The AZTEC protocol is the Anonymous Zero-knowledge Transactions with Efficient Communication (AZTEC) protocol. It specifies a set of zero-knowledge proofs that establish secret transaction rules. This protocol is created for application within blockchain protocols that carry Turing-complete general-purpose computation.
According to its paper, AZTEC is a proof of concept. This protocol allows secret transactions on the Ethereum network, with a practical implementation live on the Ethereum main-net. It also uses an engagement scheme that allows the dynamic attestation of various proofs. This is coupled with a set of zero-knowledge Sigma protocols to allow efficiently correct secret transactions.
In other words, this protocol promotes transactions of value, where the values of the transaction are encrypted. The AZTEC protocol smart contract validator, AZTEC.sol, authorizes a novel zero-knowledge proof that decides the legitimacy of a transaction via a sequence of homomorphic encryption and range proofs.
The AZTEC protocol team just published their working zero knowledge circuit on mainnet. The proof of generation will be published soon.
@VitalikButerin hey! We've just published our working zero knowledge circuit on mainnet and would love to get some more eyes on it from the community. The contracts are here: https://t.co/PLXCuvJbD5 and the proof generation is getting cleaned up and posted soon
— Arnaud (@_ArnaudS_) November 30, 2018
AZTEC Protocol and Encrypted Values
The encrypted values are AZTEC notes. In this, a note encrypts a number that denotes a value (for example a number of ERC-20 tokens). Now, every note has a master which is specified via an Ethereum address. In order to use a note, the master must give a legitimate ECDSA signature attesting to this.
According to its paper, the source implementation of the AZTEC protocol is executed on the Ethereum public blockchain. It can be utilized to generate secret designs of enduring digital assets. The AZTEC zero-knowledge proofs fetch roughly 840,000 ‘gas’ to settle on the Ethereum main-net.
Currently, the AZTEC protocol is live on the Etheruem main-net. Its proof of concept contract transforms DAI into AZTEC note form and is live on the Ethereum main-net. The example of AZTEC join-split transaction can be checked here.
The Need for the AZTEC Protocol
The AZTEC paper further elaborated that Blockchain technologies allow transactions to a stable ledger that can be made to describe a system of digital value transfer.
For example, the Bitcoin blockchain describes a control registry of the Bitcoin cryptocurrency, where masters of the currency can touch a consensus on how much Bitcoin people hold without a centralized thing working as a root of trust. This distrustful attestation has developed at the cost of confidentiality. Now, to overcome this, an order for a transaction to be authenticated both the inputs, outputs and the transaction validation algorithm must be known. There is no idea of a vested actor that has passage to secret information.
On the other hand, the AZTEC protocol facilitates secret transactions in a nonproprietary pattern that can be executed on blockchains that back common design computation. The best example of such blockchain is the Ethereum blockchain. The AZTEC protocol can be connected to enduring digital assets established on these platforms. Not only this, the protocol also permits secret cross-asset trades for digital assets established on the same blockchain platform via confidential, zero-knowledge decentralized exchanges.
The AZTEC people have tested the proof of concept implementation by attaching an AZTEC token to MakerDAO’s DAI token. This smart contract can be utilized to transform DAI from its public ERC-20 form into a secret AZTEC note form. The following image is displaying the AZTEC note.
In this protocol, the gas price scale with the number of input and output notes in a join-split transaction. For a completely secret transfer, with 2 input notes and 2 output notes, the gas price is around 900,000 gas. Projected EIP reforms will decrease the cost of these transactions to around 200,000 – 300,000 gas.
The Ethereum developers are also secretly planning an earlier unrevealed upgrade that could increase the capacities of the technology. The developers may be executing innovative maneuverings to stimulate its evolution roadmap.
At least three separate development acting teams have been established already. One will concentrate on creating a new tool to operate smart contracts (which will replace Ethereum’s virtual machine), another one to address modifications to smart contract prices, and another one to assume and benchmark such modifications.
Not only this, but there are also plans to conduct a research conference to push research ahead and promote new patrons to join the force. These meetings were attended by some notable people such as Joseph Lubin, Greg Colvin, Joseph Chow, Fredrik Harrysson, just to name a few.
Disclaimer: This information should not be interpreted as an endorsement of any cryptocurrency. It is not a recommendation to trade. The cryptocurrency market is full of surprises and overhyped assets. Do your research before buying anything. Do not invest more than you can afford to lose.