Aztec launches private smart contracts as Ethereum rollup

Aztec, a privacy protocol developing on Ethereum (ETH), announced on Monday the launch of its second iteration, promising private transactions and smart contracts while being cheaper than standard transfers.

The layer-two solution adopted by Aztec relies on zk-Rollups, similar to Loopring or ZkSync. All these protocols rely on zero-knowledge proofs to help Ethereum scale, but come with different benefits and focused use cases.

Loopring focuses on the decentralized exchange experience, while ZkSync aims to be a generalized layer-two protocol that could boost Ethereum’s transactiona throughput.

Aztec, in comparison, places a heavy focus on privacy while still allowing a certain degree of scalability. The team says that the rollup can reach 300 transactions per second while allowing shielded ERC-20 token transactions and private interactions with decentralized finance protocols. Users would be able to trade on Uniswap and other exchanges as part of a pooled contract, similar to how it works on Incognito, a cross-chain privacy protocol.

The stated throughput is a far cry from potential figures on other zk-Rollup solutions, but it is still well above Ethereum’s maximum theoretical throughput of 40 transactions per second. As Cointelegraph highlighted earlier this year, privacy always carries a performance cost. Tom Walton-Pocock, the CEO of Aztec, told Cointelegraph that its limit primarily has to do with potential mass exits: “In order to guarantee that users can withdraw from our rollup, all of the encrypted data generated by a transaction must be posted on chain as call data.”

One of the innovations introduced by Aztec is Noir, a private smart contract language. This could let developers send private transactions and use on-chain cryptographic routines while benefiting from privacy. “The main purpose of Noir is to incorporate data privacy,” Walton-Pocock said. The rollup also features social recovery by default and has several usability benefits like human-readable accounts.

The network is currently live on the Ropsten testnet, with no specific indications as to its mainnet release, though Walton-Pocock alluded to a launch before the end of the year.

Layer-two technologies are often seen as the next step in Ethereum evolution, allowing to carry some of the burden off the main network while sharding is still being developed.

Competition is fierce in this segment, with the first solutions like OMG Network’s Plasma having reached production. Smart contracts on layer two, which could help DeFi scale, have still largely eluded developers. Solutions like Optimistic Rollups and some types of zk-Rollups are poised to solve that problem, but are still relatively far off from a full launch.

Update, 4 pm UTC:  The article was updated with additional commentary.