Privacy Guardian in the Web3.0 Era

Privacy is the fundamental right of everyone.

In 1993, Eric Hughes began his famous “Punk Manifesto” by stating:

Privacy is necessary for an open society in the electronic age. Privacy is not secrecy. A private matter is something one doesn’t want the whole world to know, but a secret matter is something one doesn’t want anybody to know. Privacy is the power to selectively reveal oneself to the world.

Privacy is essential in an open society in the electronic age. Privacy is not a secret. Someone doesn’t want the world to know something, that’s privacy; someone doesn’t want anyone to know something, that’s a secret. Privacy is the power to selectively present oneself to the world.

 Obviously, in the digital Internet era, privacy protection has become the most basic need and the most severe challenge faced by everyone. And is considered to be one of the important directions of Web3.0 .

Privacy coins such as Zcash have tried to make up for this market demand, but in the Web3 era, the privacy protection and privacy computing of smart contracts and off-chain data have become a new necessity.

However, as a “just-needed existence”, more and more leading VCs and developers are still entering the market. The competition in the privacy track has become increasingly fierce since the second half of 2021, and many privacy-focused protocols have emerged in both the protocol and application layers. projects, some of which try to protect data privacy (blockchain hybrid architecture) by using trusted execution environment (TEE), multi-party secure computing, etc., such as identity information, medical information, and some projects focus on the use of ZKP (Zero Knowledge Proof) data) and other solutions to protect transaction information and contract logic.

Based on the aforementioned introduction and trends, we have comprehensively sorted out the current Web3 privacy track, first of all, the privacy issues facing the current blockchain, mainstream privacy protection technologies, and then the main projects of the privacy track are divided into privacy computing networks, There are four major sections including privacy transaction network, privacy application, and privacy currency, and the main projects of each section are roughly sorted out.

Why is privacy protection so important?

Privacy protection is imminent for Whale users.

In the early morning of March 11, Juno, the Cosmos smart contract platform, initiated a proposal on the governance platform to upgrade the contract and delete the JUNO assets from the whale player account, and send all of them to the Juno community fund pool, with only a reasonable 50,000 JUNO reserved for the account. , the user actually pledged more than 3.1 million JUNOs, which means that about 3.05 million JUNOs will be confiscated by the project party. Based on the current price of $39.6, the asset is worth $120 million. This is the first time that a large household has been directly proposed to confiscate assets by the DAO . It is imminent that giant whale users can protect their privacy and other privacy in the future.

However, as an ordinary user, you still face very serious privacy protection issues.

Every time you eat at a restaurant and fill in your mobile phone number to order food by scanning the QR code, are you worried that your phone number will be collected and sold by an unknown centralized application development team? Even if a giant like Facebook (the predecessor of Meta) continues to leak the privacy of hundreds of millions of users, are you worried that your own personal information, private documents, etc. will be sold on the black market? Since the European GDPR was promulgated in 2018, more than 900 fines have been generated, with fines amounting to 1.54 billion euros.

When the transaction relationship between your blockchain accounts and your Twitter friend network is captured, you will worry that the capturer will associate your identity and blockchain account through certain topology analysis techniques. lead to the disclosure of personal asset information.

When Russia invaded Ukraine and the centralized exchange froze Russian users’ blockchain accounts, are you worried that your account may also be at risk of being frozen at any time?

The right to privacy is the basic right of everyone. If our assets are always exposed to the analysis panels of other institutions, and at the same time we are faced with the arbitrary abuse of private information, our freedom will eventually be greatly affected. It is hoped that through a comprehensive analysis of the Web3.0 privacy track, this article can help everyone understand and take certain measures to protect their assets.

Privacy protection goals

For the common Web3 privacy leakage problems, we have made a brief summary in the following table.

Privacy Guardians in the Web 3.0 Era

The history of blockchain privacy protection technology

Privacy protection technology is developing rapidly with the development of blockchain, here we will briefly sort out the context.

  • Blind signature: David Chaum proposed in 1983 that blind signature is different from general digital signature. The general idea of ​​digital signature is to generate a string of numbers that can only be generated by the sender and cannot be forged by others. This string of numbers is also valid for information. A valid proof of the authenticity of the message sent by the sender. The difference is that the signer of the blind signature does not know the specific content of the signed message, and only proves the authenticity of the signature at a certain point in the future (as a notary). Early David was used in E-Cash.
  • CryptoNote and Ring Signatures: CryptoNote (CryptoNight) is the originator of blockchain privacy technology. Conceptually, in a distributed network, CryptoNote uses traceable ring signature encryption technology to obfuscate messages between a group of nodes. Improvements to the CryptoNote protocol have been shown to yield high levels of anonymity at scalable levels of operation. Bytecoin was also a pioneer in adopting CryptoNote, released in 2012. Monero, which has the highest market value of anonymous coins, is also a cryptocurrency based on the CryptoNote protocol .
  • zk-SNARKS: The protocol behind ZCash is zk-SNARKs. zk-SNARKs are novel zero-knowledge encryption algorithms that allow one party (the prover) to prove to another party (the verifier) ​​that a statement is true without revealing its actual content. Since the release of Zcash, zk-SNARKs have been applied to different blockchain technologies. Based on Zcash , many other anonymous coins have been forked , including Komodo, Zcoin, Horizon, etc. The zk-SNARKs protocol supports almost half of the anonymous coins;
  • TEE Trusted Execution Environments (Trusted Execution Enviorments): Trusted Execution Environments are a recently popular method for introducing trusted computing into blockchains. For example, Intel’s Software Guard Extensions (SGX) TEE technology isolates code execution, remote attestation, secure configuration, secure storage of data, and trusted paths for code execution. APPs running in TEE are secured and almost impossible to be accessed by third parties. Related projects based on TEE technology include SecretNetwork, Oasis, Eigen Network and so on.
  • MimbleWimble protocol: The MimbleWimble protocol came out in 2016 to improve the scalability, privacy and substitutability of digital currencies. It combines multiple privacy protection technologies such as confidential transactions, transaction mixing and dandelion protocols to protect transaction amounts and transaction addresses. While protecting transaction privacy, the transaction size was simplified. Based on the MimbleWimble protocol, two twin star projects, Grin and Beam , were born , which were highly recognized by the market.
  • zk-STARKS: From trigonometry, one challenge of zk-SNARKs is that they are difficult to apply at scale, since the complexity of the proof grows linearly with the size of the database. zk-STARKs are a faster alternative to zk-SNARKs. zk-STARKs use simpler symmetric encryption, a collision-resistant hash function, and therefore do not require a trusted initial setup. At the same time, zk-STARKs eliminate the number-theoretic assumptions of zk-SNARKs, which require a lot of computing power and are easily attacked by quantum computers. This enables zk-STARKs to be generated quickly and quantum-resistant as they no longer use elliptic curves and exponential assumptions.

Project classification and typical implementation

Anonymous currency: Anonymous currency is a special blockchain token that hides the transaction amount and hides the sender and receiver during the transaction process. The typical ones are Dash based on CoinJoin technology, Monero based on ring signature and one-time address technology, Zcash based on zk-SNARKs technology, and Grin based on recognition protocol. From CoinJoin to commitment protocol and to zk-SNARKs, it basically represents the continuous development of zero-knowledge proof technology.

Privacy transaction network: The privacy transaction network mainly conducts privacy processing for on-chain transaction data (the type and quantity of currency held or traded), and supports users to conduct private transactions through zero-knowledge proof and other technologies, and supports the development of more in this protocol. type of privacy application. This type of project is mainly based on the general zero-knowledge proof virtual machine, currency mixing, and network obfuscation schemes. Typical zero-knowledge proof schemes include building ZKP virtual machines based on zero-knowledge virtual machines represented by Aztec to realize privacy protection such as contracts. Others include Dusk, Suterusu, Aleo, Espresso, Iron fish, and Zecrey, etc.; Including Tornado , CoinMixer, Onion Mixer, etc.; network obfuscation schemes, including XXNetwork, NYM, HOPR, etc.

Privacy protocols and applications: based on privacy transaction networks or privacy computing technologies, privacy protection for user assets, user transaction records, and user behaviors; such as privacy cross-chain bridges, emails, asset encryption, confidential transactions, etc.; typically include supporting assets Encryption and transaction encryption Railgun, privacy transaction and exchange protocol Eigen Network, privacy computing middleware Automata, cross-chain privacy protection middleware Raze Network, decentralized VPN Boring protocol, decentralized mail service DMail, etc.

Privacy computing network and protocol: Privacy computing protocol mainly protects privacy from data generation, collection, preservation, analysis, utilization, destruction and other links. Deep integration of data analysis and mining. This category usually relies on privacy computing technologies suitable for large-scale data processing and analysis, such as TEE, sMPC, and full homomorphism. Typical examples include Oasis, Platon, SecretNetwork, ALEPH ZERO, Ruby, etc.

Project Introduction

Below we will introduce the typical projects under each of the above categories, and introduce the typical privacy guardians under Web3.0.

anonymous currency

MONERO (XMR) 

The UTXO model is based on the CryptoNote protocol (proposed in 2012, Bytecoin) to confuse messages between a group of nodes.

Enable anonymous payments. CryptoNote uses one-time privacy addresses and ring signature technology. One-time privacy addresses, reducing the correlation of addresses between different transactions. The sender and receiver use the secret key to confirm whether the transaction is valid (One-time-stealth). This protocol significantly enhances the privacy security of the recipient. This scheme is a typical ECDH-based address hiding scheme.

Ring signatures enhance the sender’s privacy. Ring signatures send funds through a publicly announced ring address, ensuring that no one can know the real sender.

Dash(DASH)

It was first forked from Litecoin and supports InstantSend and PrivateSend. PrivateSend is a currency mixing technology based on CoinJoin.

PrivateSend uses CoinJoin. CoinJoin was first proposed by Gregory Maxwell in the Bitcoin Forum in 2013. The core idea is to place the input and output of multiple different users in the same transaction, so that the third It is difficult for the three parties to identify the corresponding relationship between input and output. At present, this kind of technical advantage has been very weak.

Zcash (ZEC

The early Bitcoin-based zk-SNARK was developed by Zooko Wilcox. Most of the code of Zcash is very similar to Bitcoin. It is a modified branch based on the Bitcoin code. It retains the original model of Bitcoin. For example, it is halved every 4 years, and the total amount is 21 million. Unlike BTC , it automatically hides transaction information (sender, receiver, transaction amount), and only those with the private key have permission to view the transaction information. Users have full control and can choose to provide viewing keys to others.

Grin (MWC)

Confidential Transactions, the concept of Confidential Transactions (CT) came out in 2013, first proposed by Blockstream CEO Adam Back, and then expanded and extended by Bitcoin developer Gregory Maxwell. In the first part, Maxwell outlined the problems of “homogenization” and “weak anonymity” mentioned, and proposed corresponding solutions. CT adopts the Pedersen commitment scheme to realize that only the transaction participants can know the specific value.

The Mimblewimble protocol (Andrew Poelstra, 2016) further extends CT, where both transaction addresses and amounts can be hidden, and the block size can be reduced through the Cut-Through mechanism.

MW is based on the commitment agreement to protect the amount. MW does not require an address during the entire transaction process, and uses the blinding factor as the private key.

Privacy Transaction Network

Aztec Network

Unlike most privacy networks, Aztec Network is a privacy transaction network built on Layer 2, and the mainnet was launched in November 2020. The Aztec protocol uses zero-knowledge proofs to enable encrypted transactions on Ethereum, allowing transaction logic to be verified while maintaining anonymity and privacy. Aztec Private Rollup hides Layer 1 DeFi transactions with just one Rollup . This privacy protection makes it impossible to track when users trade tokens, and which protocols are used to do so. In addition, Aztec combines homomorphic encryption, range proofs, and chooses a unique scheme for encrypting data, which can quickly and effectively verify zero-knowledge range proofs, reducing the gas cost of transactions on Ethereum. Even the Aztec DeFi bridge is capable of batching thousands of transactions per Rollup, saving at least 10x gas in various operations.

The Aztec team proposed the Plonk protocol, which provides the ZKP protocol for general circuits. Compared with the Sonic protocol (supporting a general-purpose scalable CRS, the proof size is fixed, but the verification cost is high), the Plonk protocol further reduces the proof size in Sonic by one times, and the proof time can be reduced by a factor of 5.

Aleo

Focus on building a developer-friendly privacy public chain .

Aleo uses zero-knowledge cryptography for privacy and programmability and uses it as the basis for a system called ZEXE (Zero-knowledge Execution). In ZEXE, users perform state transitions offline. This process produces a proof, which is tied into an on-chain transaction. This transaction updates the system state by consuming/creating on-chain records. Because the transaction contains only the proof, not the input to generate the proof, the system provides strong privacy guarantees. Like Ethereum, ZEXE can support smart contracts that enable users to interact or transfer value in predefined ways.

Provides a complete toolchain for developing privacy applications, including editor Aleo Studio, programming language LEO, and package manager Aleo Package Manager and zero-knowledge computing operating system snarkOS. Its core is to build a toolchain for developers to easily develop ZKP applications.

NYM

In 2021, it will complete a $13 million Series A financing and launch the Cosmos-based blockchain main network Nym in January 2022.

Nym, a Web3 privacy infrastructure, has released the Cosmos-based blockchain mainnet Nyx in January this year, and has generated the first block on Nyx for its Nym mainnet. Nym’s privacy protection focuses on applications, wallets and blockchain, and its main technology is a mixnet that provides privacy protection at the network level. Metadata communicated in any internet traffic is removed by the Nym Hybrid Network, whether broadcast over a peer-to-peer network in encrypted transactions, or for messages sent between clients or any other type of application. A hybrid network is a decentralized computer network arranged in a multi-layered format. Instead of sending messages over the internet, users convert message packets into encrypted “Sphinx packets” on their own devices. The “Sphinx Packet” format presents all packets as a uniform size, so it cannot be easily tracked. At each layer of a hybrid network, computers called “hybrid nodes” mix a user’s Internet traffic with that of other users. This makes it impossible for even the most sophisticated adversaries to monitor the entire network, as they can no longer track packets and analyze communication patterns.

Tornado Cash

Tornado Cash is a privacy transaction application implemented on Ethereum based on zero-knowledge proof, and it is currently the most popular privacy application on Ethereum. It uses zk-SNARK technology and is able to send ETH as well as ERC20 tokens (currently supports DAI, cDAI, USDC , USDT , WBTC) to any address in an untraceable manner. In actual use, the user needs to deposit the cryptocurrency into the privacy pool first and obtain a deposit certificate. In the future, the user can withdraw the previously deposited cryptocurrency to any address through the deposit certificate. Since the data transferred during the generation and use of the deposit certificate does not include the certificate itself, it can be ensured that the two transfers of deposit and withdrawal are completely independent. In addition, due to the existence of the relay service, the Ethereum address at the time of withdrawal does not even need to have the ETH to pay the transfer fee, that is, the withdrawal can be made to a completely blank address. Similar projects also include Onion Mixer and more.

Privacy Agreement and Application

Railgun 

The protocol can interact with most of the existing DeFi protocols, such as trading and lending, directly through the Ethereum network, without resorting to sidechains, Layer 2 or other blockchain networks. At the same time, Railgun provides a set of adapters (Adapt Modules) that can directly deploy Ethereum applications based on the privacy and anonymity system. At the same time, Railgun has also expanded to multiple public chains such as BSC, Solana , and Polygon , realizing multi-chain deployment.

Own Network

Eigen Network provides anonymous payment, private exchange and private computing network. Eigen Network has two products, EigenSecret, which focuses on personal asset security and privacy, and EigenShare, a private computing network.

Eigen Secret aims to provide a series of composable asset privacy protection tools through a self-hosted and modular contract wallet. The modularized smart contract wallet provides fine-grained management of personal assets. Its modular design enables Eigen’s contract wallet to quickly integrate with its coin mixer and privacy exchange to realize the privacy protection of personal assets, transactions and asset exchanges. EigenMixer is implemented using Plonk and TEE Relay, and Eigen Privacy Exchange uses ZKP and Mixer to hide address and order information. At present, some functions of EigenSecret have started public beta.

As a privacy computing network, EigenShare provides on-chain data privacy protection and distributed privacy computing through TEE and sMPC technologies. In the field of decentralized finance , transaction data under privacy protection fundamentally plays a role in countering the targeted sniping of MEV and DeFi.

Manta

Manta Network is a privacy protection network focused on DeFi in Polkadot ecology, providing complete end-to-end privacy protection in the form of Polkadot parachains. Its first product, called MantaSwap, is a privacy-focused decentralized exchange.

Manta released the testnet Dolphin Testnet in December last year and launched DolphinPay, a privacy payment function based on zkSNARK. DolphinPay can convert assets in the Polkadot ecosystem into privacy tokens, and support the transfer and redemption of privacy tokens.

On February 15, Manta Network announced that it has received a strategic investment from Binance Labs . Previously, Calamari Network, the first Kusama network of Manta Network, successfully captured a Kusama parachain with 218,000 KSM of community crowd-lending participation.

Automatic

Web3 Privacy Middleware.

Based on Intel SGX & Oblivious RAM technology. Oblivious RAM is mainly used to solve the side channel attack problem of Intel SGX.

At present, Automata Network will successively launch related privacy protection applications such as anonymous voting (Witness) and DEX anti-advance trading system

In 2021, on March 8, Singapore time, it announced the completion of a $1 million seed round of financing. Seed round participants included KR1, Alameda Research , IOSG Ventures , Divergence Capital and Genesis Block Ventures. This round of financing will be used for team expansion, including product development, technical research, and community operations, etc.

private computing network 

Plato  

Distributed privacy computing network, supporting a variety of complex privacy tasks such as AI. Connecting data owners, data users, algorithm developers and computing power providers, and plans to realize a general artificial intelligence network through three stages of privacy computing network, artificial intelligence market and collaborative artificial intelligence network, PlatON main network has been launched at the end of 2021 .

The PlatON privacy solution is mainly oriented to comprehensive data flow scenarios, solving the problems of data use rights and safe use, and supports two different types of privacy computing, one is secure multi-party computing, and the other is privacy outsourcing computing.

ALEPH ZERO 

Polkadot ecology is based on Substrate’s public chain. Its privacy layer Liminal is a native privacy framework that combines the advantages of ZK-SNARKs and sMPC to realize a general cross-chain privacy layer. Use zk-SNARKs to implement the verifiable part of the function on-chain, and use sMPC to perform off-chain computations. How to achieve privacy protection has not been disclosed.

Oasis 

Launched on November 19, 2020. The main body is divided into a consensus layer and a ParaTimes layer. The consensus layer is implemented based on Tendermint BFT. ParaTimes can be understood as a contract execution environment. In this contract execution environment, multiple contracts can be executed in parallel, and the status of the contracts can be customized. Therefore, this architecture can better extend the performance of the entire chain. The currently online Oasis-ETH ParaTime supports EVM. Supports private computing applications involving sensitive data processing.

Ruby protocol

Focus on building an encryption infrastructure for personal data monetization, realize data sharing and attribute encryption scheme based on CP-ABE ciphertext strategy based on functional encryption (FE), and provide data market, data pricing model and data copyright protection mechanism.

The Web3 grant project will complete a new round of financing of $7.3 million in 2022.

The above is our introduction to the current typical privacy protection projects, but it does not constitute investment advice. It is mainly analyzed from the aspect of industry research, please understand the readers.

Summarize

The privacy track is booming, especially the Ethereum ecosystem. In addition to many different sub-fields, covering payments, transactions, DEX, cross-chain bridges, contracts, data analysis and utilization, there have been many The privacy guardians of the company have injected infinite impetus into the strong development of the privacy track.

However, for the guardian, privacy protection itself should not only consider the privacy protection of individuals, but also further consider compatibility with necessary regulatory requirements. And the availability of protected data and the cost of privacy protection, especially the composability support with other protocols, is still not enough. I hope that the majority of guardians will work together to build a strong privacy protection infrastructure for Web3.0.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/privacy-guardian-in-the-web3-0-era/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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