Zether: Towards Privacy in a Smart Contract World.
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Presented at FinancialCryptographyandDataSecurity 2020 by
Smart contract platforms such as Ethereum and Libraprovide ways to seamlessly remove trust and add transparency tovarious distributed applications. Yet, these platforms lack mechanismsto guarantee user privacy, even at the level of simple payments, which areessential for most smart contracts.In this paper, we propose Zether, a trustless mechanism for privacypreserving payments in smart contract platforms. We take an account-basedapproach similar to Ethereum and Libra for efficiency and usability. Zetheris implemented as a smart contract that keeps account balances encryptedand exposes methods to deposit, transfer, and withdraw funds to/fromaccounts through cryptographic proofs at only a small cost.We address several technical challenges to protect Zether against replayattacks and front-running situations and develop a mechanism to enableinteroperability with arbitrary smart contracts, making applications likeauctions, payment channels, and voting privacy-preserving. To makeZether efficient, we propose Σ-Bullets, a zero-knowledge proof system thatis optimized for Σ-protocols. We implement Zether as an Ethereum smartcontract and show its practicality by measuring the amount of gas used bythe Zether contract. A Zether confidential transaction costs about 0.014ETH or approximately $1.51 (as of early 2019), which can be drasticallyreduced with minor changes to Ethereum that we describe in the paper.The full version of the paper is available online [BAZB19].