Hello zk builders and privacy experts!
This is Mystiko.Network, a multichain zk privacy as service solution.
Would love to initiate a discussion on how to balance compliance and on-chain privacy. and would love to invite anyone interested to test our latest auditable zk privacy solution! Would love your comments on this solution and feel free to contact us on TG and discord (please find our TG/Discord/Email contact in the blog as we cannot post more than 2 links)
:
- Introduction article of Mystiko Auditable ZK privacy solution
The world’s first Auditable Zero-knowledge Private Transaction Feature is now live on Mystiko.Network! | by Mystiko.Network | Sep, 2022 | Medium - Mystiko Auditable zk privacy (please test):
https://auditablezk.mystiko.network/
Quick intro of Mystiko auditable zk privacy
Mystiko designed the first decentralized auditing system for onchain private transactions. In Mystiko’s decentralized auditing system, a decentralized auditing committee, consisting of reputable institutes and entities chosen by the community, will be established and the committee will support auditing the transaction flow of suspicious deposits from bad actors while protecting the privacy of regular users.
In Mystiko V3 design, when compliance responses are expected by the regulator, the transactions of suspicious assets will be revealed and audited in a decentralized manner by trusted auditors based on majority votes of the auditing committee.
# Why decentralized audit in private transaction?
On August 8th 2022, the U.S. The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash and called it “a significant threat to national security.” The underlying concerns of regulators might come from the fact that there is no visibility of suspicious transaction flow, i.e. the outlet and recipient of potential ‘laundered money’, and inability to separate assets of bad actors and users with daily privacy demands.
However, there are many legitimate reasons why someone would want to use privacy features. For example, an employee getting paid by their company in crypto may not want their employer to know all of their financial details. An NFT investor may not want to become the target of potential harassment or robbery. Donors might want to keep their identities hidden when they donate funds.
To balance the right to preserve privacy for users without illicit purpose and the compliance request of global regulators, Mystiko designed the first decentralized auditing system for onchain private transactions.
How does Mystiko auditable zk privacy solution work?
-
Auditing committee foundation : Trusted auditors of Mystiko.Network, such as regulators, reputational financial institutions and auditing firms, will be authorized to create auditor secret keys, wewhose paired public keys that are used for private transaction data auditing.
-
Encryption: When a private deposit is withdrawn or transferred, while zero-knowledge proof is generated, the linkage between deposit and withdrawal/transfer will be split into multiple shares and encrypted with the public keys of auditors. Each auditor will have an encrypted secret share of the linkage data. [Tech reference: Shamir’s Secret Share]
-
Audit: In order to view the complete info of a private transaction, the auditing committee will have to reach an agreement by passing a majority vote to decrypt the encrypted transaction history, with their privately stored secret keys.
About Mystiko.Network
Mystiko.Network is the base layer of web3 with both connectivity and confidentiality. Leveraging zero knowledge proof with industry leading “zk of zk” technology, Mystiko.Network guarantees interoperability, scalability and privacy, all at once.