Privacy-Preserving Payment Layer using Zero-Knowledge Proofs & Rust

Results & Impact

Metric	Impact
▫️On-chain Footprint	Reduced calldata size by ~70% via off-chain proof generation
▫️Anonymity Set Growth	Grew to 12,000+ shielded notes in first 4 months
▫️Withdrawal Latency	<15s (including proof gen and submission)
▫️Regulatory Controls	Designed optional compliance hooks for blacklisting UTXOs/nullifiers
▫️Gas Cost for Withdrawals	Averaged 190k gas per Groth16 verified tx

Privacy-Preserving Payment Layer using Zero-Knowledge Proofs & Rust

Project Snapshot

- - ▫️Client: Confidential (DeFi Infrastructure Provider targeting APAC + EU region)
  - ▫️Industry: Decentralized Finance (DeFi), Privacy Infrastructure
  - ▫️Duration: 10 Months
  - ▫️Team: 8 Rust + ZK Engineers, 2 Cryptographers, 1 Ethereum Architect
  ▫️Environment: Ethereum Layer 1 & Testnets (Goerli, Sepolia), Rust-native zkStack

Objectives

▫️To build a modular, privacy-preserving payment layer that operates on top of Ethereum or other L1 chains—allowing users to send, receive, and mix funds without leaking metadata or transaction history.
▫️Inspired by Tornado Cash, Zether, and Aztec, the goal was to implement a regulatory-aware, off-chain privacy layer using Zero-Knowledge Proofs, without compromising composability or performance.

Solution

- - - TechSteck Solutions architected a Rust-powered zk-based mixer and shielded payment system capable of supporting arbitrary ERC-20 and ETH deposits, with off-chain proof generation and a zk-SNARK-based L1 bridge for trustless withdrawals.
      Core Technologies Used
    - - ▫️Rust – Backend microservices, prover services, SNARK coordination layer
      - ▫️arkworks-rs – Circuit design and cryptographic primitives
      - ▫️bulletproofs – For confidential range proofs and commitment schemes
      - ▫️circom-rs – Native Circom circuit compiler with WASM backends
      - ▫️Poseidon Hash / MiMC – ZK-friendly hashing for note commitment & Merkle proofs
      - ▫️Solidity – Smart contracts for deposit, withdrawal, and Merkle tree root management
      - Key Features & Architecture
      - 1. Shielded Transactions
      - Users generate shielded notes off-chain using a Rust client, each representing a fixed denomination.
        
        Each note includes:
        ▫️Commitment: Poseidon(Msg + blinding)
        ▫️Nullifier: Prevents double-spending
        ▫️Serial Number: Revealed only on withdrawal for verification
      - 2. Off-chain ZK Proof Generation
      - ▫️ZK circuits compiled via circom-rs and proven via snarkjs/groth16 or Bulletproofs.
        ▫️Rust orchestrator handles:
        ▫️Input signal generation
        ▫️Merkle proof path computation
        ▫️Proof verification before submission to L1
        ▫️Designed for light-client compatibility via WebAssembly
      - 3. Ethereum L1 Bridge (zk-SNARKs)
      - Solidity smart contract:
        ▫️Validates incoming zk-proofs (Groth16)
        ▫️Manages the Merkle tree root history
        ▫️Allows trustless withdrawals only if the proof is valid & nullifier unused
      - Additional Security Features
      - ▫️Anti-frontrunning: Used a commit-reveal scheme to prevent withdrawal sniping
        ▫️Trusted Setup Ceremony: Phase 1 MPC coordinated using powers-of-tau in-browser
        ▫️Circuit Size Optimizations: Reduced constraint count by 30% using elliptic-friendly hashes and fixed-denomination optimizations

Results & Impact

Metric	Impact
On-chain Footprint	Reduced calldata size by ~70% via off-chain proof generation
Anonymity Set Growth	Grew to 12,000+ shielded notes in first 4 months
Withdrawal Latency	<15s (including proof gen and submission)
Regulatory Controls	Designed optional compliance hooks for blacklisting UTXOs/nullifiers
Gas Cost for Withdrawals	Averaged 190k gas per Groth16 verified tx

Conclusion

- - - - TechSteck Solutions successfully delivered a scalable, zk-powered privacy layer for Ethereum that empowers users with financial privacy while aligning with regulatory realities. The client now offers this privacy layer as a white-labeled SDK to fintech and wallet partners in Europe and Asia.
        This project sets a foundation for privacy-enhancing DeFi—without needing a new chain or exotic consensus models.

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Core Technologies Used

Key Features & Architecture

1. Shielded Transactions

2. Off-chain ZK Proof Generation

3. Ethereum L1 Bridge (zk-SNARKs)

Additional Security Features

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