What is Hybrid zkRollup?
The data on Ethereum is open to the public, but many data and transactions require confidentiality. Based on this, Aztec has created a transparent + privacy hybrid zkRollup. Everyone is familiar with the idea of a hybrid vehicle, which uses both gasoline and electricity to power a vehicle.
Aztec recently developed the hybrid zkRollup idea after the closure of Aztec Connect. The network plans to connect Ethereum smart contracts with zk encryption in the future. Let’s say the earlier Aztec Connect was only for exchanging private digital assets. In that situation, the future scope of Aztec zkRollup will be broader, including the computation of privacy and the transfer of all data.
Many argue the unexpected move is because the project is concerned about a lot of harsh policies targeting privacy projects, while many governments are concerned that these products could support illegal transactions. As can be seen, Aztec’s Hybrid zkRollup approach is partly intended to mitigate the effects if unexpected changes in legislation occur in the near future.
Aztec will include all the functionality of Ethereum smart contracts, as well as the security features of programmable anonymity, data privacy, and confidentiality contracts. Aztec significantly broadens the scope of what can be done on the blockchain by enabling public-private partnerships.
Road map
Aztec has started to implement the basic contract (Milestone1.0) and the current components of the local development environment have made great progress. Developers will have access to a local testnet in the third quarter of 2023, and consumers will have access to a fully public testnet in early 2024.
How does it work?
Aztec takes advantage of previous Connect architecture work and vastly improves its breadth and capabilities. Connect previously used an encrypted UTXO design. The same idea will be used in Aztec, but with one key difference: UTXO can represent any data, not just “token value”. Smart contracts can now be stored entirely in UTXOs.
Connect previously only supported three custom circuits. In both public and private states, the w-network can enable arbitrary smart contract logic. As a result, developers have access to the whole range of Ethereum use cases, as well as totally new cryptographic applications. Connect is exclusively for DeFi, while Aztec boosts creativity.
The public and private state environments in Aztec are fully composable, meaning any function can call any other function. This leads to totally new blockchain paradigms, such as privacy-to-privacy function calls, in which a smart contract’s logic is transparent to blockchain observers and may interact with other contracts with invisible logic.
Aztec is building a complete privacy ecosystem: a network of smart contracts that can pull and write to whatever ledger is most convenient:
A transparent, public ledger to enable native protocols that need transparency, such as AMMs and loan protocols.
An invisible private ledger that enables the development of private decentralized government, money, identification and games.
Aztec maintains the same separation of view and spend keys as Connect, but extends view key permissions for each contract for fine-grained data access control.
Since it provides per-contract consent, compliance can be done in a variety of ways using new blockchain primitives, such as decentralized identification, third-party verification, and key key sharing.
The network offers a full range of programmable private permissions, eliminating the need for all-or-nothing methods in applications.
It broadens the scope of design for what you can develop… You can create apps where the goal isn’t just privacy, but where you need to hide information to do what you need to do.
Gambling, such as private voting in DAOs or making private trades on public automated market makers, can be one of these things (AMMs).
The company is also building its own privacy-focused programming language for smart contracts, dubbed “Noir,” to ensure that private smart contract computing becomes possible.
Noir will be a universal zero-knowledge circuit language intended to validate any cryptographic backend. It will be completely open source.
No zkEVM. Why?
According to the project, Aztec is a transaction processing environment integrated with Zero-Knowledge (ZK) technology. However, Aztec insists it has no intention of moving in the direction of zkEVM (like many notable recent projects).
Ethereum is essentially a state machine. It starts with a state, then organizes transactions by block and changes the state deterministically. Aztec expands the global state machine with private states. This hybrid public-private state machine supports the execution of both public and private smart contract logic. At the same time, it no longer performs transactions like a typical blockchain, but rather verifies the validity of already calculated transactions. Put another way, Aztec is a zero-knowledge execution environment, but not zkEVM.
Aztec explained the “hybrid” approach, saying it combines application scalability thanks to Ethereum’s account-based network management and UTXO mechanism, which helps protect the privacy of many classic blockchains such as Bitcoin. This combination allows programmers to write contracts that are similar to the experience on Ethereum, but still provide security features.
An early conclusion was obtained when examining privacy smart contracts at Aztec Labs: privacy is incompatible with the EVM. The brilliance of Rollup technology is that it does more than just replicate Ethereum.
Aztec offers the ability to ensure anonymity at the base layer while providing the security guarantees of Ethereum. At the time of its creation, Ethereum sacrificed anonymously in exchange for public consensus. It wasn’t until Zac Williamson and Ariel Gabizon released Plonk in 2018, the first zkSNARK with broad applicability for blockchain applications, that it became viable to perform reliable, private execution using advanced zero-knowledge cryptography.
However, account-based public blockchain models such as Ethereum cannot enable native privacy, while UTXO-based privacy solutions cannot support the ecosystem of apps and tools developed for public smart contract platforms.
Aztec integrates public and private execution into a single zkRollup, seamlessly composing encrypted and unencrypted transactions. If Ethereum’s innovation is the ability to read and write to the public state, Aztec’s innovation is the ability to read and write to both the public and private state. Mixing public and private rollups into one hybrid rollup allows for secrecy and audibility use cases such as:
- Private voting for public DAOs
- Private gaming sessions
- Trades privately on public AMMs
Aztec previously only allowed private asset transactions, but now also allows execution of private smart contracts, and smart contracts are more flexible in terms of compliance and viewing rights.
Conclusion
Users can now deploy private contracts to Aztec’s local system, while the public side of the technology is still in development.
Hybrid combines the application scalability of Ethereum’s account-based network management with the UTXO mechanism, which offers the privacy guarantee of many traditional blockchains such as Bitcoin. This combination allows programmers to build contracts that match the Ethereum experience while still having similar security features. Performance-wise, we still need time to judge.
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