The Privacy Deal Herd: Aztec, the L2 Omni-Privacy Protocol, Makes a Strong Breakthrough

The Aztec team believes that the blockchain should be 100 percent private. No one can track a user’s financial activity on the chain.

The Privacy Deal Herd: Aztec, the L2 Omni-Privacy Protocol, Makes a Strong Breakthrough

Thank you to Pan Zhixiong (ChainNews) for his corrections and suggestions on the article

Introduction

The term “cryptocurrency” can easily be misunderstood to mean that the technology is highly anonymous, but the unique data disclosure nature of blockchain can potentially expose the privacy of users. Few people can increase the privacy of their assets with the same skill as a hacker or expert, but instead incur additional costs. Multiple privacy solutions are fighting for the Holy Grail of privacy transactions, and Aztec, a solution that combines privacy, security, and low cost, has found a very clever entry point by starting with its product.
The Aztec team believes that the blockchain should be 100 percent private. No one can track a user’s financial activity on the chain. Currently, all financial products on ethereum have a privacy problem: all the user’s actions in the product will form a profile of the user’s behavior. These “breadcrumbs” of financial activity can attract malicious behavior, such as pre-emptive transactions that harm users and reduce the value of the decentralized financial system. So is it possible to use Layer2’s Layer 2 network scaling solution to solve the privacy protection and blockchain performance problem? To address this issue, the Aztec team has wired Aztec Private Rollup into the DeFi application to actively improve the privacy experience for users.

The Battle for the Holy Grail, the Battle for the King

Blockchain development so far, many projects are constantly trying to improve the privacy of blockchain, some of them try to use privacy-preserving hardware such as TEE Hardware for Privacy (Blockchain Hybrid Architecture), others focus on solutions using ZKP (Zero Proof of Knowledge Data) to create privacy independent chains and privacy tokens.

Aztec vs. Starkware/Zk-Sync
Starkware and ZK-Sync focus on solving the scaling problem and have a higher TPS (transactions per second) than Aztec. Since Aztec is a Layer2 solution that is particularly concerned with privacy issues in the current ethereum ecosystem. Aztec can integrate more Layer2 projects so that they can have privacy features.

Aztec vs. Tornado Cash
Tornado Cash is a middleware for privacy transactions based on zero-knowledge proofs implemented on Ether. It uses the zk-SNARK mechanism to be able to send ERC20 tokens to any address in an untraceable manner. The Aztec protocol provides the tools developers need to create the next generation of decentralized financial services, reconstructing digital assets with absolute privacy and private governance.

Tornado Cash is currently the most popular privacy application on Ether, but it has limited transaction processing power. For one, Tornado Cash is a set of smart contracts on Ether, while Aztec is a Layer2 protocol. That means Tornado Cash accomplishes anonymization by mixing token and wallet addresses, while Aztec provides programmable privacy contracts to build fully private applications, opening up new design space for privacy-focused applications. Second, in terms of computational transaction costs, Tornado Cash has expensive transaction costs, but Aztec can reduce them by moving the computational process off-chain and using the zero-knowledge proof technology Plonk (PLONK is a zero-knowledge proof technology that balances performance and security and is very influential in the field, with many other teams’ zero-knowledge proof (PLONK is a zero-knowledge proof technique that is very influential in the field, and many other teams have implemented zero-knowledge proof techniques based on PLONK, such as zkSync, another two-tier scaling scheme based on the ZK Rollup concept).

In summary, Aztec is a Rollup solution with a particular focus on privacy issues compared to other Layer2-based ZKPs. In addition, with the support of Noir language, Aztec can design new apps according to the application scenarios of different privacy needs, which will have a better chance to be adopted by the mainstream and even change the market of cryptocurrency apps. Aztec can handle larger volume of orders with higher efficiency and lower transaction fees than the current privacy apps such as Tornado Cash.

Aztec is a strong breakout and reimagines privacy transactions

The Aztec protocol uses zero-knowledge proofs to implement cryptographic transactions on Ether, enabling transaction logic to be verified while maintaining anonymous privacy. Aztec Private Rollup hides Layer 1 DeFi transactions with just one Rollup. This privacy protection makes it impossible to track when a user traded tokens and which protocols were used for the transaction.

We believe privacy is the most basic need for blockchain users. But in terms of the transparency of the current blockchain public chain Everything Behaves On-Chain Transparency Layer 1, all of the user’s on-chain actions are publicly traceable, which essentially discloses all of their transactions, which lacks privacy protection compared to traditional internet applications.

In addition to privacy issues, the high cost of Gas in the current market is a huge pain point and can be prohibitive to the average user. Aztec combines homomorphic encryption, range proofs, and chooses a unique scheme for encrypting data that can quickly and efficiently verify zero-knowledge range proofs, reducing the cost of gas for transactions on Ether. Even Aztec DeFi bridges are able to batch thousands of transactions per Rollup, saving at least 10x the gas cost in various operations.

Aztec’s positive impact on the DeFi world

Two months ago, the Aztec team made further improvements to Plonk and launched zk.money. the Aztec team is actively working on applying the privacy and scalability of ethereum to DeFi applications. Its use of Private Rollup will make transactions more private and reduce costs, thus providing a new experience for users using the DeFi app.

When the Aztec protocol goes live, Ether-based assets can be converted quickly and anonymously. 1:1 tokens will be tied to the original token on Aztec, allowing users to deposit 10,000 DAI in Aztec and convert it to 10,000 zkDai for anonymous DeFi activity. For DeFi, this event is significant. It means that once Aztec is fully landed, it will bring disruptive changes to the DeFi ecology and the ethereum ecology, such as.

  1. Private decentralized exchange: users will be able to trade different Aztec assets in complete secrecy, and any transaction quantity and price will not be available during the transaction. The decentralized exchange uses a relayer pattern and pre-defined Aztec DeX zero-knowledge proofs will enable the above functionality.
  2. Private weighted voting: In larger scale financial applications, mechanisms to guarantee voter privacy are critical, and the Aztec protocol makes this possible with proof of effective scope.
  3. Anonymous identity sharing scheme: In many scenarios requiring commitment and KYC, users using Aztec can prove their belonging to a group without revealing their identity, which has important application value; Aztec token standard can support such an identity identification system.

Since Satoshi Nakamoto’s 2008 white paper on Bitcoin, we can see that the crypto-punk world has evolved in a way that is actually very similar to the early Internet, with the same emphasis on privacy and anonymity. Today there is an increasingly strict regulatory regime around the world and an increasingly sophisticated internet infrastructure. The privacy that was widely touted in the early days of the Internet is now untenable. With the rise and rapid growth of the crypto world, the demand for privacy by the natives of the crypto world continues to grow. While most users are reluctant to expose the source and destination of their funds during transaction transfers, the openness of the blockchain’s entire network has led to the complete exposure of the transaction collusion between accounts.

The ethereum community spent five years educating the market and giving the world a glimpse of decentralized finance. Since then, many projects have started to focus on the track of privacy financial services. It is well known that ensuring the privacy of transactions is a basic requirement for many financial services. But since the ethereum blockchain itself can hardly provide such privacy protection, there has been no convincing alternative to traditional financial instruments in the crypto world.

We believe that the emergence of Aztec brings more imagination to privacy transactions. We believe that Aztec has great potential to address privacy transactions, and we believe that more and more innovative projects will continue to explore along this direction. Aztec shows us more possibilities for DeFi privacy transaction scaling solutions, and we will continue to focus on this niche and support it as we can at the right time.

Coming soon: Aztec 2.1+

New Assets
Over the next few weeks, Aztec will gradually rollup for new assets WBTC, BAT, AAVE, etc.

Increasing Caps
As the network grows, the Aztec team will gradually increase the transaction cap, which is currently set at 1 ETH for security purposes.

Main Network DeFi
The team will also upgrade the network to allow users to trade DeFi smoothly without leaving the Aztec network.

The Defi bridge zk.money will enable private transactions on existing DeFi applications, but it will also be possible to create a private app on Aztec Private Rollup via the Noir language, which will allow applications to be deployed on Aztec Rollup in full privacy.

Operating Tips

Transaction Types
Using Zk.Money, you can submit ETH to Aztec rollup contracts and perform the following actions.

Privacy

Send privately

Unblock Privacy

Emergency unprivacy (escape hatch)

Username
You can create an account with or without an ethereum address linked to your Aztec account, and start without an on-chain transaction to receive funds.

Aztec now also supports recognizable address aliases (@name) – but rest assured that your transaction activity is encrypted so that your financial transaction history is not made public.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/the-privacy-deal-herd-aztec-the-l2-omni-privacy-protocol-makes-a-strong-breakthrough/
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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