Privacy-Preserving Smart Contracts for Permissioned Blockchains: A zk-SNARK-Based Recipe Part-1

TL;DR

This paper proposes a zk-SNARK-based method to enhance privacy in smart contracts on permissioned blockchains, supporting tokens and delegated transactions for practical use cases.

Contribution

It introduces a novel privacy-preserving approach using zk-SNARKs that overcomes limitations of previous methods, enabling decentralized and efficient smart contract privacy solutions.

Findings

Supports both fungible and nonfungible tokens.

Introduces delegated transactions for complex use cases.

Provides a practical privacy solution with zk-SNARKs.

Abstract

The Bitcoin white paper introduced blockchain technology, enabling trustful transactions without intermediaries. Smart contracts emerged with Ethereum and blockchains expanded beyond cryptocurrency, applying to auctions, crowdfunding and electronic voting. However, blockchain's transparency raised privacy concerns and initial anonymity measures proved ineffective. Smart contract privacy solutions employed zero-knowledge proofs, homomorphic encryption and trusted execution environments. These approaches have practical drawbacks, such as limited functionality, high computation times and trust on third parties requirements, being not fully decentralized. This work proposes a solution utilizing zk-SNARKs to provide privacy in smart contracts and blockchains. The solution supports both fungible and nonfungible tokens. Additionally, the proposal includes a new type of transactions, called delegated transactions, which enable use cases like Delivery vs Payment (DvP).