This article is contributed by the community and the author is Kenny Li, co-founder of Manta Network; Manta Network is a zero-knowledge proof Programmable privacy Layer 1 protocol supported by technology.

Abstract

Zero-knowledge proof (ZKP) is a cryptographic technology that allows Verify the authenticity of a piece of information without revealing the information itself. The technology is increasingly important for improving privacy and security in blockchain, cryptocurrency and decentralized finance (DeFi).

Many DeFi projects have applied ZKP to services such as lending and trading to provide users with better privacy and security. Many Layer 1 blockchains are adding ZKP-based rollups or zero-knowledge Ethereum Virtual Machine (zkEVM). As the adoption rate of zero-knowledge proof applications increases, it is expected to play an increasingly important role in the blockchain and Web3 fields.

How zero-knowledge proof works

Zero-knowledge proof method allows one party (the prover) to prove a statement to another party (the verifier) without revealing any additional information authenticity. This is particularly useful when there is sensitive information and the prover does not want the verifier to have access to the information.

The prover only needs to provide a mathematical proof that it can generate, and the verifier can use this proof to verify the truth of the statement, But this proof cannot be used to reconstruct the original information.

Suppose a tunnel has two entrances A and B. There is a locked door with a code blocking the only path, preventing people from walking from one end of the tunnel to the other (from A to B). You know the password and want to sell it to X who wants to enter the tunnel.

You want her to pay before she gets the password, but she wants you to prove you know the password first. In this case, she can stand in front of the tunnel and watch you walk into one of the entrances and come out of the other. This way she can be sure that you really know the password.

Why use zero-knowledge proof?

The reason why zero-knowledge proofs are sought after in the blockchain and cryptocurrency fields is because people are concerned about privacy in digital transactions. and security requirements are growing. With the rise of blockchain technology and cryptocurrencies, there is an increasing need for a method that can verify transactions without leaking sensitive information, and ZKP can meet this need.

In recent years, zero-knowledge proofs have attracted more attention and interest. Many protocols using ZKP have been launched, and mainstream blocks Chain has also developed zero-knowledge summarization. At the 2022 Developers Conference (DevCon), more than 20% of the discussions centered on zero-knowledge proof technology, indicating the popularity of this technology.

Key Development

A key development of zero-knowledge proof is that One specific type of ZKP is increasingly being used - succinct non-interactive zero-knowledge proofs (zk-SNARKs). zk-SNARK has been widely used in various DeFi Apps, such as private token transactions and shielded lending. Another major development in zero-knowledge proofs is a greater focus on scalability and performance through zero-knowledge roll-ups (zkRoll-ups).

zk-SNARK

Succinct non-interactive zero-knowledge proof (zk-SNARK) is a specific type of zero-knowledge proof that allows statements to be verified without revealing any information about the statement itself.

zk-SNARK has been used in applications such as Zcash and JP Morgan Chase’s blockchain-based payment system. Additionally, it is used to securely authenticate the client to the server.

zkRoll-up

zkRoll-up It is a blockchain network expansion solution that can aggregate a batch of multiple transactions into a larger single transaction and then record it on the blockchain. For example, BNB Chain launched the zkBNB test network based on the zkRoll-up architecture in 2022.

zkBNB can bundle hundreds of transactions into a batch of off-chain transactions and generate a cryptographic proof to prove the validity of all transactions . zkRoll-up strikes a balance between scalability and security for large-scale, low-latency setups.

Use cases of zero-knowledge proof

There are many use cases of zero-knowledge proof. Some of these have already been realized, while others are expected to become a reality in the future. Some of the main use cases for ZKP include:

Digital Identity Authentication

Zero-knowledge proofs can be used to verify user identity without revealing any sensitive personal information. This could be useful in applications such as digital voting systems where voter identity needs to be verified without compromising voter anonymity.

Privacy-protecting transactions

Enabling privacy-preserving transactions is one of the popular use cases of zero-knowledge proofs in the cryptocurrency space. For example, Manta Network’s MantaPay decentralized application (DApp) uses ZKP to enable users to trade on decentralized exchanges (DEX) without revealing their identities or transaction details. This way, users can still use the platform to conduct transactions while maintaining their privacy.

Block transactions

Zcash is a Cryptocurrency that uses zero-knowledge proofs to shield transactions. In such transactions, the sender and receiver addresses as well as the transaction amount can be shielded from the public blockchain, improving the privacy of user transactions.

Tokenization and ownership verification

Zero-knowledge proofs can also be used to tokenize assets and verify their proof of ownership. For example, a property can be tokenized and any party can verify its ownership without publicly revealing any other information.

Comply with global regulations

Some countries have strict regulations on collecting and sharing financial information, and decentralized platforms may have difficulty complying with these regulations. Zero-knowledge proofs can be used to share required information with regulators while keeping it confidential from other parties.

This will help bridge the gap between decentralized platforms and traditional financial institutions, reducing DeFi compliance in various jurisdictions the difficulty of internal regulations.

The future of zero-knowledge proof in the blockchain field

Future zero Proof of knowledge may lead to new technological innovations. Some noteworthy future developments related to ZKP include:

Cross-chain privacy layer

As the blockchain and DeFi ecosystem continue to develop and evolve, there is an increasing need for interoperability between different blockchain networks. The cross-chain privacy layer will allow people to conduct transactions on different blockchain networks while protecting the privacy of all parties involved.

zk-STARK

Another worthy one An area of concern is the increased use of zk-STARK (Zero-Knowledge Scalable Transparent Argument of Knowledge), a newer zero-knowledge proof that is considered more secure and efficient than zk-SNARK. Another advantage of zk-STARK compared to zk-SNARK is that its verification is faster and does not require a trusted setup.

User-friendly toolkit

Zero-knowledge proof technology can be complex, and not all development teams have expertise in this specific area of cryptography. User-friendly ZKP toolkits help bridge this gap, making the technology less accessible to developers from all backgrounds.

Limitations of zero-knowledge proof

Zero-knowledge proof provides a A unique way to verify the authenticity of information while protecting privacy, but this verification is not 100% accurate. Although the probability of verification when the prover lies is negligible, users should be aware that ZKP is not 100% reliable.

In addition, the algorithm used by zero-knowledge proof requires a large amount of computing resources. In some types of ZKPs, intensive computation is essential because they require many interactions between verifiers and provers. In other types of ZKP, the calculation amount of these algorithms is very large, which may limit the application of ZKP.

Conclusion

Zero-knowledge proofs are quickly gaining attention for their unique privacy-preserving properties and scalability potential. With the increasing application of this technology in the fields of blockchain, cryptocurrency and DeFi, it may bring more innovative services, thus greatly benefiting users. Zero-knowledge proofs are expected to play a key role in creating a safer, more private, and more efficient DApp ecosystem.

Extended reading

• Detailed explanation of zk-SNARK and zk-STARK

• Blockchain Layer 1 and Layer 2 expansion solutions