Original - Odaily
Author - Nan Zhi
Yesterday,Crypto startup Nocturne Labs announces $6 million in seed funding, Bain Capital Crypto and Polychain Capital co-led the investment,Vitalik Buterin, Bankless Ventures, Hack VC, Robot Ventures, etc. participated in the investment.Nocturne Labs plans to launch the initial protocol on the mainnet in November this year。
Thanks to Buterin’s support, Nocturne has sparked curiosity and discussion within the community. Below, Odaily will reveal Nocturne’s vision, applications and principles in this article, as well as Vitalik’s vision and philosophy on the privacy track.
Project Vision and Application
Nocturne Labs’ vision is to bring private accounts to public blockchains, making privacy part of the core experience of the Ethereum ecosystem rather than an occasional tool.
Nocturne Labs claims: “Nocturne combines the best ideas from ZK, AA, and stealth addresses to create an abstraction of Ethereum accounts with built-in asset privacy.”
Nocturne Labs said it is about to launch the first generation of user-oriented products Private Vault, allowing users to:
Deposit or receive assets from external accounts (EOA) and contracts to private stealth addresses (i.e. send and receive funds anonymously);
Earn income from idle funds;
Transfer the initial funds for unconnected transactions.
The only way Vitalik envisions it
Vitalik has long continued to pay attention to the privacy track. In an AMA event held by Farcaster in October, when faced with the question What are you most worried about about the future of Ethereum? Vitalik said: Crypto industry stagnation, privacy, and open internet infrastructure are all possible reasons for failure.”
Direction of development
And in June of this year, VitalikZeng wrote an article proposing three development directions of the Ethereum ecosystem.: Ethereum needs to go through three major technology transitions from a young experimental technology to a mature technology stack that can truly bring an open, global and permissionless experience to ordinary users. The three directions are:
Moving to L2 scaling: everyone moving to (using) Rollups;
Move to secure wallets: Everyone moves to smart contract wallets;
Turn to privacy: Ensure privacy-preserving fund transfers are available, and ensure all other gadgets being developed (social recovery, identity, reputation) are privacy-preserving.
Regarding the third point, Vitalik said: “Ethereum fails without privacy, because making all transactions (and POAPs, etc.) public to almost anyone is too great a privacy sacrifice for many users, and everyone Moving to a centralized solution hides your data, at least to some extent.”
Landing scene
Privacy requires more addresses per user and may even change the types of addresses we deal with. If the stealth address proposal is widely adopted, then instead of just having a few addresses, or one address per Layer 2, users may have one address per transaction.
Vitalik said that other current privacy solutions, such as Tornado Cash, change the way assets are stored in a different way: many users funds are stored in the same smart contract (and therefore at the same address). To send funds to a specific user, the user will need an internal addressing system that relies on a privacy scheme.
Back in Farcaster’s October AMA, a community user asked Vitalik a question: “In future embedded wallets, users will ① have a new address for each new DApp, ② use one address for multiple DApps, ③ The spectrum is fairly even? (i.e., all of the above).”
Vitalik reiterated his thoughts: “Today we are at ②. I hope we are closer to ① because it is better for privacy. Sometimes it makes sense for different DApps to share wallets, but this should not be the default. We also need Continuously improving ZK transport to gain privacy from decoupled activities.
Nocturne followed the direction envisioned by Vitalik.
Nocturne Application
Nocturne is a highly composable Ethereum private account protocol. By using a mix of account abstractions and zero-knowledge proofs, Nocturne builds a private account layer that enables users to send, receive, and trade their funds without exposing their addresses. It is designed as a general-purpose system to easily build end-user products. Given this flexibility, the needs of privacy extremists and traditional users can be satisfied.
private vault
The simplest application a user can build on Nocturne is a private vault that allows users to store assets long-term, earn income on idle assets, and withdraw to a burner wallet for high-touch activities such as trading, all without Exposing a users address or balance. This product solves basic privacy issues and is the first product prepared by Nocturne V1.
Backend for private payments
Rather than paying directly to the recipients EOA address and making their transaction history public, users can simply send funds to Nocturne and set its owner to the recipients invisible address.
There is already a need for this functionality in salary payments in on-chain organizations today because people don’t want the whole world to know about their salary.
Privacy-protecting smart contract wallet
Nocturnes first generation product implements a standard wallet experience with built-in asset privacy to a limited extent by integrating the SDK into MetaMask Snap, allowing users to interact with Nocturne applications using MetaMask. In theory, Nocturne could build a wallet that allows users to transact as normal and invisibly integrate asset privacy into their on-chain interactions.
Overview of Nocturne Basic Principles
EIP-5564: Stealth address wallet
In September 2022, developer Nerolation on the Ethereum forum proposed EIP-5564 (Stealth Address Wallet), which is a very lightweight, user-friendly privacy solution.Stealth address wallet can protect the transaction amount and identity information of both parties in a transaction, the address is generated without revealing any information about the owner. Only the two parties to the transaction know the address, and only the recipient can verify whether he is the recipient, but it cannot be viewed by analysis tools (such as blockchain browsers).
However, there is a core problem with EIP-5664: the stealth address is Ethereums EOA address, and when using an EOA address as a stealth address, sending and receiving funds to these public addresses creates visible links. This makes it very difficult in practice to transfer assets received anonymously or to fund gas anonymously.
Nocturne solution: contract internal stealth address + hidden pool
Nocturne handles the above issues by combining an “in-contract” stealth address system with a stealth pool.
First, the stealth address scheme inside the contract means that users no longer have multiple temporary Ethereum addresses, but instead have multiple internal addresses within the Nocturne contract. These addresses are not Ethereum addresses per se, but identifiers specific to the Nocturne protocol. The main benefit of using a separate address scheme from Ethereum accounts is that user accounts can be represented and updated more flexibly.
A hidden pool is a protocol that allows funds to be accounted for and spent without exposing their owners. Users deposit funds into a hidden pool, and in return a note is generated that represents the users rights to their funds. The main fields on a note are the token address, the number of tokens the note contains, and the owners identifier (address). To spend the funds contained in the note, the user must possess a key corresponding to the owner field in the note in a zero-knowledge proof.
Conclusion
Nocturne has previously said: Arkham provides incentives for activities on the reconnaissance chain through its Intel-to-Earn program. Analytics tools are necessary, but will naturally exacerbate the erosion of privacy over time. This can have more serious consequences in the long run. As analytics tools improve and de-anonymization efforts increase, personal information and financial security will take a hit.
Nocturne further said: In its lawsuit against the U.S. Treasury Department regarding Tornado Cash sanctions, Coinbase made an argument: users who build on-chain privacy simply want to protect their assets. So when we talk about deanonymization being inevitable, that may be true, but only today. For crypto to be successful in the long term, privacy cannot be ignored.
Today, as the call to embrace regulation becomes increasingly louder, the wave of privacy development has not stopped. Where will the encryption industry go? Whether Vitaliks vision will eventually be realized remains to be verified by time and the competition among innovative players.
