Zero-knowledge proofs will play a big role in the future of Web3, DeFi and metaverse: Survey

The Mina Foundation, the corporation responsible for servicing the Mina Protocol – the so-called “world’s lightest blockchain” – today released the results of its new survey entitled “State of Zero-Knowledge Report 2022” which ‘ shows a greater awareness and acceptance. of Zero-Knowledge Proofs (or ZKPs) among crypto traders and developers, and the importance that ZKPs will have in the future development of the metaverse, Web3 and cryptocurrencies.

What is Zero-Knowledge Evidence?

No-Knowledge Proofs – the mathematical methods used in cryptography to verify the truth of data without giving up the data itself – have gained popularity in the Web3 community in recent years for their ability to provide scalability and privacy in Web3 – to provide applications.

For scalability, ZKPs enable numerous data points to be contained in a single, “lightweight” proof, improving efficiency and scalability. And because blockchain technology is notorious for requiring large amounts of computing power—limiting its ability to scale—ZKPs can help developers create lightweight decentralized applications (dApps) that can run on more common hardware devices such as mobile phones, which enabling Web3 to be more accessible and scalable, according to the survey.

In terms of privacy, ZKPs can enable users in Web3 – be it in DeFi, DAOs and in the metaverse – to securely share information needed to access goods and services without disclosing personal data that can make a user susceptible to hacking, exploitation and identity theft.

Key survey takeaways

Of the 1,978 crypto merchants and developers surveyed in Mina Foundation’s “State of Zero-Knowledge Report 2022” survey earlier this year, 46% said the primary benefit of ZKPs in applications is scalability and privacy.

Some of the key findings in the survey:

90% said they see cryptocurrencies that incorporate ZKPs as more attractive than those that do not. 78% see ZKPs as important to the future of the metaverse and Web3. Over 40% see Finance as the industry most in need of ZKP solutions, followed by healthcare (12%), social media (5%), e-commerce (3%), games and entertainment (2%), and collectibles such as NFTs (2%).More than 48% of respondents expressed the largest. concerns about government access to data, more than third-party companies (44%), social media platforms (41%), banks (40%) and crypto wallets (36%).

The survey was created, distributed and analyzed by the Mina Foundation, which created questions designed to gauge the crypto industry’s sentiment toward zero-knowledge proofs. The survey was open for three weeks during the first quarter of this year, during which nearly 2,000 crypto traders, crypto community members and developers answered questions based on their understanding of zero-knowledge technology.

Some 76% of respondents said they had at least heard of ZKPs and understood what they were, and that 42% believed ZKPs would be “of the highest importance in the metaverse and Web3,” according to the survey. “What’s most interesting to me about the findings … is how the crypto community now strongly understands ZKPs, and that they can be used to protect their privacy,” Mina Foundation CEO Evan Shapiro said in said an exclusive interview with ZDNet.

Shapiro notes that this is a significant shift from years ago, where ZKPs were merely a theoretical object accessible only to cryptographers and PhDs. “Achieving this industry-wide understanding that ZKPs can be leveraged to bring privacy to Web3 is a major milestone for the technology and for the future of its application to crypto and beyond,” he added.

The Mina Foundation has been busy this year praising zero-knowledge technology in Web3 and the metaverse. In March, Mina received $92 million from tech financiers and billionaires to recruit new talent through grants to achieve its goal of making Web3 infrastructure more secure and democratic using ZKPs.

ZKP’s role in shaping DeFi

One area of ​​focus for ZKPs is the financial community. In the survey, nearly 41% said the industry best served by including ZKPs is Finance, far outstripping healthcare, social media, e-commerce, gaming and entertainment, and NFTs combined. With the amount of DeFi usage increasing, zero-knowledge applications with scalability and privacy benefits have a greater opportunity to help improve the industry’s wider adoption,” the report concluded.

Since its launch, DeFi has been viewed by many tech-savvy traders and investors as a solution to the inefficiencies of the “traditional” global financial system. Using public blockchains like Bitcoin and Ethereum for peer-to-peer transactions – DeFi cuts out the middleman regulator (and associated fees), providing better financing options. DeFi is becoming an alternative for many weary traders as the US economy enters bear market territory. “In my opinion, the bear market conditions will actually help bring the projects that enable a user-controlled Web3 to the fore,” Mina Foundation COO Kurt Hemecker told ZDNet.

Hemecker notes that privacy is a key component to making the decentralized web a reality, and without it, true user empowerment will not exist. “Finance is the industry that will benefit the most from ZKP solutions… given how vulnerable such sensitive financial information data can be to hacks and theft. ZKPs can help ensure that financial data is secured to make Web3 safer for everyone,” says he.

Despite the turbulent economy caused by record inflation, ongoing supply chain dilemmas, and now a bear market that threatens a recession, Mina is holding its ground, developing and refining its Mina protocol and its ZKP smart contracts known as zkApps. “The big priority for us is to get to market, to be able to launch the zkApps program so that we can deliver on our promise of programmability,” says Hemecker. “We want to build an environment where people can come build and play around and test out new ideas and we’ll see what comes of it.”