Five Practical Use Cases of Zero-Knowledge Proofs in Web3
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Five Practical Use Cases of Zero-Knowledge Proofs in Web3
Five ways zero-knowledge proofs make dApps more efficient, private, and decentralized.
Navigating Web3 tides with focused insightsAuthor: Magik Invest
Translation: TechFlow intern
Zero-knowledge proofs are one of the most important cryptographic technologies being developed. Here are five ways zero-knowledge proofs make dApps more efficient, private, and decentralized:
1. On-chain Multiplayer Games — Dark Forest
Dark Forest is an on-chain multiplayer game where players take turns competing. Players start from a planet and can conquer other unclaimed planets or those owned by other players, with the goal of earning as many points as possible.
Players' planet locations and movements are hidden and unknown to others. Players generate ZK proofs locally on their own systems and publish them on the blockchain, where smart contracts verify whether their actions are valid. For each proof, players submit a hash of their location. All planet location hashes exist on-chain but remain concealed. Players explore regions by computing all possible hashes within an area (which takes time), demonstrating how ZK enables privacy in multiplayer gaming.
2. Private Transactions — Tornado.cash
Tornado.cash allows users to transfer ETH to different accounts privately. Users deposit ETH into a pool and can withdraw it later using a different account.
ZK breaks the link between deposits and withdrawals. When depositing, users submit a hashed secret. When withdrawing, they provide a ZK proof proving knowledge of that secret without revealing which one it was, enabling them to withdraw ETH without exposing which deposit belonged to them.
3. Proofs of Storage — Filecoin
Filecoin enables decentralized data storage for everyone. Each storage provider must submit two proofs:
1. Proof of Replication (PoRep) — proves the data has been downloaded by the provider
2. Proof of Spacetime (PoSt) — proves the data continues to be stored over time
Using ZK, Filecoin compresses PoRep and PoSt from over 100 KB down to just 192 bytes, significantly reducing storage usage. Each storage provider generates 10 ZKPs each for PoRep and PoSt, which can be verified on-chain at very low cost, saving bandwidth and mining resources.
4. Private Identity and Credentials — Iden3
Iden3 powers solutions like PolygonID — sharing user data while preserving privacy. For example, proving you're a member of a DAO without revealing your identity, or proving you're over 18 without disclosing your exact age.
Using ZK, users can submit proofs to a DAO showing they are one of its member addresses without revealing which one, or prove they hold valid credentials (e.g., >18 years old) without disclosing any actual details of the document.
5. Profitability Proofs
Mina Protocol helps traders and funds verify profitability without revealing actual trading activity. Liquidity providers or followers can verify a trader’s profitability without knowing what specific trades were executed or what investments were made.
Using ZK, traders can link their exchange accounts to an application that retrieves their full transaction history. The app then generates a profitability ZKP without exposing any details of the trader's activities.
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