Aleo was born from a desire to achieve the impossible – to build a user experience on the web that is both truly personal and truly private. Aleo is the first platform to offer fully private applications. Aleo achieves this by leveraging decentralized systems and zero-knowledge cryptography to protect user data on the web. At its core, Aleo offers users and application developers unbounded compute with absolute privacy.
By architecting Aleo as a blockchain that is private-by-default, open-source, and built for the web, we believe Aleo is uniquely positioned to address the shortcomings of blockchain adoption. With Aleo, users have access to a world of truly personalized web services without giving up control of their private data.
Introducing Aleo
Aleo is built for the web. Unlike existing solutions that seek to replace it, Aleo is designed to integrate with it. For users, Aleo introduces new experiences that are both truly personal and truly private. And for developers, Aleo introduces a programming model that integrates with existing web applications.
In the coming days, we are releasing Developer Preview I.
To write private applications on Aleo intuitively and easily, we are developing a programming language called Leo. Leo looks and feels just like a traditional programming language. Yet under the hood, Leo is far more complex. Leo abstracts low-level cryptographic concepts and makes it easy to integrate private applications into your stack.
Aleo Studio, the first IDE for writing zero-knowledge applications
For developers, Aleo Studio is designed to simplify the development cycle. Under the hood, Aleo Studio connects you to the network, making it easy to quickly test and publish transactions on the web.
And to make it simple to bundle and share your work, we have built a package manager for Leo. Aleo Package Manager is the first package manager for zero-knowledge circuits.
- It includes collaborative features like teams and organizations to make it easy to work with friends and colleagues on private applications.
- In addition, Aleo Package Manager is integrated with Aleo Studio, making it easy to import and publish new packages without having to leave the editor.
The challenge of ecosystem adoption
First, existing blockchains are inadequate for real-world applications
For example, the notion of building smart contract mixers and dark pools on Ethereum remains flawed. Without privacy, these applications cannot fully protect user activity. It simply does not work.
Second, technologies should not be developed for their own sake
To us, technology is worth its development when it solves a real-world problem. Instead, many blockchains are built as solutions in search of problems. We believe you have to start from the user experience and work backward to the technology. The best technologies are easy – even joyful – to use, and make the world better.
Third, new technologies attract actors who complicate a technology’s value proposition
We see it in many ecosystems, including ours. For example, the recent advent of closed-source scalability engines has been a second wave to the initial era of “permissioned blockchains”. It goes without saying that vendor lock-in is rarely a good thing, If it lives online, somebody else owns it. The business model of the web is to provide free services in exchange for personal data. This model is antiquated and puts users at odds with providers. The user is forced to give up their data in exchange for services they want, at the cost of personal privacy.
Users should not have to hand over their private data
Instead, users should be able to run their data on transparent algorithms from the provider. And providers should not need to store, process, or report user data.
How Zero-Knowledge is Rebalancing the Scales of the Internet
The Breakdown of Data Ownership
A decade ago, the extent to which we rely on the internet now would have been hard to imagine. Today, however, the majority of our economic and social activity occurs online. The benefits of this change are especially clear amid the COVID-19 pandemic. Businesses that never relied on the internet before are using it to reach new clients and customers in order to remain afloat. Families are using it to stay connected while physically distanced over the holiday season.
This intangible data economy is massive – larger than any commodity, including oil. And just like oil in the early 20th century, data has grown increasingly centralized in the hands of a few companies.
- These data monopolies not only pose threats to data privacy and censorship. Monopolies are bad for economies. They encourage rent-seeking, stifle growth, depress innovation, and harm consumer welfare.
- Web 2.0 companies that could be considered data monopolies can’t deliver a personalized web experience. The state of the internet of today is a few monopolies that collect vast amounts of data yet fail to deliver a personalized user experience. But how can we expect to fix this without being even more liberal with the data we share? The good news is that there is a solution that does allow us to achieve both a more private and more personalized web experience: zero-knowledge proofs.
An Evolution in Privacy – Zero Knowledge
A zero-knowledge proof is a cryptographic protocol where one party (the prover) proves to another party (the verifier) that something is true without revealing how it is true. It turns out that proving the truth of something without revealing the information itself can be a powerful primitive. Zero-knowledge allows us to use the internet more powerfully than we do today without leaving extractable traces of our data everywhere. Think of each of us as a “prover” and any service on the internet as a verifier:
- We could file insurance claims that can be reviewed, verified, and approved without needing to expose the rest of our insurance identity, which creates unethical reasons for claims to be denied.
- We could prove relevant facts about ourselves and our identity to any application without fear that the information could be lost, stolen, or abused. This use case, in particular, is increasingly relevant as we anticipate a future where much of our biological data/genetic information is used to provide personalized medical care and services.
Looking Ahead at Zero-Knowledge
Using zero-knowledge cryptography, we can enjoy the internet’s benefits of global connection without paying the invisible cost of our privacy. We don’t need to scrap everything and rebuild from the ground up. Rather, we can design new applications and new ways of interacting with those applications.
What does Transparency Cost You?
Blockchain technology was, from its inception, architected to be transparent by default. This architecture is a sharp contrast to today’s Web 2.0, defined by closed ecosystems owned by corporations that profit from information asymmetry. This asymmetry exists because these companies act as gatekeepers, collecting more data from you than you realize and monetizing that data at your expense.
Asymmetry on Public Networks
Transactions on a public blockchain are visible to everyone, whether they are active participants on the network or not. The fact that these networks are open prevents any single entity from monopolizing user data, as Web 2.0 monopolies do today. However, a fully transparent system opens the door to exploitation by a potentially much larger number of actors.
Consider a common use case for DeFi: trading
Critics of centralized stock brokerages (like Robinhood) claim that those entities sell the order flow to hedge funds that can then “front-run” user-submitted trades.
- But Ethereum, anyone can see the order flow (either by running a node themselves or using a service).
- So even though the system isn’t intentionally “rigged”, it’s easy for opportunistic individuals (or bots) to capitalize on the publicly-available data on an open blockchain. This is the fundamental idea of the “Dark Forest” problem described here.
Miners can also front-run, in a scenario known as Miner Extractable Value (MEV)
MEV refers to the amount of profit ecosystem miners can extract from the network by reordering the mempool to execute self-benefiting transactions. For example, miners may recognize that pending transactions in a mempool include a considerable number of transactions between a token pair on a DEX. With that knowledge, miners can optimally place their trades. Because the miners are responsible for ordering transactions, they can ensure their transactions occur at the most profitable time.
Towards a Solution: Absolute Privacy by Default
A naive approach to solving this asymmetry on public networks is to hide everything and make the system fully private. But absolute privacy eliminates one of the most significant benefits of an open network: composability. In an open network defined by data transparency, smart contracts can autonomously interact with and access any on-chain information.
- The DeFi ecosystem, DAOs, and other composable contracts all rely on transparent access to data. Networks that establish absolute privacy by default ensure that no data can be exploited, but also preclude the creation of the incredibly powerful decentralized applications that define why crypto is revolutionary.
- Moreover, privacy is not binary. It exists along a spectrum, and matters more or less to different individuals and/or institutions depending on the context. Take Venmo for example. You may want to show how much money you donated to a particular charity this past year. And you probably don’t mind that the details of a payment you make to a friend of yours are visible to that friend. But you most likely would prefer not to disclose the amount of your paycheck to everyone.
Similar decisions should be available to people transacting on blockchain networks. Each person should be able to toggle each transaction to tune what they want to share and what they want to conceal. Today’s blockchain ecosystem does not enable that choice. Transparency is the default, and users cannot opt out, let alone choose degrees of privacy.
Aleo: Opt-out Privacy by Default
When information asymmetry exists, it costs users. While public blockchains like Bitcoin or Ethereum remove centralized rent-seekers, they do not fundamentally solve the problem of information asymmetry.
- Total privacy, however, weakens a killer feature of these emerging networks by preventing contract composability that enables DeFi, DAOs, and other smart contracts.
- This is why we founded Aleo – to address the paradox of asymmetry on public networks by accelerating the adoption of zero-knowledge into the blockchain ecosystem. Aleo’s specific zero-knowledge solution, Zexe, supports complete programmability and privacy.
Just as important, Aleo provides opt-out privacy, ensuring ultimate control lies with the user, who can choose what information they wish to be public. Aleo enables network participants to interact on a public network with complete privacy without sacrificing any degree of performance or power that decentralized networks enable.
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