Paper 2022/211

Azeroth: Auditable Zero-knowledge Transactions in Smart Contracts

Gweonho Jeong and Nuri Lee and Jihye Kim and Hyunok Oh

Abstract

With the rapid growth of the blockchain market, privacy and security issues for digital assets are becoming more and more important. In the most widely used public blockchains such as Bitcoin and Ethereum, all activities on user accounts are publicly disclosed and also violate privacy regulations such as EU GDPR. Encryption of accounts and transactions may protect privacy, but it also raises issues of validity and transparency: encrypted information alone cannot verify the validity of a transaction and makes it difficult to meet antimoney laundering, i.e. auditability. To solve the above problem, we propose an auditable zero-knowledge transfer framework called Azeroth. Azeroth connects a zero-knowledge proof for an encrypted transaction, enabling to check its validation while protecting its privacy. Azeroth also allows authorized auditors to audit transactions. Azeroth is designed as a smart contract for flexible deployment on top of an existing blockchain. According to the result of our experiment, the additional time required to generate a proof is about 901ms.The security of Azeroth is formally proven under the cryptographic assumptions.