POA Network would like to introduce our latest initiative to the community: The POA Zero Knowledge(ZK) Fund! The ZK Fund is a grant program available to developers and projects implementing zero knowledge proofs into applications supporting the xDai Stable Chain.

Blockchains, Privacy, and Zero Knowledge

Blockchain transactions are publicly available for everyone to see. When transactions occur between parties on the blockchain, people can view the participant’s addresses who sent the transaction, the transaction amount, the transaction recipient, and the transaction ID. However, using what is known as zero knowledge proofs, transactions can be made private.

A zero-knowledge proof is a type of cryptography that allows one party (the prover) to prove to another party (the verifier) that it possesses some information without revealing any details about the information itself.

A zero-knowledge proof must have three properties:

Completeness : If the statement is true, the verifier will be convinced that the prover is honest.

: If the statement is true, the verifier will be convinced that the prover is honest. Soundness : If the statement is false, nothing can convince the verifier that the statement is true.

: If the statement is false, nothing can convince the verifier that the statement is true. Zero-knowledge: If the statement is true, the verifier can not learn any additional information from the statement.

POA Network’s Core developer Ayrat Badykov provides a great example on his zero knowledge blog post “Imagine your friend is colorblind (and you are not). He has a red ball and a green ball, one in each hand. Your task is to prove to him the 2 balls are different colors without giving him any additional information. He takes the balls behind his back and either switches them between hands or keeps them in the same hand. He brings them back out and you inform him whether or not he switched.

Because you can see the colors, you can tell him each time with certainty whether or not he switched. After a number of rounds, your friend will become convinced the balls are different colors because you accurately tell him whether or not he switched each time. Your statements are always true, and your friend gains no knowledge about which ball is red and which is green

This example satisfies all three zero-knowledge proof properties.”

When it comes to blockchain, and Ethereum specifically, there are various ZK protocols available to support zero knowledge transactions. Examples include Aztec, Semaphore and Hopper.

The ZK Fund’s aim is to incentivize participants to integrate zero knowledge protocols into applications and wallets that use xDai.

Why implement on xDai? Since xDai is a stable token, a primary use of the chain is peer-to-peer payments. Just as with cash, privacy should be an option when exchanging money or paying vendors for services. ZK protocols allow users to use xDai freely and anonymously.

We are excited to start the process and begin funding ZK Grants. Interested parties can leave their information and submit their application in the form below. The questions will help us understand what is required to complete the implementation and integration of the ZK protocol onto xDai.

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