Aleo: Blockchain Innovation for Privacy Protection and Scalability

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 while protecting personal data.

Project Overview

Privacy

The core of Aleo is zero-knowledge proof technology, allowing transactions and the execution of smart contracts to occur while maintaining privacy. The transaction details of users are hidden by default, while allowing for selective disclosure when necessary, making it very suitable for the development of DeFi applications. The main components include:

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

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

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

Aleo also provides an integrated development environment (IDE) and software development kit (SDK), supporting developers in quickly writing and publishing applications. Developers can deploy applications in Aleo's program registry without relying on third parties, 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 method significantly increases transaction processing speed and system scalability, avoiding issues of network congestion and high costs.

Consensus Mechanism

Aleo has introduced AleoBFT, a consensus mechanism with a hybrid architecture that combines the instant finality of validators with the computational capabilities of provers. AleoBFT not only increases the level of decentralization of the network but also enhances its performance and security.

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

2. Decentralized Guarantee: By separating block production from coinbase generation, validators are responsible for generating blocks, while provers perform proof calculations to prevent a few entities from monopolizing the network.

3. Incentive Mechanism: Validators and Provers share Block rewards; encouraging Provers to become Validators by staking tokens, enhancing the network's decentralization and computing power.

Aleo allows developers to create applications that are not subject to gas limitations, making it particularly suitable for applications like machine learning that require long-running processes.

Project Progress

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

1. ARC-100 Voting Approved: The proposal involving compliance aspects, locking of funds on the network, and security measures such as delayed deposits has been approved. The team is making final adjustments.

2. Validator Incentive Program: Scheduled to 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 distributed as rewards.

3. Initial Supply and Circulating Supply: The initial supply is 1.5 billion tokens, with an initial circulating supply of approximately 10%. These tokens primarily come from Coinbase tasks and will be distributed over the first six months, including rewards for staking, running validators, and validating nodes.

4. Testnet Beta Reset: This is the final network reset, and no new features will be added after completion; the network will be similar to the mainnet.

5. Code freeze: 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 ultimately 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.

Algorithm Update Interpretation

The latest version of Aleo's algorithm core is called Synthesis Puzzle, which is centered around generating a common EpochProgram fixed for each epoch. By constructing R1CS proof circuits for the input and EpochProgram, it produces corresponding R1CS assignments (i.e., witnesses) that serve as leaf nodes of a Merkle tree. After calculating all leaf nodes, the Merkle root is generated and converted into the proof_target of the solution.

Changes and Impacts of Mining

After this update, the puzzle has changed from generating proof to generating witness. The calculation logic for 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. At the same time, the process of generating witness occurs during the execution of a program that follows the changes of the epoch, where some instructions will have dependencies that are executed sequentially, making parallelization quite challenging.

This change will have a significant impact on existing mining optimization strategies, requiring miners to readjust and adapt to the new algorithm characteristics.