Aleo: The Innovator in Privacy-Protecting Blockchain

Aleo is a blockchain project dedicated to privacy protection, achieving higher privacy and scalability through Zero-Knowledge Proof technology (ZKP). The core idea of the project is to enable users to authenticate their identity and process data without disclosing personal information.

This article will introduce the project overview and latest developments of Aleo, and provide a detailed interpretation of the puzzle algorithm update that has garnered market attention.

Project Overview

Privacy

The core of Aleo is the zero-knowledge proof (ZKPs) technology, which allows transactions and the execution of smart contracts to be carried out while maintaining privacy. User transaction details, such as the sender and transaction amount, are hidden by default. This design not only protects user privacy but also allows for selective disclosure when necessary, making it very suitable for the development of DeFi applications. Its main components include:

1. Leo Programming Language: Adapted from Rust, specifically designed for developing zero-knowledge applications (ZKApps), reducing the requirements for developers' knowledge of cryptography.

2. snarkVM and snarkOS: snarkVM allows off-chain computation, with only the verification of computation results on-chain, thus improving efficiency. snarkOS ensures the security of data and computations and allows for permissionless functionality execution.

3. zkCloud: Provides a secure and private off-chain computing environment that supports programming interactions between users, organizations, and DAOs.

Aleo also provides an Integrated Development Environment (IDE) and Software Development Kit (SDK), enabling developers to quickly write and publish applications. Developers can deploy applications in Aleo's program registry without relying on third parties, thereby reducing platform risk.

Scalability

Aleo adopts an off-chain processing method, where transactions are first computed for proof on the user's device, and then only the verification results are uploaded to the Blockchain. This approach greatly enhances the transaction processing speed and the system's scalability, avoiding network congestion and high fee issues.

Consensus Mechanism

Aleo introduces AleoBFT, a consensus mechanism with a hybrid architecture that combines the instant finality of validators with the computational power of provers. AleoBFT not only enhances the degree of decentralization of the network but also improves performance and security.

1. Block quick finality: AleoBFT ensures that each block is immediately confirmed after generation, enhancing node stability and user experience.

2. Decentralized Assurance: By separating block production from coinbase generation, validators are responsible for generating blocks, while provers carry out proof computations, preventing a minority of entities from monopolizing the network.

3. Incentive Mechanism: Validators and provers share block rewards; encourages provers to become validators by staking tokens, thereby enhancing the decentralization and computational power of the network.

Aleo allows developers to create applications that are not subject to gas limits, making it especially suitable for applications that require long-running processes, such as machine learning.

Latest Developments

Aleo will launch its incentive testnet on July 1st, here are some important updates:

1. ARC-100 Voting Passed: The voting for ARC-100 ("Compliance Best Practices for Aleo Developers and Operators" proposal, involving compliance aspects, security measures such as fund locking and delayed arrival on the Aleo network) has ended and passed. The team is making final adjustments.

2. Validator Incentive Program: This program will launch on July 1, aimed at validating the new puzzle mechanism. The program will run until July 15, during which 1 million Aleo points will be allocated as rewards. The percentage of points generated by nodes will determine their share of the rewards, and each validator must earn at least 100 tokens to qualify for rewards. Specific details have yet to be finalized.

3. Initial Supply and Circulating Supply: The initial supply is 1.5 billion tokens, with an initial circulating supply of approximately 10% (not yet finalized). These tokens mainly come from Coinbase tasks (75 million) and will be distributed within the first six months, including rewards for staking, running validators, and validating nodes.

4. Testnet Beta Reset: This is the last network reset, and no new features will be added after it is completed; the network will be similar to the mainnet. The reset is to add ARC-41 and new puzzle features.

5. Code freeze: The code freeze was completed a week ago.

6. Validator Node Expansion Plan: The initial number of validator nodes is 15, with a target to increase to 50 within the year, and eventually reach 500. To become a delegator, 10,000 tokens are required, and to become a validator, 10 million tokens are needed; these amounts will gradually decrease over time.

Synthesis Puzzle Algorithm Analysis

Aleo recently updated the latest version of the puzzle algorithm. The new algorithm no longer focuses on the generation of zk proof results, removing the calculations of MSM and NTT, and instead focuses on the generation of intermediate data witnesses before producing the proof. Here is a brief introduction to the latest algorithm:

Consensus Process

1. The Prover computes the puzzle, constructs solutions, and broadcasts them to the network.

2. Validator aggregates transactions and solutions for the next Block, ensuring that the number of solutions does not exceed the consensus limit.

3. The legality of the solution needs to verify that its epoch_hash matches the latest_epoch_hash maintained by the validator, that the calculated proof_target conforms to the latest_proof_target maintained by validators in the network, and that the number of solutions included in the block is less than the consensus limit.

4. A valid solution can receive consensus rewards.

Synthesis Puzzle Core Mechanism

1. Each puzzle calculation is called a nonce, constructed from the address receiving the mining reward, epoch_hash, and the random number counter.

2. In each epoch, all provers in the network need to compute the same EpochProgram, which is sampled from the instruction set using the random number generated by the current epoch_hash.

3. Use nonce as a random seed to generate the input for EpochProgram.

4. Aggregate the R1CS and input corresponding to the EpochProgram to perform witness calculation.

5. Calculate all witnesses and convert them into a sequence of leaf nodes of the merkle tree.

6. Calculate the merkle root and convert it to the solution's proof_target, determining whether it meets the latest_proof_target of the current epoch.

7. The input of EpochProgram can be updated through an iterative counter within the same epoch to perform multiple solution calculations.

Changes and Impacts of Mining

After this update, the puzzle changes from generating proof to generating witness. The calculation logic of all solutions within each epoch is consistent, but there are significant differences in the calculation logic between different epochs. The new algorithm discards the previous MSM and NTT calculations, which reduces the optimization effect for GPUs. Since the process of generating witness involves executing a program that varies with the epoch, there are some dependencies among the instructions that require serial execution, making parallelization a certain challenge.

This change may affect existing mining strategies and hardware advantages, requiring mining participants to readjust and adapt to new algorithm requirements. At the same time, this may also provide a fairer competitive environment for new participants, helping to enhance the decentralization of the network.