Let's see why Aleo and the zero-disclosure proof technology it uses is considered so useful and popular in the world?

To do this, let's dive into the history of evidence with zero disclosure.

One of the use cases in the creation of Bitcoin and other cryptocurrencies was to provide anonymity of payments and their confidentiality. At first this was the case, but with the growth of the network and the increase of the "network effect", it became clear that the existing blockchain technology works exactly the opposite.

All transactions were fully transparent and readable and therefore potentially traceable. As a result, the first projects dealing with deanonymization of addresses began to appear - for example, the famous Chainalysis was founded in 2014 and at the moment they are leaders in this direction with an estimate of $8.6 billion.

But there is always a reaction to the action: anonymous coins Monero, Dash, Zcash began to appear. All were built on the Bitcoin code and implemented cryptographic encryption tools to anonymize transactions.:

• Dash – uses asset mixing

• Monero - ring signatures

• Zcash - ZKP technology (proof with zero disclosure)

All these anonymous cryptocurrencies are about 10 years old, but their demand is at a very low level, with the exception of one technological solution - ZKP technology. Of all 3 technologies, it alone has gained wide development and is gaining great popularity in recent years.

ZKP (zero-knowledge proof) translates as proof with zero disclosure. Its content is reduced to a method of proof knowledge of information without disclosing the information itself.

The verifying party (validators, smart contracts) ask and receive answers to these questions many times without receiving additional "extra" data about the transaction or the user. All answers must be correct, otherwise the transaction will not be completed. Thanks to this, high anonymity of users, transactions and their data is ensured.

This very concept was originally implemented in the cryptocurrency Zcash, however, at that time it did not receive proper understanding and use. Only about 5 years later, active conversations about this technology began again. This was primarily due to 2 issues:

1. Low bandwidth is one of the main problems for the entire crypto space, which has been tried to solve almost since the beginning of the industry. For this, various solutions are created - static and dynamic sharding, parallel processing of transactions, sidechains, rollups and other Layer solutions-2.

2. The growth of leaks of personal data of customers from various services, including the largest ones. Facebook especially stood out here - the data of users of this social network is leaked to the network every year. Yes, it took place in 2021 more than 1.5 billion personal data was leaked, which is the largest merged database in the world. The same problems are observed in other IT giants: Google, Microsoft, Netflix and other smaller companies.

If the functionality of the ZKP solution to ensure anonymity was understood by many and knew how it should function almost from the very beginning, no one thought about using ZKP as a technology to increase scalability. That is why until 2021, almost no one knew what it was and why this decision was needed.

At the time, it seemed like a dead end branch of development that could only be applied as a blockchain anonymization concept. However, working with ZKP as a confidential solution seemed pointless since there was not much demand for it. Therefore, until 2021, only "fanatics" and enthusiasts were engaged in this direction. Everything changed with the appearance of the first products based on ZKP.

Several teams have been working on ZKP and its sister solutions SNARK and STARK since 2018. The main ones can be called Matter Labs (developing zkSync), Starkware (developing StarkEx and Starknet), O(1) Labs (developing Mina). By the end of 2020, testnets were already actively working in many of these projects..

The real boom happened in 2021 - many projects launched a mainnet using ZK-solutions:

1. zkSync Lite - June 2020

2. dYdX - February 2021

3. Mina - March 2021

4. Sorare - June 2021

5. MetisDAO - November 2021

6. Starknet - November 2021

Most of them are full-fledged blockchain networks of either Layer-1 or Layer-2 level. They, in many ways, set the trend for the development of ZKP, but all this was only the beginning.

After the launch of projects higher than their mainnets, a higher speed and cheapness of transactions became noticeable. This was partly due to the fact that at that moment Layer-2 solutions in the form of Optimism and Arbitrum began to be actively developed. However, they were built on Optimistic Roll-ups technology. If we do not delve into the technical details, then this is a more short-term solution or, as programmers call it, a “crutch”, which solves the problem right here and now, but has vague prospects from the point of view of a long-term vision.

Moreover, Vitalik Buterin himself has repeatedly stated that it is ZKP solutions that are more sustainable in the long-term future and more useful for the blockchain. Many other famous developers echoed his words. And in 2021, the creator of Ethereum put the zk-rollups technology on central to the development of Ethereum.

After that, a large stream of views moved to the side of ZKP-concepts as more scalable systems. The market saw that this technology was really progressive, and so many new teams rushed to build their products in this direction, and many investors, especially Tier-1 and Tier-2, supported them in this. As a result, in 2021-2022 we saw a huge amount of investment in projects related to ZKP solutions. First of all, these were Layer-1 and Layer-2 networks. To understand how interesting and trendy this technology has become for investors, it is enough to look at the following rounds of investments:

Aleo - a new Layer-1 blockchain built on the basis of ZKP. Spent immediately 3 investment round in a year, managing to attract a fantastic $298 million. List of investors - the best representatives of Tier-1 and Tier-2 with the lead investor in the person of the legendary venture fund a16z.

From these data, several facts can be mentioned:

1. In 2021-2022, funding for zkp was mainly received by Layer-1 and Layer-2 networks. This is due to the fact that these projects are currently laying the infrastructure of this technology..

2. During the last bull market, the anonymity and ZKP sector became the most funded, along with the DeFi segment. In total, all companies in this sector have raised several billion dollars..

3. Such a huge amount of investment suggests that all the largest investors are making a key bet on this decision. And this is primarily due to the fact that ZKP solves the 2 main problems described above - scalability and privacy.

   and based on the above, we can imagine how useful and popular the alley blockchain will be after its launch. We are very much looking forward to the release to the mainnet.

Let's see why Aleo and the zero-disclosure proof technology it uses is considered so useful and popular in the world?

To do this, let's dive into the history of evidence with zero disclosure.

One of the use cases in the creation of Bitcoin and other cryptocurrencies was to provide anonymity of payments and their confidentiality. At first this was the case, but with the growth of the network and the increase of the "network effect", it became clear that the existing blockchain technology works exactly the opposite.

All transactions were fully transparent and readable and therefore potentially traceable. As a result, the first projects dealing with deanonymization of addresses began to appear - for example, the famous Chainalysis was founded in 2014 and at the moment they are leaders in this direction with an estimate of $8.6 billion.

But there is always a reaction to the action: anonymous coins Monero, Dash, Zcash began to appear. All were built on the Bitcoin code and implemented cryptographic encryption tools to anonymize transactions.:

• Dash – uses asset mixing

• Monero - ring signatures

• Zcash - ZKP technology (proof with zero disclosure)

All these anonymous cryptocurrencies are about 10 years old, but their demand is at a very low level, with the exception of one technological solution - ZKP technology. Of all 3 technologies, it alone has gained wide development and is gaining great popularity in recent years.

ZKP (zero-knowledge proof) translates as proof with zero disclosure. Its content is reduced to a method of proof knowledge of information without disclosing the information itself.

The verifying party (validators, smart contracts) ask and receive answers to these questions many times without receiving additional "extra" data about the transaction or the user. All answers must be correct, otherwise the transaction will not be completed. Thanks to this, high anonymity of users, transactions and their data is ensured.

This very concept was originally implemented in the cryptocurrency Zcash, however, at that time it did not receive proper understanding and use. Only about 5 years later, active conversations about this technology began again. This was primarily due to 2 issues:

1. Low bandwidth is one of the main problems for the entire crypto space, which has been tried to solve almost since the beginning of the industry. For this, various solutions are created - static and dynamic sharding, parallel processing of transactions, sidechains, rollups and other Layer solutions-2.

2. The growth of leaks of personal data of customers from various services, including the largest ones. Facebook especially stood out here - the data of users of this social network is leaked to the network every year. Yes, it took place in 2021 more than 1.5 billion personal data was leaked, which is the largest merged database in the world. The same problems are observed in other IT giants: Google, Microsoft, Netflix and other smaller companies.

If the functionality of the ZKP solution to ensure anonymity was understood by many and knew how it should function almost from the very beginning, no one thought about using ZKP as a technology to increase scalability. That is why until 2021, almost no one knew what it was and why this decision was needed.

At the time, it seemed like a dead end branch of development that could only be applied as a blockchain anonymization concept. However, working with ZKP as a confidential solution seemed pointless since there was not much demand for it. Therefore, until 2021, only "fanatics" and enthusiasts were engaged in this direction. Everything changed with the appearance of the first products based on ZKP.

Several teams have been working on ZKP and its sister solutions SNARK and STARK since 2018. The main ones can be called Matter Labs (developing zkSync), Starkware (developing StarkEx and Starknet), O(1) Labs (developing Mina). By the end of 2020, testnets were already actively working in many of these projects..

The real boom happened in 2021 - many projects launched a mainnet using ZK-solutions:

1. zkSync Lite - June 2020

2. dYdX - February 2021

3. Mina - March 2021

4. Sorare - June 2021

5. MetisDAO - November 2021

6. Starknet - November 2021

Most of them are full-fledged blockchain networks of either Layer-1 or Layer-2 level. They, in many ways, set the trend for the development of ZKP, but all this was only the beginning.

After the launch of projects higher than their mainnets, a higher speed and cheapness of transactions became noticeable. This was partly due to the fact that at that moment Layer-2 solutions in the form of Optimism and Arbitrum began to be actively developed. However, they were built on Optimistic Roll-ups technology. If we do not delve into the technical details, then this is a more short-term solution or, as programmers call it, a “crutch”, which solves the problem right here and now, but has vague prospects from the point of view of a long-term vision.

Moreover, Vitalik Buterin himself has repeatedly stated that it is ZKP solutions that are more sustainable in the long-term future and more useful for the blockchain. Many other famous developers echoed his words. And in 2021, the creator of Ethereum put the zk-rollups technology on central to the development of Ethereum.

After that, a large stream of views moved to the side of ZKP-concepts as more scalable systems. The market saw that this technology was really progressive, and so many new teams rushed to build their products in this direction, and many investors, especially Tier-1 and Tier-2, supported them in this. As a result, in 2021-2022 we saw a huge amount of investment in projects related to ZKP solutions. First of all, these were Layer-1 and Layer-2 networks. To understand how interesting and trendy this technology has become for investors, it is enough to look at the following rounds of investments:

Aleo - a new Layer-1 blockchain built on the basis of ZKP. Spent immediately 3 investment round in a year, managing to attract a fantastic $298 million. List of investors - the best representatives of Tier-1 and Tier-2 with the lead investor in the person of the legendary venture fund a16z.

From these data, several facts can be mentioned:

1. In 2021-2022, funding for zkp was mainly received by Layer-1 and Layer-2 networks. This is due to the fact that these projects are currently laying the infrastructure of this technology..

2. During the last bull market, the anonymity and ZKP sector became the most funded, along with the DeFi segment. In total, all companies in this sector have raised several billion dollars..

3. Such a huge amount of investment suggests that all the largest investors are making a key bet on this decision. And this is primarily due to the fact that ZKP solves the 2 main problems described above - scalability and privacy.

   and based on the above, we can imagine how useful and popular the alley blockchain will be after its launch. We are very much looking forward to the release to the mainnet.