How will Aleo compete with other Zero-Knowledge Proofs projects?
In the Zero-Knowledge Proofs segment there are many outstanding projects, so how will Aleo compete against formidable competitors?
Overview of the current landscape of ZKP
Zero-Knowledge Proofs is a type of cryptographic protocol that allows one party (Prover) to prove to another party (Verifier) that they know a certain piece of information without revealing any information about the actual content of the information. believe that.
For a particular blockchain ZKP has two useful applications: Scalability and privacy. ZKP features allow blockchains to approach the performance of centralized services and exceed their security and privacy capabilities, while maintaining the benefits of decentralization.
Zero-Knowledge Proofs will play an important role in the future of cryptocurrencies and potentially in the future of the internet. They provide solutions that are completely superior to the alternatives.
Currently, the Zero-Knowledge Proofs segment has many outstanding projects such as zkSync, Starkware, Aztec, Immutable X… and Aleo is also a project in this segment. Within the framework of this article, we will discuss together the characteristics that make Aleo stand out and be able to surpass the top ZKP projects. Together we will learn about Aleo’s position in the context of ZKP protocols.
The largest ZKP protocol portfolio is the “Layer 2 Scaling and Privacy-Free Solutions” category, which includes well-known projects such as StarkNet, zkSync, ImmutableX and Polygon Hermez, Miden and Zero… Other than this category , Aleo’s approach is privacy-focused and gets scalability as an added bonus.
Privacy is a weapon that helps Aleo compete directly with other ZKP projects
ZKP projects are classified in many ways, some of which are programmable and others are not. Some DeFi-specific protocols, like Zcash, focus solely on sending money, others address broader DeFi applications.
However, no matter how you differentiate them, Aleo remains distinct in its approach. It is the only project that builds general-purpose L1 for scale and privacy, with its own programming language and virtual machine.
However, to approach in that direction, Aleo also has to make many trade-offs.
Firstly, in the future Aleo will develop in the direction of multi-chain and will definitely have a bridge between Aleo and Ethereum, but it is a risky choice when it has to compete with EVM projects of the ecosystem. Ethereum. When Electric Capital released its developer report, Ethereum was ahead of all other chains by number of developers and according to Artemis developer console Ethereum still has twice as many developers weekly activities.
Aleo is also betting that there will be so many developers that care about privacy that they are willing to pay more to be able to use that privacy, as well as make them ready for a new language. . It is no surprise that early developers and users were attracted to projects built on a familiar chain (Ethereum), with a familiar language (Solidity) and a value proposition. clear (scalability).
On the other hand, if Aleo chooses the right direction and privacy is the foundation for the future of web3. Or at least if there are enough apps that need privacy and programmability to build a robust ecosystem, and if complete privacy can only be achieved on an L1 platform with a new language, Aleo will definitely own a large market.
Even if you consider that all DeFi is moving to DeFi-specific L1 and L2, there are some cases where full privacy and programmability are needed for the smoothest operation. Considering the previous use cases, federated machine learning, AI, identity, voting, and certain game segments all seem to be use cases that require privacy.
Aleo’s design of Leo as JavaScript, also hints at greater ambitions in connecting web2 and web3. For applications that are not strictly crypto but want to incorporate ZKP into their product to protect user privacy data, or want to exploit certain features of cryptocurrency without encountering risk of leakage of user data or ownership, then Aleo seems to be a perfect choice.
How does Aleo capture value?
Aleo captures value through Aleo Credit and this is how Aleo Credit is used:
Network Security: Validators contribute Aleo Credits to propose blocks and secure the network, and receive Aleo Credits as rewards for validating. This is the standard for the PoS blockchain.
Buy zero-knowledge computing: Applications that need to prove zkSNARK use Aleo Credit to pay proofs to generate proofs.
Aleo predicts that the demand for ZKP-based computations will increase dramatically as their cost of use decreases and their accessibility improves. Aleo wants to be the cheapest and most efficient provider of zkSNARK computing power. Aleo Credit is the way to access that computing power. Whether an application is built entirely on Aleo or only needs zero-knowledge computing for part of its work, that application will need to use Aleo Credit to pay for that cost.
Therefore, Aleo Credits will be valuable to developers who want to use ZKP computing power, and their value will be based on the demand and price of zero-knowledge computing.
A unique feature that sets Aleo apart is that there is no concept of “gas”. That means people will always know in advance how much they will have to pay to make a transaction on Aleo.
Ending
Whether the initial demand for Aleo comes from DeFi applications like private stablecoins or private DEXs, from new use cases like federated machine learning and AI data sovereignty… there are potential avenues. Unique features drive significant demand for zkSNARK and prove that Aleo is getting more investor interest when compared to other ZKP projects.
