s offerings relative to those of its competitors. While each platform addresses different aspects of blockchain gaming, ZKcandy differentiates itself by focusing on cross-game asset interoperability, AI-driven gaming infrastructure, and seamless onboarding for game studios. While its precise TPS and transaction cost structure are yet to be confirmed, ZKcandy is designed to deliver high throughput and cost-efficient transactions tailored to gaming needs.
3.2 Investors & Backers
On January 6, 2025, ZKcandy secured $4 million in seed funding shortly after launching its open testnet phase. The round was led by The Spartan Group, Animoca Brands, Presto Labs, Flowdesk, Lecca Ventures, WEMIX, Prometheuz, Efficient Frontier, and angel investor Jin Kang. This funding reinforces confidence in ZKcandy’s market potential and long-term vision under CEO Lau Kin Wai. The capital will support ecosystem expansion and strengthen ZKcandy’s position in the blockchain gaming industry.
Figure 3: ZKCandy Raises $4M Seed Round with Strategic Investors
Beyond financial backers, ZKcandy benefits from the support of zkSync and iCandy Interactive, a leading publicly listed gaming company in ANZ and SEA. iCandy Interactive has contributed to globally recognized titles such as Mortal Kombat 11, The Last of Us Part I, and Spider-Man Remastered, further solidifying its influence in the gaming industry.
3.3 Partnerships & Collaboration
Figure 4: ZKcandy Network & Ecosystem Map
ZKcandy’s partnerships are spread across different categories, including:
- Infrastructure & Scaling → Collaborations with zkSync, Aethir, and Micro3 provide foundational support, enhancing blockchain efficiency, AI-driven solutions, and decentralized GPU computing for high-performance gaming.
- Gaming Studios & Developers → Working with Delabs Games, Hypercomic, and BTFD.WTF, ZKcandy secures a steady pipeline of games that leverage Web3 capabilities.
- Wallet & Digital Identity Solutions → Strategic alliances with Holdstation, ZNS Connect, and Pea.AI simplify onboarding processes and enhance security for both developers and players.
- GameFi & DeFi Integration → Partnerships with GRVT, Zeek, and Prometheuz add financial layers to gaming, merging play-to-earn mechanics with decentralized finance solutions.
ZKcandy’s ecosystem strategy ensures every critical aspect of a gaming blockchain is well-supported, from infrastructure and developer tools to game studios and financial integrations.
4. Adoption & Growth Potential
The adoption of a gaming blockchain depends on its ability to attract developers, onboard studios seamlessly, and provide an accessible transition for Web2 game creators. ZKcandy has gained significant traction, evidenced by its public testnet activity and active participation from developers and gamers.
4.1 Market Validation & Testnet Performance
To validate its scalability and developer adoption, ZKcandy launched ZKcandy Voyage, a two-week public testnet campaign designed to assess network stability under real gaming conditions. This initiative served as a stress test while providing early participants with direct exposure to the ecosystem’s infrastructure and incentives.
Key Metrics from ZKcandy Voyage Testnet:
- Total Registered Wallets: 2,465,974
- Active Games Deployed: 8 live games
The testnet saw a high level of engagement, reflecting developer interest and the network’s ability to handle real-time gaming transactions at scale. Participants earned Candy Points through on-chain activities, with Voyager Pass NFTs awarded to top contributors. These NFTs grant 10,000 Candy Points and a 1.05x token multiplier, incentivizing continued involvement as ZKcandy moves toward mainnet. Beyond user participation, ZKcandy Voyage provided crucial insights into network efficiency, identifying areas for performance improvements ahead of full deployment.
4.2 Leveraging Game Studios & IPs for Mass Adoption
Unlike many blockchain gaming chains that focus solely on technology, ZKcandy strengthens its content pipeline by fostering early adoption among existing game studios.
Key Adoption Strategies:
- Early game studio participation ensures a steady flow of new titles launching on ZKcandy.
- Live games & IPs in development reduce the risk of an empty ecosystem, a common issue for new gaming blockchains.
- Strong backing from leading investors and gaming firms such as Animoca further validates ZKcandy’s long-term market fit.
4.3 ZKcandy and the Future of Blockchain Gaming
Figure 5: What Will Drive Blockchain Gaming Forward?
According to a survey conducted by the Blockchain Gaming Association, the biggest challenges hindering blockchain gaming adoption include play-to-earn mechanics, game improvements, adoption by major gaming franchises, transaction costs, and major studio involvement. These barriers have slowed mainstream adoption, making it difficult for blockchain gaming to compete with traditional gaming ecosystems.
ZKcandy directly addresses these challenges, positioning itself as a complete and well-equipped gaming chain. With the iCandy Interactive partnership, ZKcandy is uniquely positioned to onboard AAA gaming studios, bridging the gap between Web2 and Web3 gaming. zkSync’s cutting-edge technology ensures low transaction fees, solving one of the industry’s biggest hurdles. Additionally, ZKcandy’s extensive partnerships across AI, gaming studios, digital identity solutions, and infrastructure providers create a robust and interconnected ecosystem.
5. Conclusion
ZKcandy has positioned itself as a strong contender in the blockchain gaming landscape by focusing on real adoption and practical integration rather than just technological advancements. While many gaming chains emphasize scalability and cost-efficiency, ZKcandy distinguishes itself by facilitating a seamless transition for traditional game developers into Web3, reducing entry barriers, and offering infrastructure that aligns with existing industry workflows.
Beyond its technical framework, ZKcandy has demonstrated tangible adoption with live testnet games and strategic industry collaborations. This early traction provides a solid foundation for long-term growth, making it one of the more market-ready blockchain gaming platforms at launch. Rather than relying on hype and speculation, ZKcandy focuses on functional gaming ecosystems and real user engagement.
As blockchain gaming continues to evolve, long-term success will be determined by adoption, sustainability, and user engagement beyond financial incentives. With its expanding ecosystem of gaming studios, infrastructure providers, and decentralized solutions, ZKcandy sets a precedent for a well-rounded gaming blockchain that prioritizes usability, accessibility, and industry alignment over mere technological superiority.
To explore what ZKcandy has built and see the latest updates, you can visit their official page:
- Website: https://zkcandy.io/
- Twitter: https://x.com/ZKcandyHQ
- Medium: https://zkcandy.medium.com/
