Aleo is a blockchain project focused on privacy protection, enhancing privacy and scalability through zero-knowledge proof (ZKP) technology. Aleo’s core idea is enabling identity verification and data processing without revealing personal data.
This article delves into Aleo’s project overview and recent developments, particularly addressing the significant puzzle algorithm updates that are of great interest in the market.
**Exclusive Look at the Latest Algorithm**
Aleo’s network generates a ZK circuit every hour; miners attempt different nonces within this hour as inputs to the circuit. They compute the witness (all variables in the circuit, also known as synthesis), derive a Merkle root of the witness, and determine if it meets mining difficulty requirements. Due to the circuit’s randomness, this mining algorithm poses challenges for GPU acceleration.
**Funding Background**
In 2021, Aleo completed a Series A funding round led by a16z, raising $28 million. In 2024, they secured $200 million in Series B funding from investors including Kora Management, SoftBank Vision Fund 2, Tiger Global, Sea Capital, Slow Ventures, and Samsung Next, valuing Aleo at $1.45 billion.
**Project Overview**
**Privacy**
Aleo centers on ZKPs, allowing transactions and smart contract executions with privacy preservation. Transaction details like sender and amount are concealed by default, enhancing user privacy while enabling selective disclosure as needed, ideal for DeFi applications. Key components include:
– Leo Compiler Language: Based on Rust, tailored for developing Zero-Knowledge Applications (ZKApps), reducing developers’ cryptography knowledge requirements.
– snarkVM and snarkOS: snarkVM enables off-chain computation with on-chain result verification, enhancing efficiency. snarkOS ensures secure data and computation, facilitating permissionless functionality.
**zkCloud**: Provides a secure, private off-chain computing environment supporting programming interactions among users, organizations, and DAOs.
Aleo offers an Integrated Development Environment (IDE) and Software Development Kit (SDK) for rapid application development. Developers can deploy applications in Aleo’s program registry independently, reducing platform risk.
**Scalability**
Aleo employs off-chain processing where transactions are initially computed for proof on user devices before submitting verified results to the blockchain. This approach significantly boosts transaction speed and system scalability, avoiding network congestion and high costs seen in Ethereum.
**Consensus Mechanism**
Aleo introduces AleoBFT, a hybrid consensus mechanism combining validator’s instant finality and prover’s computational capability. AleoBFT enhances decentralization, performance, and security:
– Block Finality: Ensures each block receives immediate confirmation post-generation, enhancing node stability and user experience.
– Decentralization Assurance: Separates block production from coinbase generation, preventing network monopolization by few entities.
– Incentive Mechanism: Validators and provers share block rewards, incentivizing provers to become validators through token staking, enhancing network decentralization and computational capacity.
Aleo supports gas-free application creation, making it suitable for applications requiring prolonged execution times like machine learning.
**Current Progress**
Aleo will launch its incentive testnet on July 1st, featuring:
– Approval of ARC-100: Compliance best practices for developers and operators on Aleo network, covering security measures like fund locking and delayed payment.
– Validator Incentive Program: Starts July 1st, aiming to validate new puzzle mechanisms, running until July 15th with 1 million Aleo points allocated as rewards.
**Initial Supply and Circulating Supply**: Initial token supply is 1.5 billion tokens, with approximately 10% in initial circulation, sourced mainly from Coinbase missions (75 million). Distribution will occur over six months, including rewards for staking, operating validators, and verification nodes.
**Testnet Beta Reset**: Final network reset with no further feature additions, aligning the network closer to the mainnet. Reset includes ARC-41 and new puzzle functionalities.
**Code Freeze**: Completed a week ago.
**Validator Expansion Plan**: Starting with 15 initial validator nodes, aiming for 50 by year-end and eventually 500. Stake requirements decrease over time, requiring 10,000 tokens for delegates and 10 million tokens for validators.
**Algorithm Update Analysis**
Aleo recently updated its puzzle algorithm, shifting focus from proof generation to witness generation. Each epoch’s solution logic remains consistent, but there are significant differences in logic between epochs. Notably, previous optimizations aimed at enhancing mining efficiency by optimizing MSM and NTT calculations for proof generation were abandoned in this update. The new process of witness generation introduces challenges due to its dependence on an epoch-following program, with instructions potentially requiring sequential execution.
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