L1 blockchains, like Bitcoin and Ethereum, form the backbone of the entire blockchain ecosystem, handling everything from consensus to transactions. The challenge lies in balancing decentralization, security, and scalability, known as the “blockchain trilemma.”
Bitcoin prioritizes security and decentralization but faces scalability issues, processing fewer than 10 transactions per second. Ethereum sacrifices some decentralization for scalability with its Proof-of-Stake transition.
Aleph Zero addresses these challenges using its Directed Acyclic Graph and BFT consensus protocol. This guide delves into Aleph Zero’s unique features and growing ecosystem.
Aleph Zero operates as a first-layer blockchain using the AlephBFT consensus algorithm, a peer-reviewed protocol resilient to asynchronous Byzantine faults. The platform ensures secure communication through Byzantine Fault Tolerance (BFT), where malicious nodes are ineffective if they constitute less than one-third of the network.
To overcome BFT challenges in a decentralized setting, Aleph Zero employs rotating committees, making it harder for malicious nodes to conspire. Asynchronous operations enhance security, enabling independent node actions without waiting for responses.
AlephBFT combines Proof of Stake (PoS) and Directed Acyclic Graphs (DAGs) for consensus. This blend positions Aleph Zero as a highly secure and scalable blockchain, offering accelerated transaction processing and reduced costs. The platform’s innovative approach, incorporating BFT and rotating committees, ensures data integrity and system functionality in a decentralized landscape.
Aleph Zero guarantees privacy through its dedicated privacy layer called Liminal. Liminal employs a combination of advanced techniques, namely zero-knowledge proofs (ZK-SNARKs) and Secure Multiparty Computation (sMPC), to safeguard user transaction details. ZK-SNARKs preserve transaction privacy while allowing for network validation, and sMPC divides data into fragments to ensure that no single node can access the entire dataset.
Liminal offers a unique programmable privacy approach, preserving the private state of smart contracts from other chains on Aleph Zero. Developers can opt to build on Aleph Zero or use Liminal as a privacy Layer 2 with low fees and fast transaction times, making it suitable for applications in banking or healthcare.
Aleph Zero aims to establish compatibility with various blockchain networks. Although not functioning as a parachain, Aleph Zero strategically holds a parachain slot. The primary objective is to build a cross-chain bridge to Polkadot, facilitating seamless communication and data transfer between Aleph Zero and other prominent networks such as Polkadot, Cosmos, and Ethereum. This integration enhances the platform’s reach and utility.
In contrast to the conventional approach of slashing, where misbehaving validators in traditional Proof of Stake (PoS) systems face partial loss of their staked cryptocurrency, Aleph Zero presents an on-chain governance method with a “freezing” process. This involves temporarily halting the staked assets of suspicious validators. A comprehensive investigation follows to determine whether the anomaly resulted from an internal glitch or genuine malicious behavior. The response and actions taken are customized to the particulars of each situation. Aleph Zero believes this method provides a fairer solution compared to the traditional slashing approach.
The Aleph Zero mainnet became operational in 2021, initially drawing various projects. However, the introduction of smart contract publishing in March 2023 allowed protocols to develop their products, resulting in a surge of projects joining the ecosystem. Being a versatile network, Aleph Zero hosts a range of projects, including DeFi ventures like Yield aggregators, decentralized exchanges, and lending/borrowing platforms. The continual influx of projects into the Aleph Zero ecosystem creates a network effect, attracting more users and capital.
The fast expansion of the Aleph Zero ecosystem is attributed, in part, to the earlier introduction of the Ecosystem Funding Program (EFP). This initiative seeks to foster a varied ecosystem of decentralized applications (dApps) and projects by offering grants of up to $500,000, along with knowledge-sharing opportunities and supplementary resources. The EFP actively involves developers and builders within the Aleph Zero community. This can be considered a great way to incentivize developers and creators, a topic we discussed in one of our earlier.
Furthermore, Aleph Zero forms strategic collaborations with major players in the market. In June, Aleph Zero established a partnership with Ledger, a cold storage solution, to provide accessibility to the $AZERO token within Ledger's secure environment for storage and transfers. Moreover, Aleph Zero announced the development of a solution allowing users to directly stake their tokens, along with the incorporation of nomination pool features. These enhanced features are designed to expand Aleph Zero's reach to a broader audience while simultaneously bolstering security for its community.
Also last month, Aleph Zero reaches a significant milestone with Deutsche Telekom joining as the first enterprise validator. This signifies a notable moment as a major company enters a privacy-enhanced blockchain network, indicating increased interest within the enterprise world.
Deutsche Telekom's active participation as a validator on both Aleph Zero's Mainnet and Testnet underscores its commitment to the network's security, governance, and decentralization. This collaboration positions Aleph Zero among respected web3 infrastructure peers, reflecting a shift in how large enterprises engage with privacy-focused networks.
