Why we invested in Aleo, the platform for building private blockchain applications
Complete transparency and limitations on scalability are impeding the growth of blockchain applications and underscoring the need for a unified, permissionless, and private solution.
Aleo is a platform for private applications using zero-knowledge cryptography. The Aleo blockchain – based on a novel consensus protocol – is designed to be faster and more efficient than traditional models by leveraging zero-knowledge (ZK) proofs. ZK is a cryptographic technique that lets two parties verify information with each other without sharing the underlying data. The result is privacy along with unique scalability benefits of off-chain computation.
We believe Aleo’s solution will enable decentralized applications that are private and scalable. That’s why we joined Softbank Vision Fund 2 and other investors in a $70 million Series B+ round for Aleo. This round follows on the heels of an oversubscribed, $200 million B round that was led by Kora Capital and Softbank Vision Fund 2. The company’s earlier Series A round was led by Andreessen Horowitz (a16z).
The cornerstone of Aleo’s solution is zkCloud, which includes the snarkOS blockchain and snarkVM, an off-chain, private environment for processing transactions at scale. The Aleo blockchain, snarkOS, is a decentralized network consisting of nodes running a novel proof-of-succinct-work consensus protocol.
The purpose of snarkOS is to maintain state – securing data in a decentralized network – and verify proofs that represent state transitions/transactions. The decentralized network enables anyone to deploy or interact with an application or smart contract deployed on snarkOS in a permissionless manner.
The cryptographic core of the Aleo execution model is snarkVM. Unlike the Ethereum virtual machine, snarkVM enables clients to run computations off-chain, publishing only the proof of the computation on-chain. This model enables greater scalability and unlimited application runtime.
To help developers write private applications, Aleo has created a programming language called Leo. It looks and feels like a traditional programming language, with syntax that abstracts the low-level cryptography to make it easy and intuitive to express logic in ZK. The Leo compiler is the first formally verified compiler for ZK proofs. Moreover, the Leo language was influenced by programming languages such as JavaScript, Scala, and Rust, with a strong emphasis on readability and ease-of-use.
Howard Wu, CEO, CTO, and the founder of Aleo is a cryptography legend, and co-author of the seminal paper “Zexe: Enabling Decentralized Private Computation.” He is also co-founder of Dekrypt Capital, an investment firm focused on blockchain technology. Alex Pruden, the company’s COO, was previously a partner at a16z and spent time working for Coinbase. Prior to that he was a member of the U.S. Army Green Beret special forces, and a graduate of West Point.
Aleo’s decentralized, open-source network will offer robust support for building, deploying, and running private applications on the web. The company is betting that a stable token economy, with predictable prices, will provide the perfect foundation for the next generation of computing based on zero-knowledge cryptography.
We think Aleo is well-positioned as one of the few large-scale zero-knowledge native blockchains. The company has the ability to attract developers and users to its innovative new ecosystem. Aleo’s permissionless, open-source network promises to provide a secure foundation for the next generation of decentralized applications that are both private and scalable.
Joan Kim is an Investor at Samsung Next. Samsung Next's investment strategy is limited to its own views and does not reflect the vision or strategy of any other Samsung business unit, including, but not limited, to Samsung Electronics.
If you’re a founder, we’d like to meet you.