A Primer on ZK-SNARKs for DeFi Developers
Understand zero-knowledge succinct non-interactive arguments of knowledge and how they enable private computation on public blockchains.
Xythum Research
@xythumA Primer on ZK-SNARKs for DeFi Developers
Zero-knowledge proofs are the cryptographic foundation enabling private computation on public blockchains. This primer covers the essentials every DeFi developer should understand.
What Are Zero-Knowledge Proofs?
A zero-knowledge proof allows one party (the prover) to convince another party (the verifier) that a statement is true—without revealing any information beyond the truth of the statement itself.
The Classic Example
Imagine proving you know a secret password without ever revealing what it is. That's zero-knowledge.
The Three Properties
Every zero-knowledge proof must satisfy:
- Completeness — If the statement is true, an honest prover can convince the verifier
- Soundness — If the statement is false, no cheating prover can convince the verifier (except with negligible probability)
- Zero-Knowledge — The verifier learns nothing beyond the statement's validity
Understanding SNARKs
SNARK stands for Succinct Non-interactive ARgument of Knowledge:
| Property | Meaning |
|---|---|
| Succinct | Proofs are small and fast to verify |
| Non-interactive | No back-and-forth; prover sends one message |
| Argument | Computationally sound (secure against polynomial-time adversaries) |
| of Knowledge | Prover must actually "know" the witness |
The Anatomy of a SNARK
A SNARK system consists of three algorithms:
interface SNARKSystem {
// One-time setup (trusted or universal)
setup(circuit: Circuit): { provingKey: ProvingKey; verifyingKey: VerifyingKey }
// Generate a proof
prove(pk: ProvingKey, publicInputs: Field[], witness: Field[]): Proof
// Verify the proof
verify(vk: VerifyingKey, publicInputs: Field[], proof: Proof): boolean
}Traditional SNARKs require a "trusted setup" ceremony. If the setup is compromised, fake proofs become possible. Newer systems like PLONK use universal setups.
ZK-SNARKs in DeFi
Privacy Applications
- Private Transactions — Hide sender, receiver, and amount
- Dark Pools — Conceal order details until execution
- Identity — Prove attributes without revealing identity
- Compliance — Selective disclosure for regulators
How Xythum Uses SNARKs
contract DepositVerifier {
function verifyDeposit(
bytes32 commitment,
bytes calldata proof
) external view returns (bool) {
// Verify the SNARK proof
// This confirms the deposit is valid without
// revealing the depositor or amount
return Groth16.verify(verifyingKey, commitment, proof);
}
}Performance Considerations
SNARK proof generation is computationally expensive. Client-side proving for complex circuits can take 10-60 seconds. Server-side proving with specialized hardware is much faster.
Choosing a SNARK System
| System | Setup | Proof Size | Verify Time | Best For |
|---|---|---|---|---|
| Groth16 | Per-circuit | ~200 bytes | ~1ms | Production, gas-efficient |
| PLONK | Universal | ~500 bytes | ~3ms | Flexibility, upgrades |
| STARK | None | ~50KB | ~10ms | Quantum resistance |
Getting Started
For DeFi developers looking to integrate ZK-SNARKs:
- Learn Circom — The DSL for writing arithmetic circuits
- Study snarkjs — JavaScript library for proof generation
- Explore Noir — Aztec's higher-level ZK language
- Read the Literature — Start with the Groth16 and PLONK papers
In the next article, we'll dive into threshold encryption and how it enables decentralized compliance.