ZK Status Report for the First Quarter of 2023

Preface

Welcome to our inaugural edition of the ZK Report, a quarterly publication highlighting the most relevant developments in the zero-knowledge (ZK) ecosystem. In this report, we will provide key insights into ZK community interest, emerging use cases, groundbreaking research, recent product launches, and notable investment rounds.

The past year has seen significant progress in zero-knowledge technology, and we are witnessing an explosion of this technology within the blockchain space in 2023. Given the dynamic nature of the ecosystem and the speed at which things are beginning to develop, we thought now was the right time to publish these regular reports to highlight developments and help you stay updated.

The ZKValidator team is deeply passionate about zero-knowledge cryptography and is well-positioned to cover the evolution of the field. Close ties with industry-shaping organizations such as the Zero Knowledge Podcast, ZK Hack, zkSummit, rhino.fi, Geometry, and UCL further enhance our ability to provide comprehensive insights into this cutting-edge field.

ZK in Data

On April 4th, the ZK community held a full day of talks at zkSummit 9. Members of our ZKValidator team participated in the production and management of the event. In the application form for the event, participants shared some information about the types of ZK technologies and emerging use cases they are interested in. We have compiled some of this data into several useful charts that provide us with key insights into community interest and emerging ZK use cases.

From the chart we can see that the data shows some interesting trends:

• Privacy protection is the primary issue . ZK technology ranks first in privacy protection, receiving 12.90% of attention, which shows that people are very eager to use ZK technology to protect their privacy in various applications.

• Scalability is a hot topic : ZK technology ranked second in scalability, receiving 9.46% of the attention, indicating that scalability is an important issue that many people care about and they are eager to explore how to use ZK technology to solve this challenge.

• Identity and new use cases also attracted attention : Identity verification and new ZK use cases ranked third and fourth with 8.86% and 8.76% interest, respectively, indicating that people are interested in exploring how ZK technology can be applied to identity management and other novel use case areas.

When asked about the new use cases they were most excited about, here’s the breakdown of the answers:

Based on the chart, it is clear that zkML has become the most attractive new use case that the community is focusing on. Interoperability is also one of the most popular use cases, which involves using zero-knowledge proofs to implement light clients to verify the full consensus protocol or zkBridges.

Other use cases mentioned included verifiable computation, privacy networks for enterprises, etc. It is worth noting that some responses were more specific and could fall into one of the broader categories above.

The zkSummit 9 event video can be found here !

Groundbreaking research

Geometry's Semacaulk ‌: Introducing Semacaulk, a new ZK ensemble membership protocol that provides impressive GAS savings over depth-20 Merkle tree structures, while ensuring proofs can be generated quickly and verified at approximately the same GAS cost. With Semacaulk, insertions only cost a constant 68kGAS, and applications can precompute proofs, providing a smoother user experience. Additionally, Semacaulk does not require an application-specific trusted setup, only a phase 1 trusted setup output making it highly flexible. Geometry has reached out to various ZK teams to share this groundbreaking project.

Multi-Scalar Multiplication (MSM) on Android Mobile Devices : ZPrize 2022 produced outstanding results for zero-knowledge cryptography, with an average improvement of more than 5x over the baseline in the submission awards. Notably, implementing Multi-Scalar Multiplication (MSM) on Android mobile devices reduced the proof generation time from 2.4 seconds to about half a second, making mobile payments in ZK easier. Multi-Scalar Multiplication (MSM) on elliptic curves is one of the primitives and bottlenecks at the core of many zero-knowledge proof systems. Accelerating MSM generally leads to faster proof generation, making ZK-based applications practical. All submissions, including non-awarding works, are open source under the MIT/Apache 2.0 license to ensure a coherent, open ecosystem for zero-knowledge technology.

GZKP: GPU-Accelerated Zero-Knowledge Proof System‌ : This paper proposes GZKP, a fast GPU-accelerated zero-knowledge proof system that reduces proof generation time in ZKP by leveraging the massive hardware parallelism of GPUs. GZKP addresses performance bottlenecks in existing ZKP implementations by avoiding data shuffles, merging redundant operations, and optimizing large integer arithmetic. The system includes an NTT module with improved cache efficiency, an MSM module with a new parallelization strategy, and a GPU finite field library optimized for arithmetic operations on large integers. Compared with the state-of-the-art GPU-based ZKP systems, GZKP achieves significant speedups and is suitable for a variety of privacy-preserving applications. The proposed technology has broader applications in cryptographic algorithms and contributes to computer systems and security/privacy.

Quarters of zkEVMs

So far, 2023 is shaping up to be the year of the zero-knowledge technology explosion, and one of the main reasons for such a significant narrative in the press and social media is the launch of Polygon and zkSync zkEVMs, designed to scale Ethereum. Almost a month after their launch, here are some statistics on the activity and performance of both:

Although both were launched at the same time, users tend to operate under the zkSync Era. As observed on social media, community members generally believe that zkSync may launch an airdrop event later this year, which attracts more attention to their zkEVM.

Product Release

In addition to the two zkEVM launches, there have been several other ZK projects entering different vertical markets. As we can see in the chart below, significant progress has been made in decentralized identity, interoperability, and payments in both the Ethereum and Polkadot ecosystems over the past three months.

Succinct

"Telepathy" is Ethereum's first decentralized and secure zkSNARK interoperability protocol, which was launched on the mainnet on March 16. This breakthrough protocol allows users to read Ethereum state on any chain while retaining the security of Ethereum's light client protocol. For the first time, Ethereum bridge security no longer relies on multi-signature or optimistic fraud systems, but directly verifies Ethereum validator signatures through zkSNARKs to achieve interoperability.

Sismo

Sismo recently launched Sismo Connect, a privacy-preserving single sign-on method for applications on Web2 and Web3. With Sismo Connect, users can selectively reveal private, fine-grained data to applications while maintaining their privacy. The technology allows developers to quickly implement zero-knowledge technology in their applications, which was previously out of reach for many developers.

Manta

Manta Network recently announced the expansion of its zero-knowledge capabilities to provide privacy support for non-fungible tokens (NFTs) and soul-bound tokens (SBTs). These assets can be easily minted through the NFT Private Offering (NPO) platform in its upcoming product release.

Friction Points

Over the past three months, the ZK community has experienced significant growth and progress. However, along with these positive developments, there has also been some not-so-good news that has posed challenges to the community. In this section, we will explore two friction points encountered by the ZK community, revealing the obstacles they face and the impact they may have on the ecosystem.

01 | Namada

Namada’s latest testnet had issues where transactions were rejected due to the use of lowercase hashes in the whitelist field. This was fixed by upgrading to v0.13.1, but miscommunication led to two different state roots and a network fork. A new protocol version v0.13.2 was subsequently deployed. In the future, the team will improve their development network configuration and stick to a single release to avoid similar issues. Recall that Namada is the first fractal instance of Anoma.

02 | Aztec Connect will be discontinued

Aztec Network announced that they will decommission Aztec Connect, the privacy infrastructure that provides a cryptographic layer for Ethereum. In 9 months, the convolution has earned 578 ETH ($854,000 at today's prices) in transaction fees. However, it also spent 352 ETH ($520,000 at today's prices) to publish calldata to L1, a total of 346 MB of calldata.

According to the official statement issued by the team, the development of Aztec Connect is an important milestone in achieving Aztec's ultimate goal - to develop a fully decentralized general-purpose encrypted zkRollup with Ethereum security quality assurance. Aztec will now focus its mid- to long-term focus on the development of two major, mutually compatible and interrelated products, Noir and the next generation of encrypted zkRollup. They expect to launch more Noir features and the full specifications of the latest zkRollup in the first half of 2023.

Ecosystem Investment Rounds

Here is a brief overview of some of the most notable investment rounds in the ZK ecosystem:

=nil ;; Foundation - $22M: Ethereum research and development company The =nil;; Foundation has successfully closed a $22M funding round led by Polychain Capital. The funds will be used to further develop Proof Marketplace, a protocol that allows cryptographic protocols to outsource zero-knowledge (ZK) proof generation. =nil; Foundation, which originally started as a research collective but has transformed into a traditional startup, is now valued at $220M. Proof Marketplace aims to enable layer 1 and layer 2 blockchains and protocols to generate ZK proofs on demand, facilitating trustless data accessibility and seamless data sharing without relying on centralized intermediaries.

Proven - $15.8M: Proven, a Zero-Knowledge (ZK) proof developer specifically for proving solvency, has successfully closed a seed round raising $15.8M led by crypto venture capital firm Framework Ventures. The Proven technology combines ZK proofs (a form of cryptography that can prove something is true without compromising anonymity) with quantitative solutions. This enables exchanges, stablecoin issuers, asset managers, and custodians to showcase their assets and liabilities to potential customers, partners, or regulators without publicly disclosing sensitive data, and provides greater transparency through their “Proof of Solvency” protocol running every day. Proven’s successful seed round comes at a time when the cryptocurrency industry has seen notable meltdowns related to solvency issues, making their innovative solution even more relevant and timely.

Polyhedra Network - $10 million: Crypto infrastructure provider Polyhedra Network has successfully completed a strategic funding round co-led by Binance Labs and Polychain Capital, raising $10 million. The startup aims to develop a comprehensive system with a focus on blockchain interoperability, scalability, and privacy protection. These include protocols and products such as zkBridge (allowing cross-chain asset and data transfers), a decentralized identity solution for zero-knowledge credential verification, and paraPlonk (enhancing the speed and cost-effectiveness of zkrollups).