Aztec Connect logoAztec Connect

TVL: $6.15 M

-7.89% / 7 days

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Description

Aztec Connect is an open source layer 2 network that aims to bring scalability and privacy to Ethereum. It strives to enable affordable, private crypto payments via zero-knowledge proofs. Additionally it allows to deposit funds into a variety of DeFi Protocols such as LiDo, Element.Fi, etc.

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Risk summary

Technology

Validity proofs ensure state correctness

Each update to the system state must be accompanied by a ZK Proof that ensures that the new state was derived by correctly applying a series of valid user transactions to the previous state. Once the proof is processed on the Ethereum blockchain the L2 block is instantly finalized.

    1. RollupProcessor.sol#L395 - Etherscan source code

    Zero knowledge SNARK cryptography is used

    Despite their production use ZK-SNARKs are still new and experimental cryptography. Cryptography has made a lot of advancements in the recent years but all cryptographic solutions rely on time to prove their security. In addition ZK-SNARKs require a trusted setup to operate.

    • Funds can be stolen if the cryptography is broken or implemented incorrectly.
    1. StandardVerifier.sol#L37 - Etherscan source code

    All data required for proofs is published on chain

    All the data that is used to construct the system state is published on chain in the form of cheap calldata. This ensures that it will always be available when needed.

      1. RollupProcessor.sol#L359 - Etherscan source code

      Operator

      The system has a centralized operator

      Only specific addresses appointed by the owner are permitted to propose new blocks during regular rollup operation. Periodically a special window is open during which anyone can propose new blocks.

      • MEV can be extracted if the operator exploits their centralized position and frontruns user transactions.
      1. RollupProcessor.sol#L97 - Etherscan source code

      Users can force any transaction

      Because the block production is open to anyone if users experience censorship from the operator they can propose their own blocks which would include their transactions. Periodically the rollup opens a special window during which anyone can propose new blocks.

      • Users can be censored if the operator refuses to include their transactions and users lack resources to propose blocks themselves.
      1. RollupProcessor.sol#L347 - Etherscan source code

      Withdrawals

      Regular withdraw

      The user initiates the withdrawal by submitting a transaction on L2. When the block containing that transaction is proven on L1 the assets are automatically withdrawn to the user.

        1. RollupProcessor.sol#LL396 - Etherscan source code

        Other considerations

        Payments are private

        Balances and identities for all tokens on the Aztec rollup are encrypted. Each transaction is encoded as a zkSNARK, protecting user data.

          1. Fast Privacy, Now - Aztec Medium Blog

          Smart Contracts

          A diagram of the smart contract architecture
          A diagram of the smart contract architecture

          The system consists of the following smart contracts:

          • Main Rollup contract responsible for deposits, withdrawals and accepting transaction batches alongside zkProof. This contract stores the following tokens: ETH, DAI, wstETH.
          • AztecFeeDistributor 0x4cf3…4927
            Contract responsible for distributing fees and reimbursing gas to Rollup Providers.
          • DefiBridgeProxy 0xA1BB…1487
            Bridge Connector to various DeFi Bridges.
          • StandardVerifier 0x3937…f293
            Standard Plonk zkSNARK Verifier. It can be upgraded by the owner with no delay.
          • VerificationKey28x32 0x8C3B…8966
            Verification Keys for the Verifier.

          The current deployment carries some associated risks:

          • Funds can be stolen if a contract receives a malicious code upgrade. There is no delay on code upgrades (CRITICAL).