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Aleph Zero emerges as a notable advancement in the rapidly evolving blockchain and cryptocurrency landscape. Built as a Layer 1 blockchain platform, it is founded on the pioneering AlephBFT consensus protocol, setting it apart in the domain. Utilizing a Directed Acyclic Graph (DAG) as a transient data structure, Aleph Zero enhances the time to finality, while maintaining the essence of blockchain, not diverging into being a mere DAG.

The integration into Substrate, an open framework crafted by Parity and the Polkadot developer community, cements Aleph Zero’s position as an independent Layer 1, not a mere parachain. Embarking on robust development, Aleph Zero plans the introduction of Liminal in 2024. This cutting-edge software-based privacy layer, built on zero-knowledge proofs and secure multi-party computation, showcases Aleph Zero’s commitment to ameliorating the base layers of Distributed Ledger Technology (DLT). Aleph Zero is able to provide a variety of use cases that are far-reaching across many different verticals, but here are just some of the examples of what they’re able to provide currently:

Aleph Zero's Liminal stands out for offering dual pathways for employing privacy features. Developers may either use these natively on the platform or integrate with the multichain privacy layer. For example, Aleph Zero allows the writing of smart contracts on Ethereum or Near while maintaining the contract's private state on its own platform. Liminal’s privacy features are native for those building directly on Aleph Zero, ensuring comprehensive privacy solutions based on both zero-knowledge proofs and sMPC in a hybrid fashion.

sMPC +Zero-Knowledge Technology

Zero-knowledge proofs allow a prover to verify their computations on private data without revealing the data, ensuring enhanced privacy. In contrast, sMPC keeps sensitive information off-chain on various nodes, allowing access only through a secure handshake, bolstering security. By handling for more complex calculations in a privacy-enhancing manner, only the user that requests the data and knows the input can receive the correct output. Aleph Zero’s Liminalin integrates these two, mitigating their individual limitations and offering a comprehensive privacy solution, enhancing the concept of a common private state crucial for applications like decentralized exchanges.

Compliance

·       Aleph Zero pursues operational clarity from the regulators in every aspect of its operations.

·       The Aleph Zero Foundation has been incorporated in Zug, Switzerland and has received a No-action letter from FINMA, the Swiss Financial Market Supervisory Authority.

·       Aleph Zero’s privacy-enhancing engine, Liminal, proactively seeks compliance with laws across multiple jurisdictions. This means that through integrations with idOS and Coinfirm, the network is monitored for any activity coming from fraud prevents bad actors from using it. Privacy is optional to use on the network and auditable, to answer any regulatory requirements.

Aleph Zero and MEV

In a strategic move, Aleph Zero employs Liminal framework and submarine sends to address the Maximal Extractable Value (MEV) problem. Transactions are encrypted and ordered immediately but are revealed to validators only after a set period, ensuring miners cannot manipulate transaction order for personal gain, enhancing the platform’s security and reliability.

Addressing the MEV problem is of paramount importance as it directly impacts the fairness and transparency of blockchain operations. Many existing blockchain platforms face significant challenges related to MEV, with miners or validators often exploiting their positions, leading to mistrust and operational inefficiency. Aleph Zero's innovative approach to tackling this issue sets it apart from the competition, highlighting its commitment to creating a fair, transparent, and secure environment for all users and transactions. This focus on resolving the MEV issue not only enhances its operational integrity but also bolsters its reputation and trustworthiness in the blockchain and crypto community.

A Dive into AlephBFT

Aleph Zero’s speed and scalability come from the unique design of AlephBFT, an original consensus protocol co-authored by the core team. The paper has been peer-reviewed and presented at the Advances in Financial Technologies (AFT) 2019 conference in Zurich.

PoS + DAG

Aleph Zero utilizes a modified version of the Proof of Stake (PoS) consensus methodology alongside DAG. This approach allows for faster transaction speeds, higher throughput, and substantially lower transaction fees, making the technology more accessible and feasible for mass adoption, and enhancing its appeal in the competitive blockchain market.

Transaction Ordering

Effective transaction ordering is a significant challenge in scaling blockchains. Aleph Zero employs DAGs to collect information on the order of transactions, helping prevent double-spending and other malicious practices. This auxiliary structure significantly impacts the chain's construction, ensuring a seamless and secure transaction process on the platform.

Decentralization Aspects

Aleph Zero’s development team confronts the decentralization challenge head-on, ensuring a standard of decentralization for DAGs. The platform adopts a mechanism that employs a rotating committee of random members, chosen from the available nodes to maintain the network's decentralization, reinforcing the platform's security and operational efficiency. As of the time of writing, the network operates with nearly 130 active validators while 50 are chosen for block production and 14 for block finalization.

The emphasis on ensuring robust decentralization is critical in establishing the reliability and independence of a blockchain platform. While many blockchain projects profess decentralization, the practical implementation often falls short, leading to potential vulnerabilities and centralized control, negating the fundamental principles of blockchain technology. Aleph Zero’s proactive and tangible measures to ensure genuine decentralization underscore its commitment to upholding the core values of blockchain technology. This approach distinguishes Aleph Zero from numerous other projects in the crypto space, reinforcing its position as a reliable, independent, and secure platform for diverse blockchain applications.

Byzantine Fault Tolerance and its benefits

Aleph Zero’s employment of the Byzantine Fault Tolerance (BFT) architecture is a significant pillar in ensuring robust, transparent, and secure network operations. This model assumes that even if some nodes within the network are acting maliciously(up to a third), the integrity and functionality of the network remain un-compromised. It's this resilience that positions BFT as a crucial technology in enhancing Aleph Zero’s security framework, ensuring a solid foundation for all its operations. The introduction of rotating committees enhances this architecture, providing additional layers of security and ensuring the effectiveness of the BFT model even in expansive and diverse network environments.

The significance of BFT lies in its ability to maintain operational integrity in diverse and hostile environments, crucial for any blockchain platform aiming to facilitate secure, transparent, and efficient transactions. Aleph Zero’s implementation of BFT is asynchronous, meaning that even after times of total asynchrony, the transactions will be ordered correctly which adds to the overall security of the platform.

In the crypto space, where numerous projects grapple with security and trust issues, Aleph Zero’s robust employment of BFT stands as a beacon of reliability and assurance. Unlike many other blockchain projects that may struggle with maintaining network security amid malicious attacks, Aleph Zero’s BFT architecture ensures resilient defense and continuous operation, underscoring its commitment to providing a secure and trustworthy platform for all users.

Aleph Zero Tokenomics

The Aleph Zero project's tokenomics, concerning its native AZERO coin, reflects a structure committed to long-term stability, development, and community involvement. The total supply of AZERO, available for viewing on Subscan under 'total issuance,' reveals a yearly inflation of 30,000,000 AZERO. While the coin is inflationary, with a continual release planned for staking rewards, Aleph Zero has not ruled out the potential for a future burning mechanism as the ecosystem evolves, offering a possible balance to the infinite supply model. This approach to inflation and potential deflation mechanics demonstrates a careful consideration of economic balance and sustainability for the project’s long-term viability.

In terms of allocation, the Aleph Zero Foundation holds 23% of the tokens, a substantial portion of which is dedicated to furthering research, development, marketing, and operations. This allocation supports not just the functionality and advancement of the Aleph Zero project, but also its ecosystem, indicating a focus on community and ecosystem growth. Another 10% of the tokens are allocated to the team, with 80% of these coins locked for one year since the Mainnet launch and vested over four years, a move ensuring the team's continued commitment to the project’s success. The structured and thoughtful allocation of tokens highlights the Aleph Zero project’s priorities in sustained development, team involvement, and ecosystem growth.

Concerning its various funding rounds, Aleph Zero has exhibited a strategic and structured approach, demonstrating their commitment to equitable distribution and long-term growth. The pre-seed funding round in 2018 issued AZERO coins at $0.04, with a significant portion vested for 15 months, ensuring continued investment in the project’s development. Further rounds, including a special Early Community round and public pre-sale, continued this trend of vested tokens, reinforcing long-term involvement and investment in the Aleph Zero ecosystem.

The public sale in 2021, priced at $0.10 per coin, marked a significant increase from the pre-seed price, reflecting the growing value and confidence in the Aleph Zero project. All of these elements together encapsulate a comprehensive and strategically designed token economy, underscoring Aleph Zero's commitment to sustainable and balanced growth, investor involvement, and ongoing project and ecosystem development.

Aleph Zero is embarking on a stepwise journey to full decentralization, where the AZERO token plays a crucial role in network governance and validator incentives.

In the early stages, even as the Aleph Zero Foundation nodes upheld network integrity without rewards or community validator involvement, the introduction of the staking nomination mechanism marked a significant turn. Here, users can delegate their AZERO tokens to both the foundation and community nodes. This delegation not only grants them a proportional share in the newly introduced inflationary rewards, bolstering network participation and investment while also setting the ground for more democratic involvement in network governance.

The network is permissionless and anyone can set up a validator node. The requirements for node operators are more than 25,000 AZERO as their own stake and the process of meeting the moderate hardware requirements given by the foundation.

With 90% of the inflationary tokens distributed to the nominators, the AZERO token becomes acritical tool for individuals to garner rewards and influence within the network. This influence is set to expand as Aleph Zero continues to decentralize, laying the groundwork for a more democratic and community-driven ecosystem.

In subsequent phases of decentralization, the AZERO token will further solidify its position as a central tool for network governance. This democratization culminates in the final step where every node, including those of the foundation, is subject to the same election processes. At this juncture, the AZERO token is not merely a means of earning rewards but becomes instrumental for network users to shape the blockchain’s future. The community’s ability to nominate nodes and participate in the election processes, utilizing the AZERO tokens, is a testament to Aleph Zero's commitment to decentralization and democratic governance, with the token holders steering the network's future directions and decisions.

Project roadmap and progress to-date

Aleph has been able to deliver and complete three of the seven phases in its ambitious project roadmap.

Among the key developments already delivered, there are:

·       Peer-reviewed AlephBFT consensus protocol

·       AlephBFT implementation in Rust

·       Mainnet launched

·       Smart contracts launched on Mainnet

·       Community validators on Mainnet

·       Ecosystem Funding Program launched

·       Block producing committee increased to 50, giving away foundation’s supermajority

The team is currently focusing on delivering:

·       Liminal 1.0 with ZK-based privacy

·       Bridge integrations

·       Increasing block finalization committee to 50

·       Liminal2.0 with MPC-based privacy

·       On-chain governance

All of this is to say that Aleph Zero appears to be forward thinking, focused on incremental progress and moving ahead to competitively position itself in a world where privacy has become increasingly necessary for the individual.

Exploring the Aleph Zero ecosystem

The Aleph Zero Ecosystem Funding Program is strategically designed to empower innovations that aim to broaden the capabilities, functionalities, and global adoption of the Aleph Zero blockchain. This comprehensive program encourages a wide array of project ideas, extending support to early-stage companies, established developer teams, and even proofs-of-concept.

The Aleph Zero Foundation's commitment is unmistakable, offering a diversified range of resources, including equity-free grants, access to venture capital and angel investors, legal and operational workshops, and more. These resources are organized into three project stages: Early Stage, R&D Stage, and Launch Stage. Each stage provides tailored support, such as security design support, infrastructure resources, code audits, and marketing support at the launch stage, ensuring that every project, irrespective of its phase, receives ample backing to navigate its unique challenges.

The financial backbone of this program is substantial, with a robust pool of $50 million ear marked for grants and investments. These funds are allocated in a tiered system, with projects eligible for grants ranging from $10K for simpler initiatives to $500K for those contributing significant value and visibility to the Aleph Zero ecosystem. The tier selection process is collaborative and transparent, ensuring that each project is matched with an appropriate funding level based on its scope, impact potential, and needs. This tiered approach, combined with a careful verification and approval process, ensures both the judicious allocation of funds and the support of a diverse range of projects contributing to the Aleph Zero ecosystem.

By providing financial, technical, and operational support, Aleph Zero is not just funding projects but actively investing in the continuous growth and advancement of its blockchain network. Projects benefiting from this program will not only contribute to enhancing the Aleph Zero network but also play a pivotal role in its global adoption. The emphasis on open-source contributions and the sharing of learnings further solidify Aleph Zero's commitment to community-centric development, ensuring that the entire ecosystem thrives as a collective, with shared knowledge and collaborative progress at its core.

Now that we’ve covered what Aleph Zero is, we can take a closer look at some of the projects that have pushed Aleph Zero closer to achieving its goals.

Let’s dive in.

21X

The work of 21X on Aleph Zero represents a significant advancement in the domain of digitalized trading. 21X, a forefront platform for trading tokenized securities, aligns with the innovative Aleph Zero ecosystem to enhance the trading landscape under the regulated EU DLT framework. As the first European DLT-based exchange for tokenized assets like stocks, bonds, and funds, 21X stands to benefit substantially from the robust architecture of Aleph Zero. Aleph Zero’s scalable and fast distributed ledger technology, characterized by its high throughput and low latency, can immensely bolster the performance of a trading platform like 21X. The Aleph Zero platform's potential for handling a high volume of transactions securely and efficiently can provide 21X with the technical backbone it needs to ensure seamless, reliable, and rapid trades, crucial for enhancing user experience and confidence.

Aleph Zero’s architecture, built on the principles of decentralization, can provide 21X with enhanced security and transparency, vital for trading platforms dealing with diverse tokenized assets. The integration of smart contracts can automate and expedite trading processes on 21X, offering 24/7 trading capabilities and eliminating the need for intermediaries, which traditionally slow down the trading process and add additional costs. The collaboration is poised to unlock profound liquidity and promote direct multilateral trade, empowering traders to engage in smooth and regulated trading activities. By operating under the EU's DLT Pilot Regime, 21X ensures compliance with stringent regulatory standards, further solidifying its position as a reliable and secure platform for trading various DLT financial instruments. Privacy is also an important aspect of the project, capitalizing on enabling private and institutional users to maintain their competitive edge and further ensure their security.

Interlock

Interlock is at the forefront of establishing a decentralized security platform on the Aleph Zero blockchain, aiming to enhance internet safety while providing users with top-notch, cost-free security solutions. The platform's inaugural project, Threat Slayer, a browser security extension, is in its Beta version. This project responds to the significant security threats in the decentralized finance world, especially as the cryptocurrency transaction volume soars, reaching $15.8 trillion, marking a 567% uptick from the previous year. This growth has unfortunately also attracted cybercriminals, leading to a loss of over $14 billion due to various scams. Interlock stands as a beacon of hope in navigating these challenges, offering robust security solutions and reward in gusers for contributing to a safer internet ecosystem.

Interlock is ushering in a new era of decentralized security, or DeSec, aiming to leverage the blockchain’s capacity for anonymous, secure crowd-sourcing of threat intelligence. Despite the significant investments in traditional security solutions, online threats and attacks persist, and Interlock is poised to tackle this using blockchain technology.

The platform plans to equip users with enterprise-grade security and incentivize the sharing of security data back to the Interlock Network, thus enhancing overall internet safety. The anonymized data collected will be sold as threat intelligence, a substantial market estimated at $10.1 billion per year. The project's roadmap is detailed and structured, with current efforts concentrated on developing and distributing consumer security products such as the Threat Slayer browser extension and the $ILOCK token, laying a solid foundation for the ambitious DeSec platform that Interlock aspires to build.

Moving forward, Interlock's second phase will focus on enterprise protection by launching a browser security platform comprising two core products: the Threat Intelligence Platform and the Browser Defense Platform. This approach is expected to bolster cybersecurity for enterprises, tapping into a significant market while ensuring token buybacks with the enterprise revenue. In the third phase, Interlock plans to expand its decentralized security ecosystem by attracting future DeSec projects and Web2 security companies, solidifying its position as a trailblazer in blockchain-enabled internet security solutions.

AZERO.ID

AZERO.ID has been launched as the first name and identity solution on the Aleph Zero mainnet. This novel platform aims to simplify and secure interactions within the ecosystem by replacing complex alphanumeric wallet addresses with easily manageable domains, significantly reducing the potential for errors and fraudulent activities. The system is designed to enhance user privacy, offering the first-ever domain service that allows private domain-to-domain asset transfers, powered by Liminal, Aleph Zero's soon-to-be-released privacy framework. Besides these features, users can attach various metadata records to their domains, issue subdomains, and enjoy full custody of their domains as NFTs.

The public launch of AZERO.ID is a significant milestone, marking a major advancement in the Aleph Zero and broader Substrate ecosystems. It underscores a concerted effort towards providing robust, user-friendly, and innovative domain system solutions. The platform's detailed features, including the registration of domains as NFTs, the integration with the ArtZero NFT marketplace, and a unique on-chain referral system, highlight AZERO.ID's commitment to enhancing the overall user experience. Furthermore, the emphasis on privacy preservation, multi-chain future exploration leveraging the XCM protocol, and continuous platform refinement showcase AZERO.ID's comprehensive and forward-thinking approach to on-chain domain and identity management.

Abax

Abax aims to enhance lending and borrowing services. Abax's innovative pool design, which underpins its lending protocol, provides a platform for users to earn passive income by depositing cryptocurrencies that are lent to borrowers against collateral or through flash loans. Abax’s innovative position risk model calculates the maximum debt for each user based on their collateral and debt  that built position.

This decentralization is a core aspect of the Abax Lending Protocol, reinforced by governance from the Abax DAO, which allows community members to guide decisions and upgrades. The integration with Aleph Zero’s architecture accentuates these features, granting Abax enhanced scalability, speed, and security. Aleph Zero’s high throughput and low latency are instrumental for a lending protocol like Abax, ensuring timely and efficient transactions that are pivotal for maintaining liquidity and smooth operations within lending pools.

Abax brings innovation to lending and borrowing protocols and is one of the first DeFi products built on Aleph Zero. The project has been already launched on the Testnet and is moving forward towards Mainnet deployment, preceded by launching the Abax DAO, auditing the contracts, and setting up the legal framework.

DRKVRS

DRKVRS, a role-playing MMO game powered by the Aleph Zero blockchain is coming soon as the team works hard at delivering a unique and enjoyable blockchain-enabled experience. The game is built by an award-winning and experienced team that has been involved in crafting the cinematics to The Witcher and CyberPunk 2077.DRKVRS’s CEO, Marcin Kobylecki, has produced an Oscar-nominated animation called The Cathedral while Jacek Dukaj, responsible for the lore and worldbuilding, is one of the most well-known Polish sci-fi writers, whose book called The Old Axeloth is currently being adapted for a Netflix series.

DRKVRS emphasizes community involvement in its development process, seeking feedback and suggestions from users to shape the game's lore, quests, and other elements. The roadmap includes an Ambassador Program where select members will assist inbuilding the community and influence the project development. Season 2, titled 'Faction Origins,' is highlighted as an immersive journey into the DRKVRS lore, where players can align with various factions that each have their unique stories, characteristics, and aesthetics.

Factions are described as more than just teams or groups; they represent different ideologies, styles, and ways of life that will heavily influence a player's game narrative and experience. Players are encouraged to actively engage in the lore exploration, with opportunities to win various rewards through participation in quizzes, tournaments, and other interactive events. The Season 2 of DRKVRS is designed as a structured journey that unfolds over three months, offering deep insights into the factions and allowing players to make more informed choices about their allegiance. Season 2 will come to be a steppingstone to the DRKVRS launch, ensuring an enriched experience and a deeper connection to the game's metaverse for the players. For more information, you can follow the link to DRKVRS’ Twitter here.

Common

Common is a private DeFi suite built on Aleph Zero by the core development company, Cardinal Cryptography.

It leverages Aleph Zero to offer on-chain trading that through speed, scalability, and easy-to-use UI brings CEX-like user experience on a DEX. It’s key value proposition revolves around a set of unique features with emphasis put on privacy and compliance.

Common allows users to use an order-book exchange with privacy-enhanced orders through Aleph Zero’s zero knowledge capabilities. Coinfirm and idOS integrations enable DeFi that’s privacy-enhanced, yet respectful of AML/CFT obligations. To ensure robust liquidity, the platform is a multichain DEX aggregator that does not rely on one source of liquidity. Common also comes with a set of features designed for institutional users.

The platform is scheduled to roll out gradually, starting in 2023.

You can read more about the project on common.fi.

Kinsu

Kintsu, inspired by the Japanese art of kintsugi, aims to address the fragmentation in the web3 ecosystem. Their primary offering, the liquid staking token sAZERO, allows users to stake their AZERO tokens, earn rewards, and simultaneously use those tokens in DeFi protocols. This approach enhances liquidity in the Aleph Zero ecosystem, transforming the traditionally static process of staking into a dynamic one that aligns with other DeFi activities.

The Kintsu protocol is designed to be easily integrated into different platforms, from DeFi to gaming, allowing for greater financial opportunities. As the platform grows, there's a clear commitment to decentralization, with plans to engage more with the community and transition to a governance-driven model. Kintsu also places importance on compliance with existing legal frameworks and is working towards ensuring transactional privacy in the web3 space. The company recognizes the importance of validators in the blockchain ecosystem and aims to foster an environment that attracts a diverse and growing set of validators. Overall, Kintsu's initiatives reflect a focused approach to improve liquidity, encourage community participation, and bolster the overall security and efficiency of the web3 ecosystem.‍

For more information, you can visit their website at this link.

Towards a more secure future

Aleph Zero, keenly aware of the challenges and opportunities within the blockchain domain, has strategically positioned itself to lead in this dynamic landscape. It has directly addressed the central issues of speed, scalability and security that often impede blockchain systems, while also ensuring that applications running on its network deliver a superior user experience.

Furthermore, Aleph Zero emphasizes the ever-growing demand for privacy-enhanced capabilities, a system crucial for maintaining a competitive edge and safeguarding user data. This comprehensive set of features is especially tailored for enterprise-level use cases that operate on a massive scale and require stringent privacy measures. Such meticulous design positions Aleph Zero for a potential surge of developers and innovators soon to make their mark in the space.

Aleph Zero's latest advancements in decentralization are emblematic of its commitment to fostering a community-centric blockchain ecosystem. With the expansion of its Mainnet block-producing committee from 14 to 50 nodes, the onus of block production has been increasingly transferred to the broader community, emphasizing a shared responsibility and vision. However, the Aleph Zero Foundation (AZF) judiciously retains a majority in the block finalization process, ensuring the network remains resilient and facilitates rapid advancements. As Aleph Zero moves ahead, it's poised to further embrace decentralization by redistributing the supermajority for block finalization and implementing on-chain governance. These strides of self improvement and constant iteration reaffirm Aleph Zero's vision of a community-driven, scalable, and highly secure blockchain platform, setting it to be an ecosystem worth continuing to keep an eye on.

Disclaimer: This report was commissioned by Aleph Zero. This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.

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