What is the most exciting cooperative arrangement that could be unlocked with zero-knowledge proofs? 500 words.

Answer 1:

Zero Knowledge Proofs Allow Layered Protocol Communication

Zero Knowledge proofs (ZKPs) allow a user to share verifiably true answers without revealing knowledge on how the answer was determined. For example, showing the answer to a provided Sudoko puzzle without any of the in-between steps taken to solve it. It’s also possible to prove that you answered a Sudoko puzzle without even revealing the completed answer. For those who are unfamiliar with how this is works, this 10 min video provides some intuitive examples.

For me the most exciting cooperative arrangement is that different organizations can verifiably show that agreed upon base protocols were not broken when manipulating shared information to a new state. This allows multiple parties to all collaborate on the same information state. Each group can carry out internal computations and communication however they like without worry of breaking the shared state for other groups as long as base protocols aren’t broken. This allows groups to keep private information and makes transactions more efficient because outside groups don’t need to verify every internal calculation, just the final output state and ZKP that no base protocols are broken with the manipulation.

A current example of this is Ethereum layer 2 scaling solutions such as Matter Labs. The layer 2 can batch many transactions together with a ZKP showing that no operations broke the base protocol. This saves on transactions costs which were becoming prohibitory expensive on the network. For Ethereum the main base protocols are that none of the transactions caused a wallet balance to go negative, created eth, or used a wallet that wasn’t in that layer 2 network. 

Answer 2:

ZKP and DAOs

In order to apply zero-knowledge proofs (ZKP) to intelligent cooperation, we must first seek out a structural framework that would both support social experimentation around cooperative arrangements, as well as provide a technological base for ZKP to work in this context. Luckily, this framework already exists in the form of DAOs, where experimental cooperative arrangements and ZKP can be allowed to intermingle in the same blockchain environment.

DAOs apply mechanisms for increasing social cohesion and organization around the commonly held ideas of its members. These mechanisms include:

• Democratic decision-making through conviction voting.
• Guiding the actions of its members by encoding rules and values in a community covenant.
• Arbitrating disputes when proposals are seen as going against the covenant.
• Mechanics for siloing efforts into semi-independent projects that are still held by the common DAO.

ZKP has the potential to add further layers of functionality to these mechanisms in several ways.

Even within the context of open, democratic decision-making enabled by DAOs, anonymity can still be the preferable option in several cases. To take a real-world example, election voting happens in secret, among other things to avoid issues of peer pressure. DAOs allow for experimenting with these options on a case-by-case basis, to find the optimal option in any given context.

Given that ZKP can be implemented to enhance user anonymity, here are just a few ideas for options and context that could be open to experimentation with ZKP in a DAO setting:

1. Providing proof-of-participation, without revealing the content of the participation. For example, a given user would be able to prove that s/he has a high degree of participation in voting on proposals, without revealing what s/he voted on those proposals. This could help further incentivize participation in the DAO, without the user fearing that specific decisions will be revealed.
2. Providing proof-of-feedback on quality of interactions within the DAO, and/or within siloed projects. The quality of interaction between nodes in a network is important for the social cohesion of the whole network as a whole, but users could be reticent to provide negative feedback on specific interactions if there is fear that this feedback could be revealed to others. ZKP allows for anonymous feedback, and thus for much needed sentiment analysis concerning the quality of interaction within a network over time.
3. Anonymous arbitration over disputes. Randomly appointed judges and the decisions they make can be verified through ZKP, without revealing identity.
4. Users proving that they participate according to ethical guidelines, as defined by the DAO’s covenant, without revealing the identity of the user. This is especially relevant when a user intentionally or unintentionally breaches ethical guidelines, which normally implies breaching a user’s anonymity in order for countermeasures to be applied.

Some of these issues are today tackled by BrightID and other third-party verifiers. ZKP is in a unique position to tackle these issues without third-party involvement, potentially enhancing anonymity in cooperative arrangements where this is preferrable, and thus leading to enhanced possibilities for Intelligent Cooperation.