Aztec Protocol

Aztec Protocol is a zero-knowledge rollup (zk-rollup) built for the Ethereum blockchain, designed to provide scalable, low-cost private transactions. It leverages advanced cryptographic techniques, primarily zk-SNARKs, to encrypt transaction amounts and asset types on-chain while maintaining public verifiability. This allows users to transfer assets like ETH or ERC-20 tokens with full financial privacy, shielding balances and payment values from public view on the ledger. Unlike mixers or coinjoin services, Aztec provides programmable privacy at the protocol level.

The core innovation is its use of private notes, a cryptographic commitment scheme that represents a user's balance. A user's private state is stored off-chain in a note registry, while only a cryptographic proof of a valid state transition is posted to Ethereum. This architecture enables two primary functions: private transfers and private DeFi interactions. Users can confidentially deposit, transfer, and withdraw funds, and developers can build private smart contracts that operate on encrypted data, opening use cases for confidential voting, sealed-bid auctions, and private payroll.

A key component is the Aztec Connect bridge system, which allowed users to interact with mainstream Ethereum DeFi protocols like Lido, Uniswap, and Compound while preserving privacy. Users could supply liquidity or swap tokens through these integrated contracts, with all sensitive details remaining hidden within the Aztec rollup. This demonstrated a practical path for bringing privacy to existing financial applications without requiring protocols to modify their core smart contract code.

The protocol has evolved through significant upgrades. The original Aztec 1.0 (zk.money) offered basic private transfers. This was succeeded by Aztec Connect, which added private DeFi access. The network is now developing Aztec 3.0, a complete overhaul aiming to be a fully private, programmable zk-rollup with a native privacy-centric programming language, Noir. This next iteration seeks to make writing private smart contracts as accessible as writing public ones on Ethereum.

Aztec Protocol is a privacy-first layer-2 scaling solution for Ethereum that uses zero-knowledge proofs (ZKPs) to enable confidential transactions and private smart contract execution. It operates as a ZK-Rollup, batching many private transactions into a single proof that is verified on the Ethereum mainnet. This architecture provides strong cryptographic privacy—concealing asset types, amounts, and participant addresses—while inheriting Ethereum's security and leveraging its scalability benefits through data compression.

The core of Aztec's privacy model is the private state, a shielded pool of assets represented by ZK-notes. A ZK-note is a cryptographic commitment that encodes asset details (value, owner, asset type) without revealing them. Users interact with this private state via a private kernel circuit, a specialized zero-knowledge circuit that validates the logic of private transactions. To spend a private note, a user must generate a zero-knowledge proof demonstrating they own the note and are following the protocol rules, without disclosing the note's contents.

Aztec supports two primary transaction types: private payments and private smart contract calls. Private payments use the zk.money application for confidential transfers of ETH and tokens. For more complex logic, Aztec enables private decentralized applications (dApps) through its Aztec.nr programming language and Noir ZK domain-specific language (DSL). Developers can write private smart contracts where the contract's internal state and execution logic remain hidden, enabling use cases like confidential decentralized finance (DeFi), private voting, and blind auctions.

The protocol's rollup design involves a sequencer that collects private transactions, processes them through the proving system, and posts the resulting validity proof and minimal state data to Ethereum L1. This proof, verified by a smart contract on-chain, confirms the entire batch's correctness. Users can exit their funds from the private rollup state back to the public Ethereum mainnet at any time, a process that requires generating a final proof to claim ownership of the public funds.

The Aztec Protocol was a privacy-focused layer-2 scaling solution for Ethereum that utilized zero-knowledge proofs to enable confidential transactions and smart contract execution. Initially launched in 2018, its core innovation was zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge), which allowed users to prove the validity of a transaction without revealing its sender, recipient, or amount on the public ledger. This architecture positioned Aztec as a zkRollup, batching many private transactions into a single proof for efficient and secure settlement on Ethereum's base layer.

The protocol's evolution is marked by distinct network phases. The first mainnet iteration, Aztec 1.0 (2019), was a private payment rollup supporting simple confidential transfers of ETH and a single token. Its successor, Aztec Connect (2022), represented a major architectural leap, transforming into a privacy gateway for Ethereum DeFi. Instead of hosting applications directly, Connect allowed users to make private deposits into a rollup contract and then interact with popular protocols like Lido and Uniswap via bridges, with all DeFi interactions batched and anonymized.

In 2023, the team announced the sunset of Aztec Connect to focus resources on Aztec 3.0, an ambitious vision for a fully programmable private zkRollup. This planned evolution aimed to support confidential smart contracts (dubbed zkApps) using a new language, Noir, making advanced privacy-preserving applications feasible. Despite its technical pioneering, the Aztec network was officially shut down in March 2024. Its legacy lives on through its open-source contributions, including the Noir language and significant advancements in the practical application of zk-SNARKs for blockchain privacy.