If blockchain technology is to achieve true mass adoption, it will have to become cheaper and more efficient. Low transaction throughput on some of the most popular blockchains, including Ethereum, has kept gas fees high and hampered scalability. A host of new projects have sprung up to improve efficiency in the blockchain space, each with their own set of trade-offs, including blockchain proof-of-capacity Subspace, which announced a $32.9 million funding round last year. last week.
Now, a team of researchers from Stanford University’s Applied Cryptography Research Group has entered the fray. The team is coming out of stealth mode with Espresso, a new layer-1 blockchain it’s building to enable higher throughput and lower gas fees while prioritizing user privacy and decentralization. Espresso aims to maximize both privacy and scalability by leveraging zero-knowledge proofs, a cryptographic tool that allows a party to prove a claim to be true without revealing the evidence behind that claim, the CEO said. Ben Fisch at TechCrunch in an interview.
Espresso systemsthe company behind the blockchain project, is led by Fisch, COO Charles Lu, and Chief Scientist Benedikt Bünz, Stanford collaborators who have each worked on other high-profile Web3 projects, including the anonymity-focused Monero blockchain and BitTorrent co-founder Bram Cohen chia. They partnered with Chief Strategy Officer Jill Gunter, a former crypto investor at Slow Ventures who is the fourth co-founder of Espresso Systems, to bring their blockchain and related products to market.
To achieve higher throughput, Espresso uses ZK-Rollups, a zero-knowledge proof-based solution that allows transactions to be processed off-chain. ZK-Rollups consolidate multiple transactions into a single, easily verifiable proof, thereby reducing bandwidth and computational load on the consensus protocol. The method has already gained popularity on the Ethereum blockchain thanks to scaling solution providers like StarkWare and zkSync, according to Fisch.
At the heart of Espresso’s strategy, however, is an emphasis on privacy and decentralization. The team originally decided a year ago to create a flexible blockchain solution focused on privacy, and has since shifted its priorities to prioritize both privacy and scalability after realizing that the ” most immediate pain point” for users was actually the last one, Fisch said.
He added that the vast, industry-wide race to scale blockchain technology has been going on since 2018, when Solana and other layers started designing solutions focused on profitability and throughput. New projects today face an even more complex challenge, according to Fisch.
“One thing that’s become apparent lately is that it’s not just a race for scale anymore, it’s a race for scale and to compromise as little as possible by decentralization,” said Fisch.
While several different blockchain ecosystems use zero-knowledge proofs to improve efficiency today, that efficiency has come at the expense of decentralization, Fisch said.
“If you are using a zero-knowledge proof to prove the validity of a large number of transactions that are never sent to the consensus protocol, then even though the consensus protocol can verify their validity, they are not able to provide users with data that is needed to build future transactions,” Fisch said. Users then rely on the ZK-Rollup server to access this critical data, meaning the data is centralized on that server.
“We’re working on a way to carefully integrate roll-up with consensus so that we still get higher throughput and therefore lower fees, but without compromising decentralization too much,” Fisch said.
Like decentralization, privacy is another fundamental consideration for many crypto users. Public blockchains such as Ethereum record all transactions anonymously in an electronic ledger open to everyone. Although user identities are encrypted on the blockchain itself, if a particular wallet is linked to an individual, their transactions could be exposed. “in real time to anyone who wants to watch, including commercial competitors and threat actors looking for targets,” according to Espresso Systems.
The company’s main privacy solution is a smart contract application called Configurable Asset Privacy for Ethereum (CAPE), which allows creators of assets on the blockchain to customize who can see what information regarding the ownership and movement of those assets. assets.
Fisch said CAPE is particularly well suited to financial institutions or money services businesses creating blockchain-based assets because it allows them to balance the need for customer privacy with the need for risk management and compliance. institutions. He shared the use case of a stablecoin issuer who could create a private version of their coin allowing users to transact privately, while the issuer can still view transaction data.
“CAPE allows asset creators to consider setting up a flexible viewing policy, or even a freeze policy, that gives them more visibility and control over fully confidential and private assets for the rest of the public viewing of the asset. blockchain,” Fisch said.
CAPE is designed to run on any Ethereum Virtual Machine (EVM) blockchain and will debut on the Ethereum testnet in a few weeks so its creators can receive user feedback, although eventually the application will work directly on the Espresso blockchain, according to Poisson. Espresso is also leveraging Ethereum’s popularity as the most widely used blockchain by building a bridge directly to Ethereum that will move assets from Ethereum to Espresso, according to Fisch.
In addition to its public debut, Espresso Systems also announced today that it has raised a $29.9 million Series A funding round led by Greylock Partners and Electric Capital, with participation from Sequoia Capital, Blockchain Capital and Slow. ventures. Greylock’s Seth Rosenberg, who also backs Chia, led the company’s investment in Espresso Systems.
Espresso Systems raised its funding round in November 2020 led by Polychain, bringing its total funding to $33 million. Its other investors include Alameda Research, Coinbase Ventures, Gemini Frontier Fund, Paxos, and Terraform Labs, as well as angel investors Balaji Srinivasan and Meltem Demirors, according to the company.
The team now employs 26 people, including 18 engineers, Gunter told TechCrunch. She added that many of these crypto-specific engineers joined the Espresso team because of its co-founders’ connection to Stanford and wider academia (in fact, Fisch was recently hired as a professor of engineering). Computer Science at Yale University).
Gunter said she was confident Espresso could compete with other Layer 1 solutions working on the same set of problems.
“One of the advantages that we have is that we have the advantage that we can design and build for it from the start, whereas a lot of other systems that work at scale today have these big backward compatibility issues where they have to design around existing systems,” Gunter said. “If you look historically, other blockchain projects like Solana have had a lot of success in being able to start fresh.”