Thanks To The Aztec Protocol, Zcash And Monero Can Now Be Used As Ethereum Smart Contracts
In a piece of highly welcome news for the global crypto community as a whole, Aztec’s coding team has reportedly been successful in “implementing smart contracts that employ zero knowledge proofs” so as to hide details of the involved parties as well as the amount being processed.
In relation to their latest milestone, the dev team had the following words:
“The AZTEC protocol can enable confidential transactions for any generic digital asset on Ethereum, including existing assets. For our proof of concept implementation of the AZTEC protocol, we attached an AZTEC token to MakerDAO’s DAI token. This smart contract can be used to convert DAI from its public ERC-20 form into a confidential AZTEC note form.”
What Are Zero Knowledge Proofs?
For those new to the world of crypto, a zero knowledge proof can be thought of as a cryptographic technique that allows you to facilitate transactions without having to “reveal the asset in question or its total monetary worth”.
This feature was first made famous by ZCash but following the deployment of the AZTEC protocol, the currency and its native protocol have effectively been turned into a smart contract.
More On The Matter
While talking about the the Aztec protocol, a representative for the team said that he was able to successfully execute the aforementioned transaction around 14 days ago. According to the details of the tx, the user was able to transfer a total of 40 dai to 0x6, the zero knowledge smart contract. This basically means that he/she facilitated a monetary transaction with a third-party user for an unknown amount (however, the amount could not have possible exceeded $40 based on the details of the TX).
Other Important Facets Of This Entire Episode
By successfully executing such an anonymous transaction, the crypto world has once again become highly curious as to how the regulatory future of the Aztec protocol will now play out
In this regards, a spokesperson was quoted as saying:
“The implications of this are far wider than sending around confidential ERC20 tokens – over the coming months we’re going to be releasing our full, open-source implementation of the AZTEC protocol which includes the cryptographic protocols required to manage financial instruments in full zero knowledge. This includes anonymous voting for governance mechanics, anonymous identity schemes (e.g. proving that you’re a member of a whitelisted group, without revealing who in that group you are) and a decentralized zero-knowledge exchange, which will enable people to trade AZTEC assets with each other without publicly revealing the values of the trade.”
While for now the AZTEC team has done something truly remarkable but it still remains to be seen whether they can achieve such a high-degree of anonymity as and when larger chunks of money are sent across to other wallet addresses (using their native technology). This is because in order to process large financial transactions, there has to be an order-book which is managed some sort of authority figure (thus reducing the overall privacy of an individual transaction).