Thread by @mt_1466

@aztecnetwork is a PRIVACY-FOCUSED zero-knowledge rollup (ZKR) aiming to provide security, scalability, & privacy for #L222 blockchain transactions.

Don't think you need convincing about why financial privacy is important (hello #TornadoCash).

So, let's discuss Aztec's HOW...

@aztecnetwork Tech
Aztec leverages an in-house technology stack that focuses primarily on 2 overall protocol objectives: privacy & scalability.

ZKRs create large bundles of txs for off-chain computation in the form of cryptographic proofs known as SNARKs.
@jaosef

For a refresher...

https://twitter.com/913017695880253440/status/1498365176915054592

SNARKs allow someone to prove they have a particular piece of info without actually revealing the contents of the info.

Popularized by @zcash for enabling anonymous txs, zk tech provides scaling efficiencies for the rollup chain that are then submitted to the main chain.

This zk-SNARK approach is also called using validity proofs, i.e., highly complex cryptography to ensure all L2 transactions are valid and correct. The proof is submitted and checked by an on-chain L1 contract.

(image from @eli5_defi)

Privacy Design
Aztec intends to take its protocol one step further than just proofs.

It also intends to enable private, encrypted txs for users to use when on L2 applications. This means users will have the ability to leverage fully confidential #ETH txs.
@omw_to_the_moon

The proof, in this case, doubles as proving the validity of each transaction while also proving the encrypted data was obtained & executed correctly.

The data in this circumstance is only known by the two users engaged in a transaction.

To do this, Aztec uses a zk-zk-rollup design (two zero-knowledge proofs: one for the proof itself and one for the encrypted data).

A rollup circuit validates a batch of privacy proofs and then updates the existing database with the encrypted data. These proofs are created by a third party with computing resources (zk-rollups are extremely taxing & costly initially).

The key here is that the third party is trustless as they do not have access to the actual data. They only see the encrypted outputs from the Aztec proofs.

UTXO Transaction Model
Aztec leverages the well-known #UTXO transaction model to facilitate transactions on the platform similar to #Bitcoin and fellow rollup @fuellabs_ .
@camiinthisthang

Using UTXOs instead of an account/balance model provides users with far more privacy as it allows the UTXO to demonstrate a change in ownership over the note (i.e., what is being transacted, like 1 ETH).
@IAmNickDodson

Both the sender and the receiver know of the ownership change over the note, but no one else is required to.

What is a “note” in Aztec? They are a user’s balance within the Aztec network that only the user can access via their private key.
@EFDevcon

They can be thought of as traditional bank notes in legacy finance. Within the Aztec protocol, if Alice wants to send Bob 1 ETH, she “destroys” her original 1 ETH note, creates a new 1 ETH note, and sends it to Bob.
@Zac_Aztec

The destruction and creation of notes are how Aztec increases transactional privacy.

Most blockchains, like Ethereum, utilize a Merkle tree data architecture within their blocks for efficiency gains. Aztec, however, utilizes two Merkle trees in its architecture.
@jonwu_

One Merkle tree is for tracking the destruction of notes, and the second tracks the creation of notes.

Each Merkle tree has its own encryption algorithm that makes relating the destruction of one note to the creation of another (nearly) impossible!

This is extended further with the encryption of the transaction data, protecting the privacy of both parties from the third-party validator.

To prove the value of the transaction input is the same as the output, the sender can locally generate a zk-proof.
image @geeksforgeeks

That proof can validate that the state of the transaction value is the same without revealing the underlying data.

Scalability
Initially, ZKRs are more expensive than ORs due to the expensive computation associated with SNARKs.

However, when it comes to economies of scale, ZKRs are designed in a way that the price-per-tx diminishes with scale.

As transaction volumes increase, batches can be better organized and lower the overall transaction cost over time.

More users in each batch means the total cost of the batch gets amortized.

So, zk-rollups have initial fixed costs but they provide the ability to lower the marginal costs of transactions over time.

Think of it as a long-term ROI for the immense hardware required to initiate the process!

To go beyond Aztec tech, check out the full article for more on @aztecnetwork economics, transaction fees, adoption, vulnerabilities, and more!

cryptoeq.io/articles/aztec

@aztecnetwork That's a wrap!

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