Ethereum Privacy Provider Aztec Raises $17M, Adds Bridges for Developers
Ethereum is the world's most popular blockchain but it's not very private. Like other distributed ledgers, each Ethereum transaction is attributed to a wallet address that, in many cases, can be traced to a specific company or individual.
A project called Aztec has been working to change that and on Thursday announced it has raised $17 million to expand what it describes as "programmable privacy" for Ethereum.
When it launched in 2019, Aztec introduced a new layer atop the Ethereum blockchain capable of recording transactions anonymously using zero-knowledge proofs—a term that describes cryptography capable of proving something is true without someone needing to reveal the entirety of their personal details. For instance, zero-knowledge proofs can be used to demonstrate someone is 21 years old without displaying their name or birthdate.
Since its launch, Aztec has offered its privacy features through a product called zk.money, which provides anonymous transactions on Ethereum but operates as a siloed network. On Thursday, however, Aztec announced it is unrolling a set of tools, dubbed Aztec Connect, to let developers add its privacy feature to a wide variety of protocols by using a software bridge.
"It allows users to confidentially access world-class DeFi services on Ethereum with up to 100x cost savings, all while strengthening Aztec’s existing privacy guarantees. At launch, Aztec Connect extends the capabilities of zk.money, adding whitelisted functionality from select blue-chip DeFi partners," said the company in a blog post.
In an interview with Decrypt, Aztec cofounder Joe Andrews said this means developers will be able to plug its privacy tool into any Ethereum-based protocol. He added the service is designed to be permissionless, and will eventually be found in a variety of popular decentralized finance platforms such as Uniswap and on wallets like MetaMask and Rainbow.
Aztec has already arranged a partnership with DeFi lending service Element, and says more such tie-ups are in the works. The project is also launching a grant program that will fund privacy-focused developers who use the Ethereum programming language Solidity.
Aztec privacy meets scalability
Aztec is not only touting the protocol's privacy advantages but also its ability—like other Layer 2 protocols—to reduce gas fees by 80-90% for transactions on its network compared to those settled directly on Ethereum's mainnet.
While Aztec's privacy features have won praise, including from Ethereum founder Vitalik Buterin, they could also attract attention from regulators who have long expressed concern about anonymous crypto transactions.
Andrews says he is not particularly concerned about regulation, noting that zero-knowledge proofs can also serve to attest that someone is not a crook or money launderer. He predicts that regulators worried about money laundering are likely to shift their focus to wallet providers rather than protocols like Aztec.
Crypto investment giant Paradigm led the latest funding round for Aztec, while other investors included Ethereal Ventures and Vitalk Buterin himself. ConsenSys, which funds an editorially-independent Decrypt, joined the earlier seed round for Aztec.Source