🤖 AI Summary
This paper addresses the inherent tension between transaction transparency and user privacy in public blockchains by proposing a trustless on-chain privacy-preserving transaction scheme. Methodologically, it designs a privacy architecture integrating Twisted ElGamal elliptic-curve commitments with EC Diffie-Hellman key exchange, and employs zk-SNARKs to enable publicly verifiable encryption, decryption, and commitment procedures. The core contribution is the construction of cWETH—a composable, Ethereum-compatible privacy-preserving wrapped asset—that achieves end-to-end hiding of transaction amounts and participant identities on a fully transparent ledger, while preserving public verifiability of transaction validity. Experimental evaluation demonstrates that the scheme significantly enhances the practicality and security of on-chain private transactions without compromising decentralization or composability.
📝 Abstract
Transparency is one of the key benefits of public blockchains. However, the public visibility of transactions potentially compromises users' privacy. The fundamental challenge is to balance the intrinsic benefits of blockchain openness with the vital need for individual confidentiality. The proposal suggests creating a confidential version of wrapped Ethereum (cWETH) fully within the application layer. The solution combines the Elliptic Curve (EC) Twisted ElGamal-based commitment scheme to preserve confidentiality and the EC Diffie-Hellman (DH) protocol to introduce accessibility limited by the commitment scheme. To enforce the correct generation of commitments, encryption, and decryption, zk-SNARKs are utilized.