zero-knowledge

Ethereum scaling firm =nil; Foundation introduces security-focused zkEVM

A new Ethereum zero-knowledge proof compiler could address security concerns identified in different zkEVM solutions.

Zero-knowledge technology firm =nil; Foundation has developed a new type-1 zero-knowledge Ethereum Virtual Machine (zkEVM) compiler to address security concerns identified in similar ZK-powered Ethereum scaling solutions.

Speaking exclusively to Cointelegraph, =nil; Foundation CEO and co-founder Misha Komarov says the technology prioritizes security and allows high-level programming code to be compiled automatically into Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARKS) circuits.

The firm’s zkEVM is designed to be compatible with evmone, which is a C++ version of Ethereum’s base execution environment. The key takeaway is that the code of applications is processed and rolled up as proofs submitted to Ethereum in the same format as its EVM.

Privacy, scaling drives use cases for zero-knowledge technology

Zero-knowledge technology has seen significant growth in adoption within the blockchain space in 2023, according to an inaugural quarterly report published by ZKValidator.

A quarterly report focused on zero-knowledge (ZK) technology indicates that privacy, scaling and identity solutions are significant drivers of adoption in the blockchain space.

Validator service provider ZKValidator’s report titled “The State of ZK” explores insights from the zero-knowledge space, highlighting major and emerging use cases, research, product launches and notable investment rounds.

The key takeaway focuses on use cases of zero-knowledge proofs (ZK-proofs). The cryptographic method allows one party to verify data or a statement without exposing the information. Privacy stands out as the industry’s most significant driver of adoption at 12.9%. Scaling is the second most prominent use case for zero-knowledge technology, with 9.46%.

Identity solutions and new zero-knowledge use cases rank third and fourth, indicating that the blockchain ecosystem is interested in exploring how zero-knowledge technology can be applied in identity management and other novel applications. Zero-knowledge machine learning (ZK-ML) was also identified as the space’s most attractive new use case.

Insights were driven by the company’s work with industry participants, including ZK Hack, zkSummit, rhino.fi, Geometry and University College London. ZKValidator also gleaned data and information working with participants in the production and management of the Zero Knowledge Summit 9 in Lisbon on April 4.

The launch of Polygon and zkSync’s zero-knowledge Ethereum Virtual Machine’s (zkEVM) was also highlighted in zkValidator’s report, with key data from the two Ethereum scaling protocols.

*A comparison of zkSync Era and Polygon zkEVM users and total value locked since their mainnet launches in March 2023. Source: The State of ZK: Q1 2023*

Having launched over a month ago, zkSync Era has attracted more daily active users than Polygon’s zkEVM. The report speculates that rumors of a possible zkSync airdrop later in 2023 may be a reason for the gulf in user numbers between the two zkEVMs.

The report also covers the development of new products, including Geometry’s Semacaulk, a new zero-knowledge set membership protocol that offers gas savings over Merkle-tree constructions, while ensuring proofs can be generated quickly and verified for roughly the same gas cost.

2022’s $7 million ZPrize competition helped drive innovation of ZK technology, with multiscalar multiplication (MSM) on Android mobile devices stemming from the development competition aimed at fostering ZK solutions. According to ZKValidator’s report, MSM improved proof generation time from 2.4 seconds to around half a second, making mobile payments in ZK easier.

The report also mentioned a paper proposing a fast GPU-accelerated zero-knowledge proof system that reduces proof generation time in ZK-proofs by leveraging hardware similarities of GPUs. Graphics processing units (GPUs) have become highly useful hardware for cryptocurrency miners, given its ability to process data simultaneously, and its use for machine learning, video editing and gaming.

Various other zero-knowledge projects were also identified in the fields of decentralized identity, interoperability and payments within the Ethereum and Polkadot ecosystems in 2023.

This includes Telepathy, a Zero-Knowledge Succinct Non-interactive Argument of Knowledge (zk-SNARK) interoperability protocol for Ethereum. The protocol allows users to read Ethereum state on any chain while retaining the security of Ethereum’s light client protocol.

Sismo Connect was also mentioned, which is a privacy-preserving single sign-on method for applications on both Web2 and Web3. The technology allows developers to implement ZK technology in their applications.

Lastly, the Manta Network also expanded its ZK capabilities, allowing for privacy support for nonfungible tokens and soul-bound tokens.

Investments were also highlighted, with Ethereum research and development firm The =nil; Foundation raising $22 million to continue the development of the Proof Marketplace. The solution allows layer-1 and layer-2 blockchains to outsource the production of ZK-proofs.

Zk-proof developer Proven raised $15.8 million in a seed round, while Polyhedra Network raised $10 million for its blockchain interoperability infrastructure platform.

Zero-knowledge rollups have been in the spotlight throughout the first quarter of 2023. Polygon released its open-source zkEVM Ethereum scaling technology to mainnet on March 27, while several Ethereum decentralized finance protocols have adopted zkSync since its alpha launch in March 2023.

Magazine: ZK-rollups are ‘the endgame’ for scaling blockchains: Polygon Miden founder

ConsenSys launches zkEVM private beta testnet

The software has received over 150,000 signups so far.

Web3 ecosystem developer ConsenSys unveiled its zero-knowledge Ethereum Virtual Machine (zkEVM) network for private beta testing via a blog post on Dec. 13. Designed and operated by ConsenSys, developers can deploy and manage decentralized applications using tools such as MetaMask, Truffle and Infura as if they were using the EVM directly. In addition, users can bridge assets between the Goerli testnet and the zkEVM to test their smart contracts and decentralized applications, or DApps.

“Testnet participants can also bridge tokens, transfer tokens, and interact with deployed dApps listed on our upcoming ecosystem portal page. We intend to learn whether the developer experience of the zkEVM has the potential to accelerate innovation in Web3 and will be evaluating feedback from the community to inform our next step.”

For years, ConsenSys has been working to wrap EVM computation in zero-knowledge proofs to create a zkEVM, as opposed to creating zk-Rollups on networks separate from the EVM. Zero-knowledge technology verifies transactions on a separate layer and sends computation back to Ethereum without sending back the entire data. By simply providing proof that everything was correctly computed on layer 2 and putting a succinct proof back to the blockchain, Ethereum developers estimate that rollup solutions such as Optimism can increase scalability by upward of 100x.

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Roll up, roll up!

We’re proud to announce the private beta release of ConsenSys’ zkEVM testnet, available on @Infura_io

Sign up below: https://t.co/hKtsvoPaTG

— ConsenSys (@ConsenSys) December 13, 2022

User onboarding for the new ConsenSys zkEVM will begin in January 2023. ConsenSys said there are currently no details regarding how early testers will be rewarded or if there will be a newly issued token tied to the zkEVM.

Zero-knowledge KYC could solve the privacy vs compliance conundrum — VC partner

Zero-knowledge Know Your Customer (KYC) would allow businesses to adhere to strict AML/CTF rules while ensuring customer privacy.

As the Web3 industry matures, zero-knowledge Know Your Customer (zkKYC) is becoming more widely discussed as a means to comply with strict financial regulations while maintaining user privacy, according to the partner of a venture capital firm.

In an interview with Cointelegraph, John Henderson, partner at Australian-based venture capital firm Airtree Ventures, said the successful implementation of a zkKYC system would be “great news for both regulators and consumers” and could increase cryptocurrency adoption:

“Institutions and retail users are more likely to participate in DeFi if they can be confident that they are complying with their AML/CTF obligations.”

Henderson explained a zkKYC system would allow users to prove certain things about themselves to service providers without having to divulge personally identifying data such as their names or identification documents.

In theory, the sharing of that information would be enough to satisfy Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulatory requirements placed on the crypto industry:

“[The system] involves a trusted third party validating my personal information and then issuing a cryptographic proof to my personal wallet, which I could then choose to share, or share attributes of, with financial service providers.”

The benefit of such an approach is that no personally identifying information could be leaked in the event of a security breach of a service provider such as a crypto exchange, Henderson claims, with the identification documents only recoverable when required by authorities.

Many in the crypto community have been critical of the way their personally identifiable information has been handled by some crypto platforms.

Recently, the community shared their concerns after court documents published on Oct. 5 publicly disclosed the personal information and transaction history of thousands of Celsius customers, with some warning they could be used to dox users.

Calls to improve privacy for individuals were also loudly sounded at the September Converge22 conference in San Francisco.

Jeremy Allaire, CEO of stablecoin issuer Circle, expressed the need for “advancements” in technologies that prove identities and credentials while simultaneously ensuring individuals’ privacy.

Henderson however admitted that “storage of sensitive information is still an unsolved problem,” sharing two ideas on how the management of such information could take place:

“One idea would be to have trusted entities hold identity documents off-chain and port proof of identity on-chain, without the original documents. Another idea is to sign a wallet transaction with a regulatory institution, who would then register that account with an identity.”

Despite the challenge, Henderson was adamant a zkKYC protocol will form the “building blocks of on-chain reputation scores” allowing “more useful” financial products and services.

“My priority is onboarding the next hundred million users to crypto,” he said, “If we want to achieve internet scale, we need a solution for AML/CTF compliance.”

Airtree Ventures led a $4.7 million seed round into ReputationDAO on April 13, a decentralized autonomous organization that aims to provide a financial reputation and identity service for decentralized finance (DeFi).