The Rapid Rise of ZK (Zero-Knowledge) Assets and Protocols: How Network Enhancements and Institutional Embrace Impact Investments

In 2025, the zero-knowledge (ZK) protocol sector has undergone a dramatic transformation, fueled by major network enhancements and a notable rise in institutional participation. These advancements go beyond technical achievements—they are fundamentally altering how investors view ZK-related assets. As scalability, privacy, and regulatory compliance in blockchain technology increasingly intersect, protocols are becoming the backbone for both decentralized finance (DeFi) and large-scale enterprise applications. This report examines the technical progress and institutional momentum driving ZK’s rapid growth, as well as what this means for investors.

Network Upgrades: Addressing the Scalability Challenge

The Atlas Upgrade introduced by ZKsync in 2025 demonstrates how ZK protocols are tackling the longstanding blockchain scalability dilemma. With the launch of the Atlas Sequencer and Airbender Prover,

now supports transaction throughput between 15,000 and 43,000 TPS and achieves finality in as little as 1 to 500 milliseconds . These breakthroughs have brought proof generation costs down to $0.0001 per transaction, reducing gas fees by 70% compared to 2023 . This level of efficiency has enabled new applications such as tokenized assets and cross-chain settlements, which demand both speed and low costs.

Alongside ZKsync’s achievements, Polygon zkEVM has committed $1 billion to advancing ZKP adoption, using EVM compatibility to facilitate the smooth transition of

projects . At the same time, StarkNet handles 10 million transactions each month for platforms such as , delivering 90% lower gas fees and nearly instant trade settlements . Collectively, these improvements are setting up ZK Layer-2 solutions for a projected 60.7% compound annual growth rate, with the sector expected to reach $90 billion in value by 2031 .

Institutional Adoption: Turning Compliance into Opportunity

More institutions are turning to ZK protocols as they seek solutions that offer privacy, scalability, and regulatory alignment. Deutsche Bank has adopted ZKsync for cross-chain settlements, benefiting from its EVM compatibility and lower operational expenses

. In a similar vein, Walmart's Food Trust leverages ZKP-based technology to reduce food safety incident response from weeks to seconds, while HSBC's Orion Platform has cut post-trade reconciliation by 60% .

Protocols focused on privacy, such as Aztec Network and Mina Protocol, are also gaining momentum. Aztec allows institutions to conduct confidential DeFi transactions, and Mina’s compact 22KB blockchain makes it accessible for devices with limited resources

. These examples highlight the adaptability of ZKP in solving practical issues, from regulatory compliance in finance to transparency in supply chains.

Market Trends and Investment Outlook

The ZKP industry, valued at $1.28 billion in 2024, is forecasted to grow to $7.59 billion by 2033, representing a 22.1% annual growth rate

. This growth is being driven by $28 billion in total value locked within ZK rollups and $15 billion in Bitcoin ETF allocations directed at ZK-related projects . The 50% rise in ZK token value during 2025 further demonstrates investor optimism about the sector’s future .

For those investing in the space, the most promising protocols are those that blend technical excellence with strong enterprise uptake. The Atlas Upgrade by ZKsync, for example, not only enhances scalability but also meets institutional needs for interoperability and cost savings. Likewise, initiatives like Quartz KYC, which uses ZKP to cut compliance times from 10 days to just 3 hours, illustrate the technology’s importance in regulated sectors

.

Risks and Key Considerations

Despite the positive outlook, investors should proceed carefully. Uncertainty in regulations, especially regarding tokenized assets and cross-chain transactions, could lead to market fluctuations. Furthermore, the fast pace of technological change means that protocols lacking strong technical foundations may lose relevance. Spreading investments across various ZK ecosystems—including EVM-compatible platforms (like ZKsync and Polygon) and privacy-centric networks (such as Aztec and Mina)—can help manage these risks.

Conclusion

The rapid growth in ZK protocols and assets is a response to genuine demand for infrastructure that is scalable, private, and compliant—not just market speculation. As more organizations and businesses implement ZKP-based solutions, investment opportunities will increasingly favor protocols that offer both technical breakthroughs and real-world utility. For investors, the coming 12 to 24 months are a crucial period to take advantage of this shift, provided they focus on projects with demonstrated institutional support and clear upgrade strategies.