Hey folks, so as Blackrock and other institutions are beginning to start putting more and more real world assets on-chain, one of the main potential barriers are concerns surrounding privacy. The nature of a public blockchain can act as a double-edged sword — people want secure and verifiable transactions yet at the same time publicity can put people at risk of having their data exploited by nefarious actors.
Aleph Zero, a relatively new Layer 1 blockchain, has been built in hopes to circumvent this problem, and has created an ecosystem that allows data to be obfuscated by zero-knowledge proofs and multi-party computations, as well as being AML (anti-money laundering) and CFT (Countering the Finance of Terrorism) compliant at the same time.
Aleph Zero operates via proof of stake through Substrate, which essentially is an SDK associated with the Polkadot network. If you’re unfamiliar with SDK (Software Development Kit), it’s essentially a framework toolkit that allows for interoperability, primarily with other chains in the Polkadot ecosystem.
Decentralized, fast and cheap: According to Subscan, there’s currently a total of 160 different validators that are helping secure the network, and through its “ AlephBFT” consensus mechanism, which utilizes a DAG (Directed Acyclic Graph) framework in order to provide sub-second transaction speeds (100k transactions per second) as well as very low transaction fees through its ZK-tech.
Privacy: Perhaps the most interesting feature of Aleph Zero is its privacy features — namely through zero knowledge proofs (ZKPs) as well as multi-party computation (MPC). ZKPs have been used by other chains as primarily a scaling solution through ZK rollups, but they also provide users anonymity as transactions can be verified without revealing specifics of what the transaction entails. Similarly, MPC (just as in the name) allows for multiple parties to jointly complete computational tasks without actually sharing the parties’ different data.
AML/CFT Compliant: As I mentioned before, even though Aleph Zero allows users to keep its data private, at the same time it also manages to be AML and CFT compliant. The way that Aleph is able to skirt around this is by instituting privacy opt-in features tied into what they call “ZK-IDs.” In order to obtain a ZK-ID, one must undergo a proper KYC which allows normal transactions to be private via ZK-technology, yet at the same time is auditable by regulatory authorities.
According to Aleph Zero’s website, there are currently there is currently a total of 128 different projects that are currently being built on Aleph Zero:
Perhaps the most notable applications (mostly all in testent) include:
Common.fi — which will most likely be the main DEX, advertises multichain trading, MEV protection, and also AML/CFT compliant
Kintsu.xyz — a liquid staking solution where users can receive $sAZERO in turn for their staked $AZERo.
Abax.finance — a lending borrowing protocol that will allow users to borrow against their $AZERO and other tokens include $ETH, $BTC, and $USDC.
Added Bonuses: Given that many of their DApps are still in testnet, it’s been confirmed that $AZERO stakers will be eligible for many of the a1rdrops from the DApps that still have yet to release their own token.
According to the docs, the initial supply of $AZERO was 160 million, 23% which was allocated to the Aleph Zero Foundation, and 10% to the team. The token is inflationary at a rate of 8.4%, with approximately 2.5 million tokens being added per month, or 30 million per year — 90% of which goes towards staking rewards.
Currently there is a total supply of 357.067 million $AZERO which at a price of $1.077 per token, gives it a fully diluted value of roughly $384.56 million dollars. $AZERO has undergone seed, pre-seed, pre-sale and public sales, all which have now been fully vested, with the only remaining linear unlocks going to the Foundation and the team:
The lion’s share of $AZERO is currently staked across its validators, with currently more than 240 million tokens staked, which at an inflation rate of 8.4%, gives stakers an earning rate of a little over 11% APR:
Seeing how many of its applications are still in testnet, it’s clear that we’re still extremely early in Aleph Zero’s life cycle, and it will be interesting to see exactly how much adoption it will be able to garner, especially when many of these DApps start to go live. Perhaps the most bullish partnership that’s been announced so far is with Deutsche Telekom, which is the number one data/telephone service provider in Germany.
Yet with no burning mechanisms currently in place, it is a bit worrisome that there’s no supply cap and it’s current inflation rate seems relatively high. That being said, since the rate of newly minted tokens is fixed, in relation to the total token supply this 8.4% inflation rate should mathematically go down over time.
What’s clear is that Aleph Zero is strongly focused on doing privacy the right way, as well promoting interoperability across chains which I imagine should bode well for its future. Interested in learning more about Aleph Zero and possibly earn some $AZERO along the way? Currently on Coingecko they’ve sponsored a Learn & Earn campaign which will award 1000 lucky participants the chance to earn some free tokens.
And as always, thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!
Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Cheers everyone!
