Bolt Labs announced today that it plans to integrate its off-chain Bitcoin private payments protocol called zkChannels to the Tezos blockchain. The company is working with teams at Nomadic Labs and Metastate to complete the integration via an amendment proposal to be done by 2021.
zkChannels To Build On Tezos
Originally called BOLT, zkChannels v1 protocol saw the light of day earlier this year when Bolt Labs announced that it “enables private payments via zero-knowledge proof of knowledge techniques, with cryptocurrencies like Zcash and Bitcoin in mind.” The protocol underwent several updates since then to be fully compatible with “Bitcoin-like” digital currencies.
More network upgrades are to come in the upcoming year, according to the press release shared with CryptoPotato earlier today. It reads that the company has begun working with Nomadic Labs and Metastate to bring the protocol to the Tezos blockchain.
The statement asserts that the zkChannel protocol already offers a few vital features, including keeping data asymmetrically to continue preserving privacy for the end-user.
“The customer keeps and updates all relevant channel information and proves, every time a payment is made, that the channel state is consistent with that payment. This ensures the merchant learns nothing beyond the payment amount, so customer privacy is maintained.”
Consequently, both the consumer and the merchant end up viewing different data on the channel’s state. More precisely, the customer is aware of the distribution of funds, while the merchant knows the total channel balance, but can’t link any received payments to it. However, zkChannels “can be safely closed down at any time by either party.”
Bitcoin, Zcash, And DeFi
Today’s statement also highlights that zkChannels is already live for Bitcoin and should start operating for Zcash soon. Following the integration on Tezos, the company expects to receive “a number of features,” which are “a natural fit for our technology.”
For instance, Bolt Labs plans to build a cross-chain bridge utilizing zkChannels to connect Bitcoin or Zcash to Tezos. Additionally, the firm wants to provide censorship-resistance features to decentralized finance (DeFi) applications.
Bolt Labs also considers employing the Liquid Proof-of-Stake governance mechanism of Tezos to reduce the friction on its platform and to enhance security. The blockchain-based firm will be able to prove that its smart contracts perform accurately using the secure-by-design Tezos smart contract language with formal verification properties.
“This is particularly important for financial smart contracts (e.g., tokenized assets, loans, etc.) which require guarantees that funds will not be lost or frozen due to bugs in the code.” – the statement explains.