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THORChain with ZKM Integration

Overview of the Category​

THORChain, enhanced by Zero-Knowledge Machine (ZKM) integration, primarily falls under the External Verification category of settlement networks. It utilizes its own blockchain (THORChain) in addition to the chains where assets are transferred, making it externally verified. However, it also incorporates aspects of Native Verification through its direct interaction with connected chains.

Category: Cross-Chain Decentralized Liquidity with Zero-Knowledge Proofs​

THORChain's primary focus is providing liquidity across multiple blockchains, now enhanced by ZKM's zero-knowledge proofs for improved security and efficiency.

Key Features of THORChain with ZKM Integration​

  1. Cross-Chain Liquidity: Users can swap native assets between blockchains without wrapping, now with added security from ZK proofs.
  2. Non-Custodial: The network remains non-custodial, with ZKM enhancing the security of cross-chain transactions.
  3. RUNE as Settlement Token: RUNE continues to act as an intermediary asset, with ZK proofs verifying its role in settlements.
  4. ZK-Enhanced Validator Nodes: Nodes now use ZK proofs to validate swaps and secure vaults more efficiently.
  5. Privacy-Preserving Liquidity Pools: ZKM integration allows for more private liquidity provision and swaps.

Architectural Diagrams​

THORChain Cross-Chain Liquidity Flow with ZKM​

THORChain Node and Validator Interaction with ZKM​

Architectural Advantages​

  1. Enhanced Security: ZKM integration provides cryptographic proofs for all operations, significantly reducing the risk of fraudulent activities.
  2. Improved Privacy: Zero-knowledge proofs allow for privacy-preserving transactions and liquidity provision.
  3. Efficient Cross-Chain Interoperability: ZK proofs optimize the verification process for cross-chain swaps, potentially reducing latency.
  4. Scalability: ZKM enables more efficient state transitions and proofs, allowing THORChain to handle increased transaction volumes.
  5. Reduced Validator Load: ZK proofs can simplify validation processes, potentially lowering the computational requirements for validators.

Architectural Disadvantages​

  1. Increased Complexity: Integrating ZKM adds another layer of complexity to an already complex system.
  2. Potential Performance Overhead: While ZK proofs enhance security, they may introduce some computational overhead.
  3. Integration Challenges: Seamlessly integrating ZKM with existing THORChain infrastructure could pose technical challenges.
  4. Higher Initial Setup Costs: Implementing ZKM may require significant initial investment in development and infrastructure.
  5. Learning Curve: Users and developers may need time to understand and trust the new ZK-enhanced processes.

Categorization in Settlement Network Types​

  1. External Verification

    • THORChain primarily fits here as it uses its own blockchain for settlement.
    • ZKM enhances the external verification process with zero-knowledge proofs.

    Related Projects: Entangle, Initia, Omni, Cycle Network, Hyperlane

  2. Native Verification

    • Aspects of THORChain's direct interaction with connected chains align with native verification.
    • ZKM integration allows for more efficient native verification on connected chains.

    Related Projects: Polymer, zkLink

Conclusion​

THORChain with ZKM integration represents an advanced cross-chain liquidity solution that leverages zero-knowledge proofs to enhance security, privacy, and efficiency. While primarily an externally verified system, it incorporates elements of native verification, positioning it as a hybrid solution in the settlement network landscape. The integration of ZKM addresses some of THORChain's previous limitations while introducing new complexities and opportunities for the protocol.

Resources​