The Tornado Cash incident raises questions: Do developers contribute to the protocol, should they be responsible for users who abuse the protocol?
On-chain privacy is especially important as developers and their open source code still lack clear guidance
This guide provides an overview of some existing and upcoming privacy chains as options for privacy-conscious developers to deploy with confidence
No developer wants to end up in jail for a few lines of code, but that happened to Alexey Pertsev. As an important contributor to Tornado Cash, Alexey Pertsev is suspected by the US government of helping criminals Money Laundry through the Ethereum Dapp Tornado Cash. The drama has sparked outcry around the world, with critics pointing out that developers have little control over how users use their code.
While the story may be more convoluted than it appears, it has sparked debate about on-chain privacy. Getting arrested for writing code sets a dangerous precedent, and what happened to Alexey Pertsev also poses a threat to developers' future contributions to open source software. Just imagine which developer is willing to be responsible for the users who use the code when they cannot control the user's behavior?
The community culture of the blockchain preaches openness, but this does not apply to data security and privacy. In some cases, full transparency is not necessary (see @GeneralRinaker's article).
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#1 Aztec Network
Aztec is the first Layer 2 privacy chain (privacy layer) using zero-knowledge proof on Ethereum. Smart contracts running on the Aztec chain can guarantee the privacy of assets. Users can protect the privacy of behaviors on the chain while trading, staking and making profits on the chain, and at the same time enjoy lower transaction fees.
Chain: Ethereum
Status: mainnet running
Underlying technology: PLONK, a two-layer transaction processing system developed through the zk-SNARK standard
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Github: https://github.com/AztecProtocol
Main application scenarios
Through the Aztec Connect privacy bridge, users can directly interact with Layer 1 DeFi applications on the Layer 2 privacy chain. Dapps on Layer 1 can refer to the Aztec Connect SDK to the protocol to profit from private transactions, such as zk.Money. As Aztec's main product, Aztec Connect allows users to use ETH and DAI for private transactions. Aztec Connect has approximately 255,000 transactions as of this writing.
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#2 Obscuro
As another Layer 2 privacy solution of Ethereum, Obscuro is designed to optimally handle MEV issues while ensuring the privacy of transactions and contract states. Because of its dual use of Optimistic and Zero-Knowledge Proofs, Obscuro claims to be "the optimal solution between Optimistic and Zero-Knowledge Proofs."
Chain: Ethereum
Status: Testnet
Underlying technology: Intel SGX technology runs EVM on TEE hardware. In essence, it can be understood as a black box in the CPU, and users can perform completely private calculations in the black box.
Architecture: The Obscuro network has two types of nodes. Aggregators are responsible for validating all encrypted transactions, packaging them and sending them back to Ethereum. Verifiers have similar responsibilities, but are hardware-based and operate outside of the Aggregators network. Having two kinds of nodes at the same time makes the Obscuro platform more decentralized and more secure.
Main application scenarios
Since Obscuro is still in the testnet stage, there are currently no products to introduce. However, the platform offers many possible application scenarios, including DeFi privacy and Web 3 strategy games.
Obscuro is one of the few privacy solutions that allows developers to develop smart contracts using Solidity. Solidity is known to be used more than Rust among Web 3 developers. In contrast, other solutions mentioned in this article are mainly based on the rust language.
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#3 Secret Network
As an OG in the industry, Secret Network was launched in September 2020 and is known as the first network with privacy smart contracts at the Layer1 level. The Secret Network is built with the Cosmos Tendermint SDK, and its smart contracts are written in Rust through the CosmWasm toolkit.
Chains: Cosmos IBC, Ethereum, Binance Chain and Monero Bridge
Status: mainnet running
Underlying technology: Similar to Obscuro, Secret Network uses Intel SGX for computing on TEE. The protocol code is divided into two parts: the trusted part (sensitive information) and the untrusted part (the rest of the code).
Architecture: Currently, a team of 50 validators secures the network using the Tendermint consensus engine, a bft-based proof-of-stake mechanism. Validators are responsible for verifying transactions and proposing blocks to the chain by staking SCRT, earning income in the process. Authorization is issued by a non-verifier.
Github：https://github.com/scrtlabs
Main application scenarios
Secret Network currently has a rich ecology, covering more than 20 Dapps and more than 100 developers. As a Cosmos Tendermint SDK project, the chain can interoperate with other parts of the Cosmos ecosystem, especially after implementing IBC. Essentially, Secret Network allows the entire Cosmos IBC ecosystem to be equipped with privacy features.
Because there are sufficient documents and tools around the Cosmos development framework, the Secret Network is relatively more friendly to Web 3 developers.
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#4 Aleo
Based on the latest development of ZK cryptography, Aleo is called the first decentralized and open source protocol. Aleo allows for private and programmable applications. Users can allow third parties (including smart contracts) to verify data without revealing transaction information, while allowing users to choose to disclose some information at different levels of transactions. This is useful for interacting and building between composable Dapps to create a broader ecosystem.
Chain: Aleo
Status: Testnet
Underlying technology: The consensus mechanism of the platform is PoSW, which means that transactions in each block will generate ZK proofs, which are derived from the Bitcoin SHA algorithm. However, unlike arbitrary hash functions, the underlying computation is implemented through PoW. Essentially, it allows users to verify state with minimal computing power.
Architecture: Aleo combines Ethereum's programmability and account model with Zcash's private transaction design to achieve complete on-chain privacy.
Github：https://github.com/AleoHQ
Main application scenarios
Aleo provides a DSL called Leo to privacy contracts. Inspired by Rust, Leo is mainly used to develop privacy applications and incorporate ZK lines. Although it is a dedicated language, its developer documentation is comprehensive, concise, and clear.
Other developer tools include Aleo Studio, Aleo Package Manager and Aleo Explorer.
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#5 Aleph Zero
The last project is also newer to the industry - Aleph Zero. Built on Polkadot's Substrate technology and a peer-reviewed consensus protocol, Aleph Zero claims to provide instant liquidation, speed, as well as scalability and security. Once fully launched, the network's privacy framework will eventually be available on all major chains.
Chain: Substrate, Ethereum, Polkadot
Status: Testnet
Underlying technology: The project has a unique solution for privacy contracts, combining zero-knowledge proof and sMPC. ZK-SNARKS are used to exchange user-secure and anonymized keys. sMPCs are responsible for protecting data between different computers, and such computers need to reach a consensus and pass permission before they can access the data.
Architecture: Aleph Zero's custom algorithm combines PoS variants and DAG technology. The PoS consensus mechanism verifies the status of blocks through rotating validators. DAG is used as an intermediate data layer, allowing faster transaction speeds and higher throughput, which fundamentally reduces transaction costs.
Main application scenarios
The first product on Aleph Zero is Common, a decentralized exchange with its own wallet, and uses a decentralized dark pool to prevent frontrunning. Front-running occurs when users know that future transactions will affect prices through internal information, and place transactions in the queue to arbitrage.
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Substrate's own growing developer community and interoperability system is a major factor in enabling Aleph Zero's success. The experience of the core team itself and its partners is also one of the factors for Aleph Zero's future success. In addition, the ease of operation of the protocol itself will also attract more merchants and users to join its ecology.
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Regardless of the method or mechanism design, the privacy chain starts with whether developers can choose private transactions as the core. In the privacy track, the innovation brought about by homogeneous competition will promote the birth of new projects in the privacy chain track and the iteration of existing projects. Web 3 developers should have the option to retain some level of privacy to empower developers to write code that pushes boundaries and drives blockchain innovation.
article author
Thanks to Xarl (Rajapandian), a technical researcher at Arcane Group, for his research contributions. He has deep technical development and practical experience in privacy protection, code security, etc. Other colleagues in the team including Frank, OxCryptolee, Don, Sue, Charles, etc. also provided compilation and correction support for the Chinese version of this article
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