tl;dr
Zero-knowledge (ZK)-based technology is proving to be highly investable and adoptable in the Web3 sphere, offering enhanced usability in applications that foster user privacy, improve blockchain scalability, and enable self-sovereignty of personal data. ZK technology enables private transactions, pr...
Zero-knowledge (ZK)-based technology is proving to be highly investable and adoptable in the Web3 sphere, offering enhanced usability in applications that foster user privacy, improve blockchain scalability, and enable self-sovereignty of personal data. ZK technology enables private transactions, protects citizens’ privacy in financial transactions, offers ZK-based ad targeting, addresses the inefficiencies of a blockchain network, and provides effective solutions in self-sovereign identity without individuals needing to publish their personal data. As ZK solutions become more embedded into the Web3 ecosystem, we are likely to see more use cases emerge, making them a promising area for investor interest and innovation.
Zero-knowledge (ZK)-based platforms and initiatives are currently proving to be among the most investable and adoptable in the Web3 sphere. Following a notable slump in Web3 VC investing during 2023, a slew of ZK-centric projects pulled over $45 million in funding over a single week in January. ZK technology is enticing to investors due to its ability to enhance the usability of Web3 applications that foster user privacy, improve blockchain scalability, and enable self-sovereignty of personal data.
The first practical application of ZK proofs was in Zcash, which used a variation called ZK-SNARKs to enable private transactions on its network. Research has now shown that ZK proofs could protect citizens’ privacy when using a central bank digital currency (CBDC) and could offer ZK-based ad targeting in Web3 advertising platforms such as AdEx. ZkEVM Layer 2 platforms, like Linea, are addressing the inefficiencies of a blockchain network and attracting dApp development user activity. Additionally, ZK proofs provide effective solutions in self-sovereign identity, such as the zPass protocol on the Aleo zero-knowledge privacy network.
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