The Ethereum research and development firm =nil; Foundation has raised $22 million to build out its Proof Marketplace, which will allow crypto protocols to outsource the production of zero-knowledge (ZK) proofs.
The funding round, led by Polychain Capital, values =nil; Foundation, which started in 2018 as a research collective but has transitioned into a more traditional startup, at $220 million, according to a statement from the firm. (And no, “=nil;” is not a typo, but a company name playfully – if confusingly – borrowed from programmer-speak for zero.)
“Proof Market, a trustless data accessibility protocol, enables layer 1 and 2 blockchains and protocols to generate zero-knowledge (ZK) proofs on demand for seamless data-sharing without reliance on centralized intermediaries,” =nil; explained in a statement obtained by CoinDesk.
ZK cryptography is increasingly common throughout the blockchain industry, with applications ranging from privacy and security to data compression. The tech allows one to “prove” a statement is true by generating a string of letters and characters, a “ZK proof,” for a so-called verifier. The verifier runs that proof through a kind of cryptographic checker – a computer algorithm that uses fancy mathematics to confirm the statement without needing any details beyond the gibberish proof itself.
The ZK marketplace, still in testing, is aimed towards democratizing the production of ZK proofs, making it easier for upstart ZK protocols to get going in a decentralized manner.
Zero-knowledge technology has become a core component for countless crypto protocols, powering everything from Ethereum scaling systems such as zkSync and Starknet to privacy chains like Zcash and Mina. But ZK protocol developers routinely face challenges stemming from the fact that generating proofs is a costly, technically complex and time-consuming endeavor.
Such barriers complicate the development of ZK platforms, whose trustworthiness is generally premised on the idea of allowing anyone – or at least a big pool of volunteers – to generate ZK proofs as a way of decentralizing trust. Today, many ZK platforms are producing the proofs themselves or are outsourcing the task to hand-picked partners, negating most of the tech’s purported benefits in the name of bootstrapping.
With the Proof Marketplace, protocols in need of ZK proofs will be able to pay trusted third parties to generate them. For instance, a ZK blockchain bridge can use the Proof Marketplace to pay a third party to generate a proof representing the bridge’s state (without the project needing to recruit and sustain a dedicated prover community itself).
=nil;’s Proof Marketplace is generally blockchain-agnostic, meaning projects across ecosystems will be able to buy and sell proofs. Zooming out, though, =nil; apparently built the tech as a prerequisite to eventually building out its own ZK-based blockchain ecosystem.
A representative for =nil; did not say whether or when the company would issue a token, but the representative did say that =nil;’s funding agreements specified details around a token distribution plan.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.