Suterusu：Functional Privacy Protection and Rule Transparency

DeFi is the main field of blockchain applications and one that has made the fastest progress up to now. Our focus on DeFi is pointed at what kind of “chemical reactions” will occur in the road to application-driven blockchains? And these “chemical reactions” involve not only participants in cyberspace, but comparisons of similar services in the real world. Users must compare and make a choice between DeFi and traditional finance.

Transparency is a natural attribute of Blockchain

Blockchain takes decentralization as a main feature, and realizes a decentralized business model based on the combined effect of the decentralized underlying architecture and consensus mechanism. Transparency is an inherent natural attribute of blockchain and has become the original power for the expansion of a blockchain network. Without a profound understanding of the blockchain consensus mechanism, no node can join the network as a recorder and maintainer of its distributed ledger. Without a profound understanding of decentralized business rules, nodes cannot join the network to provide services. With this feature, Bitcoin can achieve self-service account opening. This function not only creates the most basic infrastructure for blockchains to provide financial services, but provides a strong foundation for the stability of the Bitcoin network. Just think, accounts have traditionally been the basis for financial institutions to provide services and supervision institutions to implement supervision. Today, the Internet has been highly developed, yet the opening of full-function bank accounts in many countries still requires on-site authentication. However, in the blockchain network, the nature of technology changes this rule, because having a private key precisely means having an account. On the other hand, the globally deployed computing network provides a strong guarantee for the transparency of the blockchain. Taking Bitcoin as an example, there are about 10,000 nodes around the world, including nodes operated by miners, and nodes that the exchanges run. Every transaction initiated on the Bitcoin network will be broadcast throughout the network to let everyone know. Unless all nodes around the world exit the network at the same time, The transparency of the Bitcoin network will always exist.

Transparency becomes a practical obstacle to the application of blockchain.

Is this transparency good or bad? On one hand, it guarantees the security of transactions and can be queried repeatedly for a considerable period of time. On the other hand, it does bring great obstacles to the application of blockchain. The current situation is that everyone can query every transaction from Bitcoin’s 10,000 nodes, as well as the specific price of a transaction, and the address of who is participating. In this case, where should the user’s privacy begin and what is the significance of DeFi’s service? Such transparency also has a direct impact on financial service institutions. Imagine that customer information is the core confidentiality of the business, if the customer information is public, how will the organization’s competitiveness be reflected? In addition, if the price of financial products such as financial derivatives leak, it not only means that the strategy is invalid, but it may also have a negative effect on the market. Such transparency directly conflicts with the service standards that have been established in the financial industry.

Some people say that Bitcoin is anonymous because people can only find the address of any transaction, not the individual who made the transaction. It is true, but the existence of such on-chain data analysis companies like Chain analysis has caused a considerable portion of the on-chain addresses to be associated with the actual operators; even if DASH uses “mixed currency” technology to support anonymous transfers, due to the limited scope of mixed currency, there are still up to 60% of transactions that can be matched with people associated with address. Therefore, transparency has become a double-edged sword of the blockchain, which not only constitutes the core characteristics of its decentralized network, but becomes a practical obstacle to its application.

Transparent Rules + Anonymous Data promotes the application of blockchain.

In the field of blockchain, what kind of transparency do we need? How does De-Fi serve users based on the principle of transparency? In summary, maybe we can discuss a new idea. Blockchain should be based on rules transparency, and data related to the core logic of the business should be handled anonymously. Transparent Rules adapt to the characteristics of blockchain decentralization and also help to establish consensus among participating nodes; Anonymous Data takes into account the actual interests of users and service providers, as well as integration with existing widely accepted service guidelines. Only in this way is it possible for the blockchain to obtain broad application space.

Privacy protection technology: a bridge from blockchain to Anonymous Data

Obviously, Today’s blockchain is not such a blockchain, and right now, DeFi cannot provide such a service. Privacy protection technology is the bridge that enables the blockchain to achieve the above functions.

Privacy protection technology has always been an important branch of the evolution of blockchain technology. Monero uses an anonymous public-key encryption scheme, which guarantees that the designated receiver of the encryption scheme can find the ciphertext and decrypt it by scanning distributed ledgers; Mimblewimble removed the concept of “address” from the blockchain and kept only the confidential transaction scheme and interval proof. The advantage of this is that the entire ledger becomes smaller. Zcash uses zero-knowledge proofs derived from the Pinnochio algorithm to support general computing, but the biggest problem is the need for trusted initialization. Once some trapdoor knowledge involved in trusted initialization is obtained by attackers, it is possible to print Zcash indefinitely and cannot be detected.

Suterusu builds a multi-chain privacy protection platform based on the zk-conSNARK zero-knowledge proof scheme with no trusted preset and constant traffic. Suterusu will build a cross-chain protocol for digital assets to help mainstream digital assets achieve controlled and anonymous flows.

Main technical features of Suterusu:

• ZK-ConSNARK zero-knowledge proof of constant size without requiring trusted setup

Zcash first combined zero-knowledge proof with blockchain technology to realize the function of anonymous coin, but Zcash needs a trusted preset, and attackers may use this step to print Zcash indefinitely to launch an attack which becomes an important security risk. Zcash proposes a plan called Halo to improve on this flaw in September 2019. The Suterusu community had lost no time in analyzing the scheme and compared it with the Suterusu scheme. From this perspective, Suterusu based on the original ZK-ConSNARK, does not require trusted setup and is only a constant size, at least on the same starting line as Zcash.

• Privacy protection technology under the account model

K-ConSNARK provides anonymous payment channels for smart contracts by supporting Elgamal encryption technology and related zero-knowledge proof technology, enabling it to support privacy protection for blockchains like UTXO structures such as Bitcoin, as well as Ethereum and Polkadot and other account-based blockchains implement similar functions, combining “privacy protection” with blockchain applications.

• Support for heterogeneous blockchain for privacy protection

The bottom layer of ZK-ConSNARK supports Homomorphic one-way function to greatly improve the compatibility. The anonymous Hashed-timelock agreements built above will realize cross-chain anonymous transactions of assets. From a simple perspective, Suterusu can build a privacy + cross-chain ecosystem similar to Polkadot but with privacy protection.

Suterusu： Application scenarios of “functionalized privacy protection

• Digital asset transaction information protection is a direct application scenario of Suterusu

Although Bitcoin is getting further and further from a means of payment, its asset attributes are being recognized by traditional financial markets, and financial derivatives based on Bitcoin have gradually attracted market attention. Suterusu can support mainstream digital assets such as Bitcoin to protect transaction information; Suterusu based on the original ZK-ConSNARK does not require trusted preset and constant traffic. It will directly improve the security and verification efficiency of the above transactions.

• Anonymous payment is a long-term application scenario of Suterusu

Compared to Bitcoin, stablecoins and the forthcoming national digital currency electronic payment are undoubtedly more suitable to play the role of means of payment. The DC / EP scheme proposed by the People’s Bank of China has clearly proposed the concept of controllable anonymity. The support of Suterusu for the above means of payment is its long-term application scenario.

• Personal identity authentication is a derivative application scenario of Suterusu

Suterusu will also be the infrastructure for Decentralized Finance(DeFi) such as DEXs and lending. In addition, Suterusu can also play an identity authentication function in other fields other than finance, such as anonymous elections and anonymous auctions, to prevent users from managing multiple accounts and private keys while improving security.