Nocturne: How stealth addresses power private account abstraction
Nocturne is a protocol that combines account abstraction with zero-knowledge proofs and stealth addresses to create “private accounts” — the next step in onchain privacy.
You’ve likely heard about account abstraction in recent times as more development unfolds to simplify onchain activities for end users. This design has unlocked mental models for thinking about privacy onchain in a user-friendly way that has little to no learning curves.
Nocturne Labs is accelerating onchain privacy using a combination of account abstraction, zero-knowledge proofs, and stealth addresses to create what they call “private accounts.” Imagine your normal Ethereum account, where you deposit funds, receive payments, and transact with new protocols. This is what Nocturne private accounts allow for— but with built-in asset privacy.
At Bankless Ventures we’re especially excited about Nocturne’s design and are thrilled to back the team in their $6M seed round alongside Vitalik Buterin, Polychain, Robot Ventures, Hack VC, Bain Capital, and others.
Nocturne’s Protocol Design
Private accounts
As a concept introduced by Nocturne, Private accounts let you perform onchain activities without others knowing who did what– all from a regular Ethereum account. Want to purchase a new meme coin on a DEX without everyone knowing about it? Private accounts are your friends here. Historically, to conduct a private transaction, one might have first withdrawn funds to a CEX or used something like tornado cash, both of which have trade-offs.
Nocturne is the protocol that powers private accounts on Ethereum. Users have “internal” accounts within Nocturne where receiving/spending funds from these accounts works anonymously (not all tied back to the same address). Users can deposit or receive payments into their Nocturne account anonymously. They can then prove (in zero-knowledge) that they own such funds and use them for arbitrary transactions (e.g. paying a friend, swapping on a DEX, staking on Rocket Pool, etc).
Simplified user flow:
What are stealth addresses?
Stealth address schemes allow users to have a single private key that controls many ephemeral, one-time addresses. Nocturne employs its own stealth address scheme where a user’s “account” is simply the collection of all their stealth addresses (each of which presumably holds some assets).
Example: John needs to send 1 ETH to Chris without letting everyone know that Chris is the one getting the money. John also wants to do this without talking to Chris first. To make this work, we need a system where John can create single or multiple addresses that belong to Chris, but no one else can tell that they're Chris. Nocturne’s stealth address scheme allows for this in an easy, non-interactive manner.
Stealth addresses meet shield pools
A shielded pool enables the accounting and spending of funds without revealing their owners. Users deposit funds into a shielded pool, producing a “note” in return that represents the users’ claim to their funds. The main fields on a note are the token address, the amount of tokens the note contains, and an “identifier” (address) for the owner. To spend the funds contained in the note, the user must prove in zero-knowledge that they have the key corresponding to the owner field in the note. Learn more about Shield Pools here.
The combination of stealth addresses and shield pools enables Nocturne to offer secure and composable private accounts.
Team behind Nocturne
The founding team of Nocturne consists of Luke, Sebastien, and Daniel. Luke was previously an engineer at Celo and one of the founding developers of Nomad, the cross-chain bridge. Sebastien was previously a research engineer at Proxima Labs who contributed significantly to Polygon Zero’s plonky2 proof system during his work on verifiable data flows. Daniel was previously a backend developer at Gemini who developed much of their core institutional APIs. Additionally, Wei Dai, cryptography researcher and partner at 1kx, is a founding advisor to the project.
Roadmap
Nocturne’s v1 protocol is mostly completed. The protocol has undergone two audits from Trail of Bits and Zellic collectively. The team plans to launch on mainnet in Q4 2023 and will make the product available via their private vault UI.
We are thrilled to be supporting this team along their journey. To learn more about Nocturne Check out the Nocturne docs and follow them on X for updates.
About Bankless Ventures
Bankless Ventures is a $40M early-stage Web3 Venture fund launched in 2023 to empower pioneers to explore the frontier of Web3.
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