Aztec, a layer-2 rollup focused primarily on privacy, has released their testnet. This is a huge accomplishment after more than eight years of development. With its technical team from Disney Research, the firm’s launch moves its state-of-the-art technology closer to a mainnet release.
Aztec is unique among the zero-knowledge rollup contenders in that privacy is at the core of its mission. Its purpose is to enable applications and users to protect their sensitive information with encryption on the protocol level.
"All of the secret information that you want to keep encrypted, it's posted on our blockchain in an encrypted form," - Zac Williamson, Co-founder of Aztec
Layer-2 networks, including Aztec, have started to become the solution to speeding up transactions and bringing down costs on the Ethereum blockchain. These networks provide users a much faster and cheaper experience than transacting directly on Ethereum.
With their presence solidified in the market, in 2022 Aztec raised a whopping $100 million in a Series B funding round led by a16z. This $10 million investment highlights the increasing appetite for privacy-preserving solutions in the blockchain ecosystem.
To live up to its promise of privacy, Aztec will have to compromise on some form of decentralization. This focus on privacy impacts scalability.
"A fully private transaction will have more data associated with it, because everything is encrypted. Which means that you've required more resources, therefore you cannot scale as much," - Zac Williamson
Aztec’s commitment to privacy above low transaction costs distinguishes it from other layer-2 solutions. This renewed focus allows it to differentiate and not just compete on price. Recently, Aztec Connect, a DeFi privacy bridge, was sunsetted after less than a year of operation.
