Original title: "Quitting after raising $100 million? Interpreting Aztec Network's business transformation"
Author: Azuma, Odaily
On March 13, ZK Rollup privacy and scaling solution Aztec Network announced that it will gradually shut down its DeFi privacy bridge project Aztec Connect, and will disable deposits from zk.money and other front-ends (such as zkpay.finance) to the Aztec Connect contract a week later.
Aztec Network added that the withdrawal function will remain open for one year, and it is expected that the Aztec Connect contract will not be completely abandoned and the Rollup sorter will not stop running until March 21, 2024, but users are still advised to withdraw funds as soon as possible.
Aztec Network is positioned as a privacy-based ZK Rollup based on Ethereum, aiming to help users access Dapps in the Ethereum ecosystem privately and efficiently. The project has currently launched two main products, one is zk.money, a privacy transfer protocol based on Aztec Rollup, and the other is Aztec Connect, a privacy bridge that links Ethereum Dapps and Aztec Rollup.
Relying on zk.money and Aztec Connect, users can transfer money freely without exposing their own information (address, funds, etc.), and securely access multiple mainstream DeFi protocols such as Lido, Element, Aave, Compound, Uniswap, etc.
Previously, Aztec Network had completed three rounds of financing.
In November 2018, Aztec Network completed a $2.1 million seed round of financing, led by ConsenSys, with participation from Samos Invetment, Entrepreneur First, and angel investors such as Jeffrey Tarrant and Charlie Songhurst.
In December 2021, Aztec Network completed a US$17 million Series A financing round, led by Paradigm, with participation from A Capital, Ethereal Ventures, Libertus Capital, Variant Fund, Nascent, IMToken, Scalar Capital, Defi Alliance, IOSG Ventures, ZK Validator, and individual investors such as Anthony Sassano, Stani Kulechov, Bankless, Defi Dad, Mariano Conti and Vitalik Buterin.
Not long ago, in December 2022, Aztec just completed a US$100 million Series B financing round, led by a16z, with participation from A Capital, Variant, SV Angel, HashKey Capital, Fenbushi Capital, Alumni Ventures and others.
According to today’s official announcement, Aztec Network will abandon running the above two products zk.money and Aztec Connect in the future. (Note: If users still have assets on Rollup, they will only be able to withdraw funds through the community-run sorter, which has a high technical threshold.)
However, Aztec Network stated that it has open-sourced the contract code of Aztec Connect and is happy to see the community proactively fork, deploy, and run new alternative products. In the new round of Grant activities to be launched in April, Aztec Network will also provide financial support for such alternative products.
As for Aztec Network itself, the team will focus on two new major products in the future:
The first is Noir, a general-purpose development language that supports zero-knowledge proofs;
The second is a brand new privacy-oriented blockchain.
Aztec Network explained that the long-term vision of the project has always been to develop a decentralized, private, general-purpose blockchain with Ethereum security levels. To achieve this vision, Aztec Network has adopted a gradual development rhythm, first developing a secure and private address-to-address transfer function (Aztec 1, i.e. zk.money), and then implementing a smart contract interaction function on this basis (Aztec 2, i.e. Aztec Connect).
Today, although zk.money and Aztec Connect will be abandoned, Aztec Network itself will not stop. It will use its previous development experience and technical accumulation as a foundation and focus on the construction of a decentralized, privacy-oriented general blockchain.
As a veteran project in the ZK track, and with heavy financial support from leading institutions such as a16z, Aztec Network's every move is closely watched by the market. Unsurprisingly, today's "shutdown" announcement has sparked intensive discussions within the community.
Some are calling for a fork of the Aztec Connect contract to continue this important privacy infrastructure.
Some people are also exploring the reasons for Aztec Network's transformation. For example, dForce founder Mingdao speculated that regulatory pressure was the main reason behind it - because after Tornado was sanctioned, zk.money has become the main channel for hackers to launder money.
However, more discussions are concentrated in the airdrop circle. Many users believe that with the closure of zk.money and Aztec Connect, the interaction costs they have paid in the past to ambush the airdrop of this project will be wasted.
This concern is not entirely unfounded. In the announcement, Aztec Network only mentioned that it was grateful for the more than 100,000 interactive users, but did not mention how to quantify the "contributions" of these users. In addition, the new chain planned by Aztec Network will most likely adopt the new smart contract language Noir. Whether the 0x address format can be used is still unknown. If the answer is "no", how to map the existing interactive addresses to the new chain will also become a problem.
To put it another way, even if Aztec Network is willing to take care of its “old customers”, the adjustment of its business direction will cause an expected delay in the issuance of coins. Although Aztec Network mentioned that it will launch a new chain in 2023, after all, it is in the ZK track, and “delaying issuance” is a common operation…
In this way, it is not difficult to understand why the airdrop community is wailing and even denouncing Aztec Network as the new "scumbag".