Zero-knowledge proofs explained: SNARKs, STARKs and Manta's private DeFi
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Market since$MANTA−97%since listingHow it played out ↓Covers ZK proof properties, SNARK versus STARK trade-offs (trusted setup, post-quantum risk, scalability), then Manta's DAP and DAX private payments and AMM, and closes with a map of ZK rollups on Ethereum.
Key claims
SNARKs need a trusted setup and are not post-quantum resistant, STARKs avoid the setup
Manta combines DAP private payments and DAX private AMM
zkSync (SNARKs) and StarkWare (STARKs) lead Ethereum ZK rollups
0/ Because they have important applications in privacy & scaling, let’s have a look at zero knowledge proof technologies like zkSNARKs, zkSTARKs and how projects like @MantaNetwork leverage zk-tech to enable private #DeFi or #PriFi 🥷
A mega-🧵 on zk stuff & $MANTA (0/27)
1/ Let’s start with the basics. A zero-knowledge proof of some statement must basically satisfy three properties…
2/ …Completeness: if the statement is true, a honest prover will successfully convince the honest verifier of the validity of the statement
3/ …Soundness: if the statement is false, a cheating prover will not be able to convince an honest verifier that the statement is valid
4/ …Zero-knowledge: if a statement is true, verifiers don’t learn anything other about the statement than the fact that the statement is true
5/ So, in conclusion the main objective of these proofs is to reveal as little data as possible between the two parties. This comes with the added benefits of less data needing to be transmitted/stored
6/ Today, there are two zero-knowledge proof technologies that are being implemented with various blockchain solutions: zkSNARKs & zkSTARKs
7/ Both #zkSNARKs and #zkSTARKs are implementations of non-interactive zk proofs, meaning a prover does not disclose the data to a verifier, while it being non-interactive means that a prover only sends a single message to a verifier. Hence, there is no back & forth communication
8/ Let’s have a look at SNARKs. When talking about zk-SNARK proofs, SNARK stands for "Zero Knowledge Succinct Non-Interactive Argument of Knowledge". This concept plays an important role in #zkSNARK systems. $ZEC was the first widely available application of zkSNARKs
9/ “Succinct” means that the proofs are small in size & can be quickly verified. “Non-interactive” means that little to no interaction is needed between prover & verifier. "Argument" is mostly a formalism, while "knowledge" refers to the prover actually having the evidence
10/ There are some downsides to existing #zkSNARK implementations. A potential issue in the future might arise from the fact that they are not post-quantum resistant
11/ Another issue with #SNARKs is that they usually require a trusted party to initially setup the zk proof system which bears some degree of vulnerability towards this trusted party, that could potentially compromise the privacy of the entire system
12/ @Zcash for example, that basically pioneered zkSNARKs, had an initial setup phase, which is known as the Parameter Generation Ceremony
13/ The trust problem is already being addressed by projects like @zksync though. By introducing a universal trusted setup for #zkSync v1, they achieve improved security compared to previous application-specific setups
14/ Let’s have a look at #zkSTARKs (Zero-Knowledge Scalable Transparent Arguments of Knowledge). STARKs also arre a type of proof technology that enables users to share validated data / perform computations with a third party...
15/ ...without the data or computation being revealed to the third-party, (a.k.a. zero-knowledge proof) in a way that is publicly verifiable
16/ The definition shows, STARKs are closely related to SNARKs. In a context of zk-systems, zkSTARKs improve upon the technology though, by removing the need for a trusted setup. zkSTARKs are also said to be more scalable in terms of computational speed/size compared to zkSNARKs
17/ There are important applications of zero knowledge proof technology in the privacy space. One protocol that I’ve already looked at in detail is @DuskFoundation
x.com/mrkusama_eth/status/1486103606201921551
18/ $DUSK provides a regulatory compliant smart contract layer for the #RegDeFi ecosystem by leveraging on PLONK zk-tech
Learn more: vitalik.ca/general/2019/09/22/plonk.html
19/ Another project I like a lot that leverages on zero knowledge proof technology is @MantaNetwork. $MANTA is a substrate-based privacy-preserving #DeFi stack powered by zkSNARKs
20/ $MANTA provides a blockchain network that allows users to mint private coins/tokens with stable coins or other base tokens at a ratio of 1:1. The private tokens can then be traded on @MantaNetwork’s privacy preserving AMM
21/ @MantaNetwork mainly consists of two protocols…
22/ …The Decentralized Anonymous Payment (DAP) protocol is a zkSNARK based transactional layer, that enables users to bridge in $DOT & $KSM ecosystem assets as private tokens, pay with privacy tokens and redeem base coins from private tokens when bridging out
23/ …The Decentralized Anonymous Exchange (DAX) protocol is a zkSNARK-based AMM DEX implementation on $MANTA network. It allows users to anonymously trade private tokens, providing users with a private alternative to traditional AMMs
24/ @MantaNetwork’s roadmap also includes decentralized private lending protocols in the form of a non-custodial lending platform where users can deposit anonymously & borrow private coins, as well as private synthetic asset protocols. The $MANTA ecosystem will be huge
25/ Currently, Manta is the only private #DeFi product that will combine cross-chain interoperability assets with a security relying on cryptography rather than hardware
26/ But aside privacy, zero knowledge proofs also have important applications in scaling the $ETH base layer through what is referred to as zk-rollups. A thread comparing zk-rollups to optimistic #rollups will follow, for now we will focus on a quick ecosystem overview
27/ In the $ETH rollup space, there are currently two leaders
-@zksync using zkSNARKs,
-@StarkWareLtd using zkSTARKs
But there is more
-@loopringorg, @aztecnetwork & @0xPolygon Hermez (SNARKs)
-@0xPolygon Miden (STARKs)
You can find a full list on zkrollups.xyz
Very interesting read: x.com/pseudotheos/status/1483429001230176256
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