Trusted setups are a pre-commitment vulnerability. A ceremony where participants generate and discard secret material creates a persistent cryptographic backdoor. If the secret is ever recovered, the system's security is retroactively broken.
zk-rollups-the-endgame-for-scaling
Blog
Why Trusted Setups Are an Unacceptable Single Point of Failure
An analysis of how Groth16's reliance on toxic waste ceremonies creates a systemic security and governance risk that directly contradicts the trustless foundation of ZK-Rollups and the broader blockchain ecosystem.
introduction
THE SINGLE POINT OF FAILURE
Introduction
Trusted setups create a systemic risk that undermines the entire security model of a blockchain.
This risk is non-amortizable. Unlike a validator slashing event, a compromised trusted setup invalidates all past and future transactions. This is a fundamental asymmetry compared to live consensus failures in networks like Solana or Ethereum.
The industry is moving on. Major protocols like Aztec and Zcash have undergone complex ceremonies, but new systems like Mina Protocol use recursive zk-SNARKs to eliminate the need entirely. The future is trust-minimized.
thesis-statement
THE SINGLE POINT OF FAILURE
The Core Contradiction
Trusted setups create a fundamental security vulnerability that contradicts the decentralized ethos of blockchain.
Ceremony-based cryptography fails because it introduces a persistent, systemic risk. A single participant's compromised secret can break the entire system's security guarantees, as seen in the initial Groth16 setup for Zcash.
Trust is not a primitive that scales. Unlike verifiable computation or zero-knowledge proofs, trusted setups require faith in human participants, creating a centralized attack vector that protocols like Tornado Cash Nova and early Aztec iterations accepted.
The industry standard is shifting from trusted to transparent setups. Projects like Mina Protocol and the upcoming Penumbra network reject the model, opting for recursive SNARKs and other trust-minimized constructions as the only viable long-term path.
deep-dive
THE SINGLE POINT OF FAILURE
Deconstructing the Trust Assumption
Trusted setups introduce a catastrophic, non-cryptographic dependency that undermines the entire security model of a protocol.
A trusted setup is a backdoor. It requires participants to destroy secret material after a one-time ceremony. If a single actor fails to comply, the entire system's security is permanently compromised, creating a silent time bomb.
This violates the core blockchain principle of verifiability. Unlike Nakamoto consensus or BFT proofs, a trusted setup's security is not mathematically verifiable by the network post-facto. You must trust the ceremony's execution, not its output.
The risk is asymmetric and perpetual. Protocols like early Zcash or various zk-rollup implementations depend on these ceremonies. A single leaked secret from years ago can retroactively decrypt all past transactions or forge future proofs.
Evidence: The Groth16 ceremony for Zcash involved six participants. The compromise of any one participant's machine during that event would have broken the $2B+ network's privacy guarantees forever.
WHY TRUSTED SETUPS ARE AN UNACCEPTABLE SINGLE POINT OF FAILURE
The Trust Spectrum: A Comparative Analysis of ZK Proof Systems
Comparing the trust assumptions, security models, and operational risks of major ZK proof system categories.
| Trust & Security Dimension | Trusted Setup (e.g., Groth16, Plonk) | Transparent Setup (e.g., STARKs) | Universal Setup (e.g., Marlin, Plonk w/ Powers of Tau) |
|---|---|---|---|
Requires a Ceremony | |||
Ceremony is a Single Point of Failure | Partially (requires one-time, universal ceremony) | ||
Post-Ceremony Compromise Breaks All Proofs | |||
Trusted Assumptions | Discrete Log (e.g., in pairing groups) | Collision-Resistant Hashes | Discrete Log (in universal CRS) |
Quantum Resistance | |||
Recursive Proof Support | |||
Typical Proving Time (for a tx) | < 1 sec | 2-5 sec | < 1 sec |
Verification Gas Cost on EVM | ~450k gas | ~2.5M gas | ~500k gas |
counter-argument
THE SINGLE POINT OF FAILURE
The Ceremony Defense (And Why It Fails)
Trusted setup ceremonies create a permanent, unverifiable backdoor that undermines the entire security model of a protocol.
Ceremonies are a permanent backdoor. The security of a zk-SNARK system like Groth16 relies on the safe disposal of toxic waste. A single participant's failure to delete their secret permanently compromises the system, enabling infinite counterfeit proofs.
The '1-of-N' trust model fails. Protocols like Aztec and Zcash rely on multi-party ceremonies. The security claim is that only one honest participant is needed, but this ignores the practical attack surface of collusion, coercion, or infiltration during the ceremony's execution.
Verifiability is impossible. Unlike a live blockchain, a ceremony is a one-time historical event. Users must trust the ceremony's organizers, like the Electric Coin Company for Zcash, rather than verifying the setup's integrity themselves through code.
Evidence: The 2018 Zcash Powers of Tau ceremony involved over 200 participants. While robust, its security still hinges on the unproven assumption that at least one participant was honest and uncompromised—a faith-based assertion.
risk-analysis
SINGLE POINT OF FAILURE
The Slippery Slope: Cascading Risks of a Compromised Setup
Trusted setups create a systemic vulnerability where a single breach can compromise the entire cryptographic foundation of a network, invalidating years of work.
01
The Ceremony is a Sword of Damocles
A successful attack on a trusted setup ceremony, like Zcash's original Powers of Tau or older zk-SNARK circuits, is permanent and undetectable. The resulting 'toxic waste' allows an attacker to forge unlimited fraudulent proofs.
- Permanent Risk: Compromise is forever; the only fix is a hard fork to a new setup.
- Undetectable Fraud: Invalid transactions appear valid, enabling silent theft of $1B+ in shielded assets.
Permanent
Compromise
$1B+
Asset Risk
02
The Multi-Chain Contagion Vector
A compromised setup doesn't isolate risk. Bridges and interoperability protocols that rely on the same cryptographic primitive (e.g., a specific zk-SNARK curve) become infection vectors.
- Cross-Chain Risk: A flaw in a library like
circomorsnarkjscould affect dozens of L2s and appchains. - TVL Threat: Cascading bridge failures could threaten $10B+ in locked value across chains like Polygon zkEVM, zkSync, and Scroll.
$10B+
TVL at Risk
Dozen+
Chains Exposed
03
Institutional Memory is a Liability
Trust is concentrated in a small, known group of ceremony participants. Over decades, coercion, hacking, or simple loss of private keys becomes a statistical certainty.
- Key Person Risk: The security of $10B+ in assets relies on the continuous integrity of ~10 individuals.
- Time Decay: The 20+ year lifespan of a setup far exceeds the security horizon of any individual or institution.
20+ Years
Risk Horizon
~10 People
Single Point
04
The Solution: Trustless, Upgradable Cryptography
The only escape is cryptographic agility and elimination of trusted parties. This means adopting transparent, post-quantum secure setups or constantly refreshable mechanisms.
- Transparent Setups: Use STARKs or Bulletproofs which require no trusted ceremony.
- Upgradable Circuits: Design systems like Aztec to allow cryptographic proofs to be upgraded without a new trusted event.
0
Trusted Parties
Post-Quantum
Security
future-outlook
THE ARCHITECTURAL IMPERATIVE
The Path Forward: Trustless or Bust
Trusted setups are a systemic risk that contradicts the core value proposition of decentralized systems.
Trusted setups are a backdoor. They create a single, centralized point of failure where a single actor's compromise invalidates the entire system's security. This is the antithesis of blockchain's cryptographic guarantees.
The market penalizes trust assumptions. Protocols like Tornado Cash (pre-sanctions) and Aztec demonstrated that users migrate to systems with stronger privacy and security foundations. Trusted ceremonies, like those for zk-SNARKs, are a temporary bootstrap, not a permanent solution.
The endgame is perpetual trustlessness. Systems must be trust-minimized from genesis or have a credible path to remove trusted parties. Layer 2s like Arbitrum and Optimism are actively working to eliminate their multi-sigs, proving this is a non-negotiable evolution.
Evidence: The $625M Ronin Bridge hack was enabled by a compromise of 5 out of 9 validator keys in a trusted multi-sig. This single event validates the existential risk of centralized trust models in DeFi infrastructure.
takeaways
THE CRYPTOGRAPHIC SINGLE POINT OF FAILURE
Executive Summary: Key Takeaways for Builders
Trusted setups are a foundational but fatal flaw, creating systemic risk for protocols with billions in TVL.
01
The Ceremony is a Ticking Time Bomb
A trusted setup's security collapses if a single participant is malicious or compromised. This creates a permanent, hidden backdoor.\n- The Risk: A single leaked 'toxic waste' parameter can forge infinite tokens or drain the system.\n- The Reality: Most ceremonies rely on ~100 participants, a number easily targeted by sophisticated adversaries.
1/100
Failure Threshold
Permanent
Risk Window
02
Zcash's Original Sprout Ceremony
The canonical case study in systemic risk. The 2016 'Powers of Tau' ceremony had critical flaws.\n- The Flaw: Participants used consumer-grade, internet-connected hardware, vulnerable to remote attacks.\n- The Fallout: The ceremony's security is now unverifiable, casting permanent doubt on the integrity of the original ZEC shield pool.
2016
Ceremony Date
Unverifiable
Current Status
03
The Solution: Trustless Cryptography
Builders must demand setups with no trusted parties. This is now a non-negotiable requirement.\n- Use MPC Ceremonies: Like Ethereum's KZG for EIP-4844, which requires >â…” of participants to be honest.\n- Demand Transparency: Every phase must be publicly verifiable and auditable in perpetuity, unlike opaque trusted setups.
>66%
Honest Majority
0
Trusted Parties
04
Tornado Cash's Persistent Vulnerability
Despite its notoriety, Tornado Cash's core privacy relied on a trusted Perpetual Powers of Tau ceremony.\n- The Irony: A tool for trustless privacy was built on a foundation of trust.\n- The Lesson: Even $7B+ in processed volume can be retroactively invalidated if the setup is ever compromised.
$7B+
Processed Volume
1 Point
Single Failure
05
The Builder's Mandate: Audit or Reject
Due diligence for any protocol using zk-SNARKs (like zkSync, Aztec) must start with the setup.\n- Action 1: Reject any system using a 'trusted' or 'small committee' setup.\n- Action 2: Favor systems using universal and updatable setups (e.g., PLONK, STARKs) which amortize risk.
zk-SNARKs
Primary Risk
STARKs/PLONK
Preferable
06
The Economic Reality: Uninsurable Risk
No insurance protocol can underwrite the tail risk of a compromised trusted setup. The failure mode is total and irreversible.\n- The Math: A $10B TVL protocol's setup failure results in a $10B+ instantaneous loss.\n- The Implication: This risk is priced into every asset dependent on these systems, creating a hidden tax on users.
$10B+
Tail Risk
0 Coverage
Insurance Available
ENQUIRY
Get In Touch
today.
Our experts will offer a free quote and a 30min call to discuss your project.
NDA Protected
Confidentiality24h Response
Time to ValueDirectly to Engineering Team
No Sales Fluff10+
Protocols Shipped
$20M+
TVL Overall