Horizen Sidechain Extended Whitepaper: Zendoo: A zk-SNARK verifiable cross-chain transfer protocol enabling decoupled and decentralized sidechains

This post was originally shared on the ZenCash Blog.

Horizen presents the world with another evolutionary proposal in its latest whitepaper: Zendoo, a universal construction for Bitcoin-like blockchain systems that allows the creation and communication with sidechains of different types without knowing their internal structure.

Projects based on Bitcoin’s source code inherit some of the Bitcoin protocol’s constraints. Most notably, the Bitcoin protocol has limited throughput, increased latency, and a reduced ability to scale and to introduce new functionalities. This is why Horizen’s vision is different, it consists of having a massively scalable general-purpose blockchain system with a novel Cross-Chain Transfer Protocol that enables an unbounded and fully decentralized sidechain ecosystem.

Horizen sidechains vs other sidechains
Horizen sidechains vs other sidechains

Sidechains are essentially a parallel chain with desired features that provide a way to transfer coins between the mainchain and the sidechain. Sidechains are an appealing innovation for enhancing existing blockchain systems. They enable blockchain scalability and extensibility by creating platform and application layers that are bound to the mainchain without imposing a significant burden. For example, the Horizen Sidechain solution allows developers to build their blockchain system that benefits from our mainchain’s infrastructure (e.g. the security of the largest node network ) without inheriting the mainchain’s limitations (e.g speed or consensus mechanism). 

We believe the value of sidechains as a scalability solution is still undiscovered, and we seek to develop this area. Our latest whitepaper introduces Zendoo, a universal construction for Bitcoin-like blockchain systems that enable the creation and communication with different sidechains without knowing their internal structure. Moreover, with Zendoo, the sidechain may not even be a blockchain but can be any system that uses the standardized method to communicate with the mainchain. The paper also provides a specific sidechain construction, Latus, that leverages zk-SNARK techniques to establish decentralized and verifiable cross-chain transfers. 

Zendoo allows the creation of fully decentralized blockchain applications with the possibility to introduce the specific logic and data to address any kind of need.

One of the main features of the construction presented in this paper is the usage of zk-SNARKs for enabling verifiable cross-chain communication. For instance, a sidechain using the recursive composition of zk-SNARKs, can construct a succinct proof of state transition virtually for any number of transactions. With the usage of SNARKs in sidechains, it will also be able to create auditable and data privacy-preserving applications to address real-world use cases.

Read our latest whitepaper to learn about Zendoo and how Horizen truly enables the blockchain scalability.


Q & A

What are the current issues with sidechains, and how does Horizen solve them?

There are several blockchain projects that also offer sidechains solutions, but none solve for all three major issues: Privacy, Trust, and Flexibility. Horizen’s sidechain solution is the only one that solves these major issues.

  • Privacy

Issue: Current versions of sidechains have limited privacy because the mainchain requires information about a sidechain’s transaction types. To date, there are no projects, other than Horizen, that allow a mainchain to verify a sidechain while maintaining the sidechain’s privacy. 

Horizen’s solution: Zendoo is a system developed by the Horizen team that allows the verification of sidechains by the mainchain, without knowing the internal structure of the sidechain. Sidechain nodes observe the mainchain but the mainchain only observes cryptographically authenticated certificates from sidechain maintainers.

  • Trust

Issue: Current implementations of sidechains require trusted third parties to communicate with the mainchain. The backward transfer of coins from sidechains to mainchains requires the use of a trusted third party such as “certifiers’, which assumes honesty in the network. Any network that relies on trusted third parties is not completely decentralized. 

Horizen’s solution: The Zendoo system doesn’t rely on third parties for backward transfers, removing the need for trusted parties and honesty. Our solution leverages ZK-Snarks to provide means for the mainchain to effectively validate withdrawals. Horizen sidechains are completely decentralized. 

  • Flexibility

Issue: Current sidechains have limited flexibility in function. The majority of sidechains are limited based on their mainchain. For example, sidechains require using certain interoperability standards, such as specific coding languages and consensus algorithms.

Horizen’s solution: Horizen Sidechains do not have limited flexibility – they are fully generalizable. Our sidechains are not limited by any rules or stipulations of the mainchain. This means the sidechains are coding language agnostic and consensus algorithm agnostic.

Who Benefits From Horizen Sidechains?

  • Developers and companies. They will be able to create applications that improve their businesses and improve lives. 
  • Horizen Node operators. They will have the opportunity to earn additional revenue by running sidechains.
  • ZEN holders and the entire ecosystem. They will benefit from the added utility of ZEN. Each sidechain will use ZEN as it’s fuel – so the more sidechains we have, the more demand there will be for ZEN. 

Will sidechains have their own cryptocurrency or will every sidechain use ZEN?

They’ll use ZEN as fuel, but a tokenization sidechain is perfectly possible. In fact, it’s on our list as it is essential for many of the use cases we see as having the biggest potential to solve real-world problems.

Learn more about Horizen Sidechain Solution, please read:

Learn more about Horizen Sidechain Solution

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