The industry specific challenges that need to be solved before the industry can make truly groundbreaking products. Commonly referred to as the “blockchain trilemma”, security, scalability and decentralization. You can only develop two aspects by sacrificing the third one. For example, you can create a well-decentralized solution that is highly secure but at the cost of scalability.
Aleph Zero offers a novel approach to many problems that industry believe haven’t been solved effectively yet. Does Aleph Zero deserve to be one of the blockchains with the fastest processing speed, security, and scalability among current blockchains on the market?
I. What Is Aleph Zero?
Aleph Zero is a novel public blockchain with private smart contracts. It’s powered by an original, peer-reviewed DAG (Directed Acyclic Graph) consensus protocol, plans to enable privacy-enhancing features based on SMPC (Secure Multi-Party Computation) research and ZKPs (Zero-Knowledge Proofs) and integrates the Substrate stack for the smart contract layer. The platform’s unique characteristics include high speed, scalability, and a set of privacy-enhancing features based on the secure multi-party computation research.
Difference Between A DAG vs A Blockchain
In a blockchain, you have to produce block by block, think of it just like a chain of blocks that's literally a blockchain, and all the data goes in one block and then that block is closed and time-stamped forever and then the next block comes and data goes into that so on and so forth but at a blockchain all transactions have to check the entire history of the blockchain to validate the transaction, this is a lot of time requirements and resources and resource-intensive whereas a DAG, actually looks more like a tree stemming out from the branches new trees and all a DAG does is check the transaction immediately before it to validate the transaction that you're trying to process making it not have to go back and check the entire history of something which makes it exponentially faster and exponentially more efficient.
II. Aleph Zero Technology
Aleph Zero aims to provide a network that is enterprise-ready and uses the latest privacy-enhancing technologies. The developed network is one of the most scalable networks in the cryptocurrency space due to the new distributed ledger technology implemented in the protocol. This creates a network that is easily accessible, scalable, decentralized, secure, and provides privacy for those who deem it necessary.
The technology implemented in Aleph Zero is best illustrated in the inner workings of the privacy layer “Liminal”. The blockchain is attempting to create an entire privacy-preserving blockchain where if you don't want your data shared you won't have to furthermore, they're allowing smart contracts that are written on other blockchains also to use electro's protocol to protect the privacy of those smart contracts as well. The privacy layer creates a more confidential environment for its users, this is achieved through the latest privacy-enhancing techniques called ZK-SNARKS and sMPC.
ZK-SNARKs and sMPC
ZK-SNARKs allow users of the network to prove that they are in possession of certain data without having to reveal the content of this data, for example, a user can prove he is able to buy an object without revealing his balance. sMPC are multiple computers storing incoming data, carrying out multi-party computations and verifying incoming transactions all without revealing the individual input of each user. Thus, the system guarantees that the information of each participant is kept private.
These two technologies form the basis of the privacy layer Liminal, ZK-SNARKS verify if the integrity of the transaction is correct, without revealing any data and sMPC finalizes the transactions. The combination of these techniques provides a revolutionary privacy layer.
III. Aleph Zero Ecosystem
Since the founding of Aleph Zero, the protocol has steadily attracted a lot of positive attention. More cryptocurrency users and organizations are pulled towards the fast, scalable, and privacy-enhancing blockchain. The Aleph Zero ecosystem consists of various organizations that are located in multiple branches.
IV. Aleph Zero Token
Aleph Zero conducted pre-seed, seed and public sale rounds in 2021 with prices ranging from $.04 to $.10 per coin. The total raise was $14.8 million. At launch in January 2022, 180 million coins were in circulation out of a maximum supply of 300 million.
In the Pre-seed funding round in 2018, the project issued AZERO tokens to the investors at $0.04, whereas the public sale price was $0.10 (150% higher than the pre-seed price). It can be said that, although the amount of tokens unlocked when TGE is quite large, totaling 160M at launch date to the market, the token price is still maintained at a profitable level for all investors.
$AZERO is the base currency that powers the Aleph Zero ecosystem.
- Users get discounts on swap fees on the Decentralized Exchange (DEX).
- Users get discounts on fees for asset-wrapping and use of Liminal bridge.
- $AZERO will be used as collateral for wrapped assets in Liminal.
- $AZERO will be used for validator node staking.
30 million tokens are being introduced into the current circulating supply of tokens per year as staking rewards. That number will be distributed among validators, nominators, and the ecosystem treasury. The former group will receive 90% of the tokens, whereas the ecosystem treasury will benefit from the remaining 10%. The funds that make their way into the ecosystem treasury will be used to ensure the ongoing development, growth, and sustainability of the Aleph Zero project through multiple initiatives such as, for example, the ecosystem grant program. When it comes to the tokens that are currently vested, similarly as in many other chains (e.g., the entire Polkadot and Cosmos ecosystems), the system allows owners of such coins to stake them, and users may choose the destination at which the rewards will be accumulated similarly as in the case of staking unvested tokens.
V. Team And Partners
Founded in 2018, the project aims to solve shortcomings of current infrastructure layers in several industries such as the Internet of Things, automotive, ESG, and healthcare. Aleph Zero team consists of academics and professionals who gained their experience at various universities, public and private companies, or competitions such as ACM ICPC World Finals, International Mathematics Competition, the Simons Institute, UC-Berkeley, Jagiellonian University, Tsinghua University, ABB, IBM, Stellar, ING Bank, Riverbed Technology, NEAR, EPFL, and more.
VI. Price Prediction
The highly anticipated release of the Aleph Zero token to the open market has generated a price chart that is very distinct for 2022. After being sold to the community at a price of $0.10, the token stabilized around $0.70, having touched $0.90 during the first moments after the TGE.
Currently at the time of writing, the price is anchored at $1.15 after a pretty impressive 160% growth from early July to early August. We can see that, with the support of two 34 and 89-day EMA, the price is being managed quite well in the 5% price range. If there is consolidation around the current price zone, we can expect a further rally to the nearest resistance at $1.83, which also coincides with the 0.5 level of the Fibonacci Retracement. A rally of almost 60% is also quite juicy at a bearish time across the market like this.
VII. Some Thoughts On Aleph Zero
In essence, Aleph Zero is a comprehensive blockchain project comprising of multiple elements, making it one of the most ambitious projects in crypto. With their DAG protocol (Consensus), Oracle, Cloud decentralized file storage (IFPS), scalable & private smart contracts, decentralized exchange and dark pools coupled with a universal trust-less wallet (Common), they have all the making of a future blue-chip. On top of all that, Aleph Zero ecosystem will also synchronize with other blockchain protocols (e.g. wrapped assets, bridge).
Aleph Zero is facing a highly competitive industry. As a newcomer, the project may have to spend significant financial resources to gain market share. For instance, several platforms (DAG and EVM-compatible) spend considerable money on ecosystem development. However, it is noted that the Foundation has several different on-chain (staking rewards and transaction fees, off-chain workers, providing liquidity on Common and Liminal) and off-chain revenue streams (custom deployments and maintenance services) to maintain a sustainable revenue model.
In closing, although the project has been in development for the past 4 years, it’s fair to say that Aleph Zero is just getting started with the recent launch of their mainnet and the deployment of their SmartNet testnet. It will clearly take them some time to roll out their suite of products, build out an ecosystem, and achieve the beginnings of adoption. However, we have seen that patience with other Layer 1 projects has been very lucrative for early investors with the likes of Fantom, Avalanche, Solana and Near Protocol emerging over the past year or so, each with market capitalizations that run into the billions. So, it’s worthwhile keeping a close eye on potential newcomers such as Aleph Zero, a protocol that despite a successful launch during a bear trend.