Starkware Industries, the Israeli startup founded by Prof. Eli Ben-Sasson (Technion) and Prof. Alessandro Chiesa (UC Berkeley), has announced a $ 30 million Series A round. This follows a funding round of $ 6 million just six months ago.

The funding was led by Paradigm, a new venture capital fund started by Coinbase founder Fred Ehrsham and former Sequoia Capital partner Matt Huang, who is joining Starkware’s board of directors. Other investors include Intel Capital, Sequoia, Consensys, Coinbase Ventures, and Multicoin Capital.

Starkware has developed the next generation of zero-knowledge evidence (ZKP). ZKP enables privacy by allowing a third party to find a feature of the data without seeing the data. For example, a company can verify that a person is over 18 without knowing their age.

zk-SNARKS is the version of ZKP which is popular in the blockchain world and was also developed by Ben-Sasson, Chiesa, and others. zk-SNARKS is used in ZCash and is also available in Ethereum. One of the downsides of SNARKS is that it requires a trusted setup. If the people involved in the initial setup get along and don’t destroy the data used, then privacy is compromised. Another problem is that SNARKS are computationally expensive.

The Starkware team produced the next generation of ZKP called zk-STARKS, which is more efficient and does not require reliable configuration.

Scaling too

And Starkware takes advantage of zk-STARKS beyond pure privacy applications. Their website says they’re working on increased transaction throughput and off-chain computation, but doesn’t provide any details.

On (public) blockchains in general, when a transaction occurs, all nodes execute a smart contract to verify a response. It is well known that Bitcoin and Ethereum have very slow transaction rates. One scaling solution is a Layer 2 protocol like Lightning that allows transactions to happen off-chain.

Another alternative to all nodes verifying on-chain transactions is instead to have transaction verification happen off-chain and keep unconscious evidence of it on the main chain. (Credit: snark.network).

Today, the Enterprise Ethereum Alliance also unveiled API specifications for off-chain trusted computing.

In addition to Layer 2 scaling, it is also possible to optimize the scaling of data in the mainchain or on the chain. For now, blockchains store every transaction since they started. One suggestion is to convert the blocks to zero-knowledge evidence and save them instead.

Zcash’s Zooko Wilcox explained on a forum post:

“The possibilities include using new ZKP techniques such as zk-STARKS to compress a large number of transactions (eg 1 million transactions) into a single evidence (eg a 1MB chain), then compress so recursive a million of these proofs into a 1MB string, then have a global network consensus on it. This would result in a capacity of up to a trillion transactions per consensus period. But there are a whole host of questions as to whether that would be possible or if it would come with other unacceptable compromises. “

New economic model

When Starkware unveiled itself as a company, they also announced an unusual business model. Rather than a conventional license, they adopted Tech 4 tokens where startups pay them in tokens instead of fees.

In August last year, Technion University in Israel hosted a cryptocurrency event hosted by Ben-Sasson that brought together many crypto luminaries, including Ethereum co-founder Vitalik Buterin, Zooko Wilcox, Arthur Breitman of Tezos and many academics around the world. Ben-Sasson featured on ZKP and the impending release of zk-Starks. For the lecture, Vitalik sat directly in front of Ben-Sasson and dotted the professor with questions. It was great to see the enthusiastic intellect in action, and Buterin followed it up with a series of posts on ZKP.


About The Author

Related Posts