HyperDAO’s collaboration with Suterusu to enhance its DeFi security for improved protection

HyperDAO is a one-stop decentralized finance platform that enables users to employ a variety of financial services at cheaper prices and with more efficiency and interoperability than what traditional institutions can offer. On top of providing a variety of services such as crowdfunding and asset management for the community as well as providing SDK for developers alike, HyperDAO is also actively seeking to expand its repertoire and improve its services by collaborating with different partners to enhance its DeFi platform’s capabilities and efficiency. One such benefactor is Suterusu.

Suterusu helps empower blockchain networks to have state of the art privacy protection over smart contracts, transactions and data bringing ZCash level privacy to any blockchain platform or application. It integrates a state of the art trustless ZK-SNARK scheme with nearly constant size proofs, efficient proof generation and verification. Suterusu also introduces a Suter Virtual Machine (SuterVM) that supports smart contract blockchains such as Ethereum. Suterusu is fresh technology based on sound principles, and a true future-forward privacy protocol.

HyperDAO has many areas where confidentiality is essential to its functionality. For example, transactions should have some degree of anonymity while still balancing transparency and trust amongst users. This is particularly relevant in HyperDAO’s stablecoin system and asset management system where the user’s financial privacy is of utmost importance. Another area where privacy is important is in HyperDAO’s community governance where again there should be a delicate balance between privacy and transparency. Thus, Suterusu’s partnership with HyperDAO plays a very important role in HyperDAO’s DeFi ecosystem.

Why did we choose Suterusu?

Suterusu has a novel trustless zero-knowledge proof scheme for smart contract platforms that can help solve several issues such as poor generation procedure and scalability issues due to proof size. Suterusu implements and integrates the state-of-the-art setup-free zero-knowledge proof protocol to enable trustless anonymous payment for smart contract platforms. Their proposed ZK-conSNARK scheme also attains the optimal balance between performance and security, i.e., almost constant proof size and efficient proof generation and verification. Suterusu also has many additional advantages, such as those listed below:

1. Efficient zero-knowledge proofs without trusted setup

The trusted setup step of a zero-knowledge proof scheme involves trapdoor information, which is equivalent to the private key in a signature scheme. If we map it to the case of zero-knowledge proof, this kind of trapdoor information being stolen means that an attacker can generate unlimited amounts of legitimate zero-knowledge proofs, allowing the adversary to print unlimited amounts of currency without the possibility of being detected.

The zero-knowledge proof implemented by Suter Mirage 1.0 does not require a trusted setup. All the parameters involved in the setup step are randomly chosen from the corresponding group through a transparent process. The implementation of their zero-knowledge proof algorithm is in the public repository, so anyone can verify this by checking their code.

2. Anonymous payment for Smart Contracts platforms

At present, the implementation of the general anonymous payment scheme in the market mainly aims to serve the layer-1 privacy coin. The main difference between an anonymous payment implementation for a smart contract platform and that for layer-1 privacy coin is:

For the layer-1 privacy coin with an UTXO model, the sender does not need to provide a zero-knowledge proof to prove the legitimacy of the encrypted secret when sending the secret key corresponding to the encrypted amount to the recipient.

While in the account-based model, all the transfer amounts are eventually aggregated into one user account. Therefore, even if the random key of one encrypted transfer amount received by an account cannot be opened once, it would imply that all the other incoming amounts of the respective account cannot be used anymore, because the random key after aggregation cannot be used to open the corresponding ciphertext.

Therefore, the anonymous payment scheme for the smart contract platform is required to provide zero-knowledge proof for the encryption of the account key to mitigate the aforementioned problems. This also implies we need to change the corresponding transfer consistency proof and range proof respectively; The anonymous payment library for the testnet provides transfer consistency proof and range proof for the smart contract platforms.

3. Client supporting formal verification

The testnet client is written in the OCaml language, which has recently been widely used in smart contract programming. The main reason is that it is a functional programming language is because it is easy to write developer libraries and tools for formal verification.

Due to OCaml language’s strong type system and memory management features, OCaml language has a unique advantage in supporting formal verification. The technical community of OCaml language is particularly strong, there exist many tools that can be used to generate OCaml code for formal verification, such as F *, Coq, Why3, etc. The functions currently supported by the testnet client include: creating an account, performing transfers, viewing account information, generating a signature and the corresponding zero-knowledge proof etc.

How will Suterusu help HyperDAO?

HyperDao will work together with Suterusu on privacy-preserving collateral since the amount involved in a collateral scheme needs to be hidden in order to preserve the client’s financial privacy. This includes the Bitcoin collateralized and the HyperUSD redeemed through running the collateral smart contract. Since Suterusu’s protocol is an anonymous payment scheme for smart contract platforms, its design can be directly combined with the HyperDAO collateralized debt commitment system to add privacy-preserving functionality.

SuterVM can also contribute to the HyperDAO ecosystem by providing a more private on-chain governance mechanism. The Suterusu project has done a pretty deep analysis regarding the on-chain governance mechanism, including previous work with the Definity economist Yulin Liu regarding private on-chain governance and their proposal on privacy-preserving liquid democracy mechanism. All these results can be directly applied to the HyperDAO ecosystem.

Suterusu has put forth a convincing solution for privacy preservation for HyperDAO’s systems and has an impressive array of capabilities that can support HyperDAO’s various functions. Suterusu’s plug and play module SuterVM will also make integration with HyperDAO’s system very easy. This is why we will be working closely with Suterusu in the coming months to add layers of privacy across our services.