Cryptography firm Bolt Labs has launched a private payment solution, zkChannels, on Tezos.Â
The startup is now working with Tezos developer groups Nomadic Labs and Metastate to implement the tech in the next network update.Â
Similar to the Lightning Network, zkChannels is a payment channel for blockchains but with zero-knowledge proofs attached. A current problem with Lightning â a payment solution built on top of the Bitcoin blockchain âÂ is that in certain settings, you can see other peopleâs de facto bank accounts, called funding channels. zkChannel hides that information from merchants.
âzkChannels is a chain-agnostic anonymous off-chain protocol that enables cheap and private value transfer between a customer and merchant,â Bolt Labs said in a blog post.
Lightning developers are working on similar concepts through different means with projects such as multi-part payments.
Bolt Labs was founded in 2018 by J. Ayo Akinyele with Zcash co-founders Ian Miers and Matthew Green. The privacy project raised $1.5 million in an April 2019 seed round joined by Lemniscap, Xpring and others in addition to numerous angel investors such as Zcash co-founder Zooko Wilcox.
Akinyele said the team built on top of Tezos to act as a testing ground of sorts for other blockchains.Â
According to the firmâs announcement post:
We are also interested in building a cross-chain bridge via zkChannels for connecting Zcash or Bitcoin to Tezos, and provides censorship-resistance to decentralized finance (DeFi) applications.
Tezos raised $232 million in a 2017 initial coin offering (ICO), marketing itself as the âself-amendingâ ledger. That means the blockchain can conduct periodic code updates due to its hands-on governance procedures. For example, academic work detailing a possible selfish mining scheme led to a code patch mere weeks after the paperâs publication.
zkChannels is Bolt Labsâ first account-model implementation of its tech, Akinyele told CoinDesk. (Blockchains come in two flavors: the unspent transaction output (UTXO) model used by Bitcoin and the account model employed by Ethereum.) The firm also has private channel implementations for both Bitcoin and Zcash, with the latter still in development.Â
The use of a payment channel on a blockchain that barely breaks $100 in average daily fees â compared to the hundreds of thousands of dollars processed by Bitcoin and Ethereum daily â seems questionable.Â
Indeed, as CoinDesk reported, 76% of Tezos transactions can be tied back to network validation, called âBaking,â or a coin âfaucetâ that spouts free XTZ.
Akinyele said Bolt Labs built zkChannels on Tezos over other candidates due to the blockchainâs malleable governance. Moreover, zkChannels is easier to implement on a more âpairing friendlyâ curve called BLS12-381 that Tezos is currently adding. Ethereum operates on another older elliptic curve model and will not support BLS until a network overhaul called Eth 2.0 is completed.
âWeâre looking at the fact that Tezos is a new blockchain, but that has a lot of promise based on the building blocks itâs making available to developers,â Akinyele said.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.