Aleo deep dive: a private and programmable zk L1, ZEC and ETH hybrid
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Mega-thread on Aleo as a natively private and programmable L1. Covers ZEXE offline execution with on-chain proofs, the zkCloud, a private DEX example, the Leo language, Aleo Studio, package manager and snarkOS.
Key claims
Transactions carry only proofs, not the inputs that generated them
Execution happens off-chain in the zkCloud and is proven on-chain
Aleo is positioned as a hybrid of ZEC privacy and ETH programmability
0/ @AleoHQ is a #zk-powered L1 blockchain that natively supports scalable and private applications 🥷✨
this $ETH - $ZEC hybrid is definitely one of the new kids on the block to watch in 2023 👀
mega-🧵 on $ALEO (0/29) 👇
1/ first of all, a quick reminder why #privacy matters
x.com/expctchaos/status/1484546235549822978
2/ but let's dive into @AleoHQ
I really like to think of @AleoHQ as a $ZEC -$ETH hybrid
x.com/expctchaos/status/1609127261042769922
3/ until now, users have had to choose between the two
#privacy or #programmability
@zcash for example gives users complete privacy, but only limited programmability
@ethereum on the other hand provides powerful programmability, but only very limited privacy
4/ @AleoHQ is the first #decentralized, open-source protocol to provide a both private & programmable base layer for applications
a protocol that ensures that users are not exploited, while enabling powerful & composable on-chain applications
or, a hybrid of $ZEC & $ETH
5/ but let's take a closer look. How does @AleoHQ enable privacy & programmability?
@AleoHQ utilizes zero knowledge proofs to provide both #privacy and programmability
6/ as we already know, zero knowledge proofs allow third parties to verify the truth of a piece of information without requiring the direct revelation of the information
x.com/expctchaos/status/1611398681890283521
7/ more specifically, @AleoHQ leverages zk technology in a system called ZEXE (Zero Knowledge EXEcution)
in #ZEXE, users are able to execute state transitions offline, producing a proof that is bundled into an on-chain transaction
8/ this tx updates the state of the system by consuming or creating on-chain records.
this system allows #Aleo to offer strong privacy guarantees, similar to those found in @zcash, as the txs only contain the proof and not the inputs that generated it
x.com/expctchaos/status/1611398695395917824
9/ additionally, @Aleo's ZEXE enables the platform to support smart contracts, similar to $ETH, allowing users to interact with natively private applications
10/ but wait, did I just say that computation was off-chain? Isn't this a layer 1?
yes it is
but transactions happen in the #zkCloud
11/ wtf is the #zkCloud you ask?
zkCloud is an off-chain, trustless execution environment where individual entities, or shielded identities, interact with one another through shielded transactions
12/ I won't go into the details here, but basically the shielded transactions in the #zkCloud guarantee privacy, while taking execution off chain also enables a far greater transaction throughput
13/ #zkCloud applications can be run locally on a user’s machine, or delegated to a third-party proving-service that constructs proofs and submits transactions on behalf of users
14/ but let's have a look at the example of a DEX to see how @AleoHQ enables #zkApps and private #DeFi
#DEXes are #dApps that allow users to buy or sell tokens on-chain without the need to find specific buyers or sellers and enabling users to retain custody of their own assets
15/ #DeFi saw significant growth in 2020, bringing DEXes to the forefront of the industry. However, using DEXes on a public blockchain can expose a user's identity and financial history to third parties
16/ @AleoHQ addresses this risk by applying #privacy to the fundamental components of any application (users & transactions)
consequently, a user's activity on an @AleoHQ dApp (e.g. DEX) can't be linked to a specific address or account & the details of any tx are hidden
17/ to illustrate this, consider a scenario where a user wants to trade token A for Token B on a DEX on @AleoHQ
the user must prove to the #DEX that they have enough of token A to complete the transaction
18/ however, using a zero knowledge proof allows the user to reference an on-chain proof of a prior transaction to demonstrate a sufficient balance without revealing their overall wallet balance or trade history
19/ this process ensures that the exchange is unable to learn the amount of tokens the user owns, where those tokens were obtained or if they have previously transacted on the #DEX
20/ in summary, @AleoHQ's implementation of zero knowledge proofs allows the platform to offer a novel kind of #DeFi ecosystem that is natively private & scalable
21/ but what also makes me bullish on @AleoHQ, is its focus on providing industry-leading infrastructure and tooling for writing zero knowledge applications, making it easy for developers to write, run, and deploy private applications seamlessly
22/ so to conclude this thread, let's dive into another standout feature of @AleoHQ, its toolset for programmable zero knowledge
23/ one key element of that is the #Leo programming language. Leo offers a high-level syntax that is easy to write and intuitive to express logic in zero knowledge, while also abstracting low-level cryptographic concepts
24/ #Leo is influenced by a number of traditional programming languages and has a strong emphasis on readability and ease-of-use.
25/ @AleoHQ also offers the #Aleo Studio IDE and #Aleo Package Manager to streamline the development process and make it easy to share work with others. Both of these tools are integrated with each other, allowing for seamless package importing and publishing
26/ additionally, @AleoHQ runs on #snarkOS, a decentralized operating system that forms the logical backbone for state transitions and enables the verification & storage of state on the #Aleo blockchain in a publicly verifiable manner
27/ #snarkOS enforces data availability guarantees and requires verifiers to compute zero knowledge proofs to checkpoint state on-chain
28/ there is much more to cover on $ALEO, but I'll save that for another thread 👀
overall, I think @AleoHQ's comprehensive toolset puts it into a unique position to play a key role in the next bull cycle 🔥
remember, the narrative will be #zk & #privacy 🥷✨
29/ if you liked this thread, please support by retweeting the first tweet (linked below) 🙏
stay tuned for more on privacy-preserving technologies that will shape the future of crypto! 🧙♂️✨
x.com/expctchaos/status/1612826679306760192
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