Does ZKP have a low-cost absolute advantage? A discussion using Aztec as an example

Author: Kyle Liu, Investment Manager at Bing Ventures

Introduction: With the continuous development of ZKP (Zero-Knowledge Proof) technology, there is a growing interest in the relationship between its cost and performance. Implementing and maintaining zero-knowledge proof systems require substantial computational resources and algorithm optimization. These computations can lead to high costs, especially when handling large-scale data and complex calculations. Therefore, the cost advantage of ZKP is not absolute but depends on specific application scenarios.

In light of the news about the forced shutdown of Aztec Connect, we feel compelled to reassess the claimed cost advantages of ZKP technology. Although ZKP is touted as a solution that can provide high privacy, the temporary failure of Aztec Connect at least proves that this technology currently faces significant challenges in terms of cost.

If ZKP technology truly has a cost advantage, why was Aztec Connect unable to achieve sustainability during its operation? More intriguingly, Aztec also encouraged the community to fork, deploy, and operate new versions of Aztec Connect. This implies the enormous resources required to run Aztec Connect independently. This further intensifies our skepticism about the cost-effectiveness of ZKP. If the cost advantage of ZKP is real, why does the community need such a large investment to keep this project running?

Therefore, we need to carefully examine the claimed cost advantages of ZKP technology. Perhaps the cost advantage of ZKP is merely an exaggerated illusion, and the reality may be more complex. In pursuing cost advantages, it is essential to consider not only optimizations in individual aspects but also the overall performance and cost balance of the entire system. For example, reducing computational costs may increase communication costs, or using more efficient algorithms may require more complex hardware support. Thus, we need to conduct a comprehensive cost-benefit analysis for specific projects, weighing various optimization strategies and finding the best balance.

Does ZKP Have an Absolute Cost Advantage? A Discussion Using Aztec as an Example

The Broken Cost Myth

First, we need to define the cost structure of ZKP. Currently, various definitions are complex and inconsistent, at least including hardware costs, computational costs, verification costs, storage costs, and more. However, from the author's perspective, following the native principles of ZKP, this article focuses on defining the cost structure in terms of communication costs and computational costs. Communication costs refer to the costs of exchanging information between the prover and the verifier, while computational costs refer to the costs incurred by the prover and verifier in executing computations. These two costs play a core competitive role in ZKP, as they directly affect the efficiency and security of proof and verification. If communication costs and computational costs are too high, the efficiency of proof and verification will decrease, thereby impacting the overall performance of the system.

Now, returning to Aztec's privacy architecture, we must recognize that Aztec's Rollup approach significantly differs from other ZK Layer 2 solutions. Unlike aggregating multiple transactions to generate a proof, Aztec requires each transaction to generate a proof separately before packaging. This approach results in each transaction needing to generate an independent proof, thereby increasing computational costs and gas fees, making Aztec's gas fees higher than those of other Rollup solutions.

Moreover, only privacy proofs generated locally by users are true zero-knowledge proofs that do not leak information, while internal Rollup and external Rollup proofs may not necessarily be zero-knowledge. This blurs the privacy advantages of ZKP and further questions the feasibility of ZKP's cost advantages. The gateway approach of Aztec Connect itself is relatively cumbersome, aggregating transactions to Layer 1 and implementing fund aggregation and DeFi function calls through the Aztec Bridge Contract. However, this gateway approach may only be suitable for specific types of transactions in terms of cost-sharing and limits the flexibility of project deployment.

Does ZKP Have an Absolute Cost Advantage? A Discussion Using Aztec as an Example

Difficult-to-Measure Cost-Effectiveness

The relationship between cost and performance is complex and dynamic. Generally, lower costs can improve performance as they reduce computational and communication overhead, thereby enhancing the overall efficiency of the system. However, overly pursuing low costs can lead to performance degradation due to the sacrifice of certain computational and communication resources. Therefore, ZKP systems need to find an appropriate balance between cost and performance to meet the demands of different application areas.

Zero-knowledge proofs involve verifying the correctness of a claim through message passing among different participants, making communication costs a key factor. To reduce communication costs, efficient communication protocols and compression algorithms can be considered to minimize message size and transmission time. Particularly for Layer 2 projects like Aztec, cross-chain communication requires transmitting messages and data between different blockchain networks. Message transmission involves network communication and interaction, leading to certain communication costs. Especially for large-scale full-chain DApp construction, the volume of message transmission increases, adding pressure to communication costs.

Zero-knowledge proofs require extensive computations to generate proofs and verify their correctness. To reduce computational costs, optimization algorithms and data structures can be employed to minimize unnecessary computational steps and storage overhead. Additionally, techniques such as parallel computing and distributed computing can be utilized to distribute computational tasks across multiple nodes, enhancing computational efficiency. Verification on the target chain is relatively inexpensive, but generating proofs on the source chain incurs significant computational costs. Particularly when using traditional methods for verification, the verification costs are high, which users cannot bear.

Does ZKP Have an Absolute Cost Advantage? A Discussion Using Aztec as an Example

More Effective Cost Control Strategies

The author believes that with technological advancements, communication costs may no longer be the primary limiting factor. The continuous progress of modern communication technology indicates a trend of significant reduction in communication costs. Therefore, it may be more meaningful to focus more on optimizing computational costs. However, as the application scope of such protocols expands, communication costs may still be an important consideration that requires continued attention for flexible use in specific scenarios.

At the same time, we must understand that methods for optimizing computational costs are not limited to algorithm optimization. In addition to improving the algorithms of protocols, innovations in specialized hardware, distributed computing, or deep learning can also be considered to reduce computational costs. These methods require more long-term research and empirical evidence but will undoubtedly lead to breakthrough performance improvements and cost advantages. We believe the following directions are more worthy of attention in the future ZKP competition:

High performance and low computational costs: A ZKP project with high performance and low computational costs will attract significant attention. This means that the project can efficiently generate and verify proofs while maintaining security and privacy. Such projects will have broad application potential, capable of meeting large-scale practical demands. Currently, there are various ZKP proof systems, each with its unique advantages and limitations. We are more optimistic about projects dedicated to improving and innovating proof systems to enhance efficiency, reduce computational costs, and strengthen security. Developers need to explore more efficient zero-knowledge proof constructions and optimized zero-knowledge proof verification algorithms to achieve faster and more reliable proof generation and verification processes.

A successful ZKP project should possess deployable characteristics in the real world. This means it needs to consider the constraints of real-world environments and provide practical solutions. For example, compatibility with existing infrastructure and systems, ease of integration and usability are all important considerations. Utilizing specialized hardware to accelerate ZKP computations is an important research direction. Future research can focus on innovations in hardware acceleration technologies, such as using FPGAs (Field-Programmable Gate Arrays) or ASICs (Application-Specific Integrated Circuits) for customized hardware. By leveraging hardware acceleration, the performance and efficiency of ZKP systems can be improved, providing better support for large-scale applications and real-time scenarios.

Does ZKP Have an Absolute Cost Advantage? A Discussion Using Aztec as an Example

Solving security issues: In ZKP systems, security is crucial. Security issues in ZKP systems represent the largest hidden costs, such as defenses against attacks and vulnerabilities, ensuring the security and randomness of parameter settings, etc. Such projects can only ensure their reliability and credibility in practical applications by continuously enhancing the security of ZKP systems, providing users with higher levels of protection and privacy guarantees, which will permeate the entire design process of cost and performance.

In summary, a promising ZKP project should possess characteristics such as high performance and low computational costs, practical application orientation, security and trustworthiness, real-world deployability, and comprehensive security throughout the process. We can foresee that the continuous development of ZKP technology will provide broader application prospects for privacy protection and verification performance. When evaluating the cost-effectiveness of ZKP projects, we also need to consider multiple factors, including computational resources, security requirements, performance demands, and the complexity of implementation and maintenance. In some cases, ZKP may provide significant advantages in privacy protection and security, offsetting the increased costs. However, in other cases, the costs may outweigh the actual value provided.