Confidential zkStack

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This section refers to an upcoming product. As such, although our concept and initial design are finalized, some changes might still occur and be reflected accordingly.

The trade-offs of WaaS tools

Wallet-as-a-Service (WaaS) tools are uniquely poised to bootstrap Web3’s adoption via friendlier user experiences in handling and creating wallets. They allow users to create and access wallets through Web2 accounts, and embed wallets directly in-app for a seamless experience. These tools, however, do not currently offer any privacy for their users. When interacting with them, end-users make two privacy trade-offs:

1. To connect to dApps via their Web2 identities, they reveal (some) personal information to WaaS providers and the dApps integrating them. This can result in their WaaS-created wallets being linked to their Web2 social identities.
2. WaaS tools give their users access to the most popular L1 and L2 blockchains, most of which are transparent by default. As such, the wallet addresses created by users can also potentially be linked to their other existing on-chain wallet addresses. In this scenario, all of the user's on-chain and off-chain identities, which might include CEX accounts, are completely bound and can be tracked.

Solving privacy trade-offs via zero-knowledge technology

By integrating zero-knowledge (ZK) technology into its product mix, Particle is introducing a first-of-its-kind product: a Confidential zkStack working on top of Particle's WaaS.

Particle Network's Confidential zkStack achieves two goals:

• To protect users’ identities so that their personal information is never exposed during the process of creating a wallet, and wallets cannot be linked to their owners.
• To operate in synergy with other components of Particle’s v2, such as Omnichain Account Abstraction, for private transactions.

Besides the obvious perks of private transactions and users’ identities being known only by themselves, it’s important to consider some of the other equally positive side-effects of our zkStack’ privacy:

• For developers and projects, having an underlying reliable system that does not handle user data can save many headaches. Regulations like the European GDPR have made considerable progress regarding user data management and privacy. And while these regulations are primarily good, complying with them might incur time, effort, and, therefore, costs. Projects can save considerable time and effort by having complete plausible deniability of ever handling user data.
• For end-users, conducting transactions without being observed means that their strategies cannot be leaked, copied, arbitraged, or directly copied.
• Similarly, end-users can have the peace of mind that their data cannot be sold, stolen, leaked, or otherwise mishandled by good- or ill-meaning service operators.

While the above is not an exhaustive list (privacy has many benefits!), it should now be clear that, in this context, privacy is a net improvement for all participants of the WaaS framework. The next chapers will dive deeper into the inner workings of the Confidential zkStack.

Evolutionary steps for Particle’s Confidential zkStack

Other interesting directions for the Confidential zkStack to explore could be:

1. Support for heterogeneous chains: Confidential Login cah implementing Verifiers on any chain, allowing other chains to benefit from a privacy-protected user onboarding process.

2. Advancing decentralization: Our design includes two core components –the Salt Service and the Prover. These components can be further decentralized, respectively, by allowing users with completed social recovery processes to self-host their passwords and by locally computing proofs.

3. Privacy protection for senders: While our confidential transactions primarily protect receivers’ privacy, addressing sender privacy can be achieved by supporting new ERC-20 token standards with encryption features (such as homomorphic encryption). Exploring new directions, such as users proving their burning of tokens (private Proof-of-Burning), can be pursued to obtain on-chain privacy protection throughout the address’ entire lifecycle at a minimal cost.