Kusama Shield | Dotsama assets and ZK 

EVM based Multi Asset ZK shielded pool for Kusama
Project name: Kusama Shield
<img src="https://i.ibb.co/8D73Vnm8/ksmshield.png" alt width="640" height="640" />
Summary:&nbsp;
This is a proposal for a privacy-friendly multi-asset shielded pool. Allowing anyone on Kusama to deposit any asset into the pool without reveiling the destination.
By utilizing Moonriver parachain, the goal is to have a solidity contract that can be utilized with regular assethub XC-20 parachain assets + erc20 evm tokens. Targeting a wide range of different assets.
This is a proposal to bring more privacy and ZK tech into Kusama by developing zk and dotsama compatible smart contracts, Make ZK technology more compatible with the Dotsama ecosystem.
Users generate a zk proof when depositing tokens into the Pool. This commitment is stored on-chain but does not reveal the user's identity or balance.
Interacting with Assethub native asset in solidity: 
Moonriver provides a good home for this application as its supports interacting with assethub based assets using their solidity interface:
<a href="https://docs.moonbeam.network/builders/interoperability/xcm/xc20/interact/#calculate-xc20-address">https://docs.moonbeam.network/builders/interoperability/xcm/xc20/interact/#calculate-xc20-address</a>
<a href="https://docs.moonbeam.network/builders/interoperability/xcm/xc20/interact/#The%20ERC-20%20Permit%20Solidity%20Interface">https://docs.moonbeam.network/builders/interoperability/xcm/xc20/interact/#The%20ERC-20%20Permit%20Solidity%20Interface</a>
This would allow anyone to send tokens with XCM from any Kusama connected parachain and then transfer the tokens over to the EVM Moonriver chain where they can utilize the privacy pool.
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Problem statement: 
There is a big lack of Privacy-friendly technology in the Dotsama ecosystem. The Pseudonymity of holding an asset in your wallet on a Dotsama chain is not enough to remain hidden. By learning from previous web3 project such as Zcash. Keeping your assets in a shielded pool allows for anonymous ownership. Currently there is a Big lack of ZK dapps in the Kusama Space which is something we want to solve.
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From the community:
Erin interview: <a href="https://www.youtube.com/watch?v=ziXIjY5MeVo">https://www.youtube.com/watch?v=ziXIjY5MeVo</a>
Shawn's forum post: <a href="https://forum.polkadot.network/t/make-kusama-chaotic-again/11123">https://forum.polkadot.network/t/make-kusama-chaotic-again/11123</a>
Web3 foundation push towards more ZK on Kusama: <a href="https://kusama.subsquare.io/referenda/498">https://kusama.subsquare.io/referenda/498</a>
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Solution:
In order to bring privacy to a wide set of Asset, we suggest a zk Multi asset shielded pool. Creating a base for interacting with dotsama assets and ZK in solidity. Anyone can then take that base build cool applications on top of it.
Features:
<ul>
<li>Zero Knowledge proofs with halo2 XC-20(parachain native/assethub compatible assets) and ERC20 EVM assets supported</li>
<li>Censorship resistant Anyone can interact with the privacy pool contract permisionly.</li>
<li>UI could be hosted on ipfs</li>
<li>Plug and play privacy Once the smart contract and UI is developed it can be deployed any EVM compatible parachain.</li>
<li>Not TEE(trusted execution enviroment) based Several approaches have been taken to make data more privacy-friendly by utilizing proprietary trusted execution enviroments, this limits the users hardware options and makes the user rely on technology that continuously gets broken by security researchers. <a href="https://arstechnica.com/information-technology/2024/12/new-badram-attack-neuters-security-assurances-in-amd-epyc-processors/">https://arstechnica.com/information-technology/2024/12/new-badram-attack-neuters-security-assurances-in-amd-epyc-processors/</a> <a href="https://www.sciencedirect.com/science/article/pii/S0167404823000901">https://www.sciencedirect.com/science/article/pii/S0167404823000901</a></li>
</ul>
What can this enable?&nbsp;
<ul>
<li>More research in the dotsama ZK space</li>
<li>More interoperability for dotsama assets and ZK Anonymous donations</li>
<li>Privacy for all assethub based assets</li>
</ul>
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Align with Kusama: 
<ul>
<li>Privacy-focused</li>
<li>Decentralized | UI gets hosted on IPFS(no opinated hosting providers), permisionly send assets via XCM and deposit to the ZK contract. No centralized party needed.</li>
<li>Self-Sovereign | Smart contract lives on-chain allowing anyone to interact with it and build things with it.</li>
</ul>
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Why EVM not !ink?
<ul>
<li>A lot of research is being made by multiple ecosystems into Zero knowledge with Solidity.</li>
<li>The solidity &lt;&gt; ZK landscape is more mature than the ink &lt;&gt; ZK landscape.</li>
<li>Compatible with future Assethub Plaza | By the development of Assethub into Plaza, in the near future we would be able to run evm contracts on Assethub.</li>
</ul>
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User journey: 
<ul>
<li>User XCM KSM from parachain/relaychain to Moonriver from the user interface.</li>
<li>User selects how much to deposit</li>
<li>Reciever claims the selected asset in the withdraw section</li>
</ul>
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Solidity Zero Knowledge halo2 implementation from:
<a href="https://github.com/privacy-scaling-explorations/halo2-solidity-verifier">https://github.com/privacy-scaling-explorations/halo2-solidity-verifier</a>
from <a href="https://pse.dev/en">https://pse.dev/en</a>
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UI sketch:
<img src="https://i.ibb.co/Pv5HLFcD/demo0.png" alt width="639" height="269" />
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The first iteration of the user interface will support 3 main functions:
<ol>
<li>Deposit deposit tokens into the shielded pool.</li>
<li>Withdraw Withdraw tokens from the shielded pool.</li>
<li>XCM transfer Transfer tokens to other parachains.</li>
</ol>
Support for browser wallets(polkadot.js.org/talisman/subwallet)
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Correlation Attacks: 
Some anti-correlation attack mitigations will be put in, including:
Allowing only fixed amounts
If one user deposits 21.3737475 tokens and withdraws the same amount, it's very easy for a malicious actor to watch the balance changes and figure out where the funds are going. But limiting the users to only deposit 1, 10, 100, or 1000 units of the token, it makes it a lot harder to track several people that deposit the same amount.
Batch payouts 
Batch'ing withdraws, sending multiple withdraws with same amount to multple users.
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Limitations: 
<ul>
<li>Not audited(yet)</li>
<li>The more people who use, the better privacy the users get</li>
</ul>
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Budget:
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Summary:
The goal is to build a working stable MVP.&nbsp;
<ul>
<li>Amount of hours: 340</li>
<li>Estimated Delivery Time: 3.5-4 months</li>
<li>Hour rate: 90 USD</li>
<li>FTE: 2</li>
<li>Requested funding: 30 600 USD</li>
</ul>
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<table style="border-collapse:collapse; width:59.3365%; height:266px;" border="1">
<tbody>
<tr>
<td style="width:33.3341%; height:21px;">Name</td>
<td style="width:33.3341%; height:21px;">Description</td>
<td style="width:33.1812%; height:21px;">Hours</td>
</tr>
<tr>
<td style="width:33.3341%; height:49px;">
Tests
</td>
<td style="width:33.3341%; height:49px;">
Tests for Smart contract and UI
</td>
<td style="width:33.1812%; height:49px;">40</td>
</tr>
<tr>
<td style="width:33.3341%; height:49px;">
Smart contract
</td>
<td style="width:33.3341%; height:49px;">
Solidity smart contract development
</td>
<td style="width:33.1812%; height:49px;">120</td>
</tr>
<tr>
<td style="width:33.3341%; height:49px;">
User interface
</td>
<td style="width:33.3341%; height:49px;">
User interface development
</td>
<td style="width:33.1812%; height:49px;">120</td>
</tr>
<tr>
<td style="width:33.3341%; height:49px;">
XCM transfers
</td>
<td style="width:33.3341%; height:49px;">
Ability to send assets with XCM
</td>
<td style="width:33.1812%; height:49px;">40&nbsp;</td>
</tr>
<tr>
<td style="width:33.3341%; height:49px;">
Design
</td>
<td style="width:33.3341%; height:49px;">
UX and logo design
</td>
<td style="width:33.1812%; height:49px;">20</td>
</tr>
</tbody>
</table>
Delivery:
Code will be published as open source under the MIT license.
Code repos will be publicly available here: <a href="https://codeberg.org/KusamaShield">https://codeberg.org/KusamaShield</a>
The interface will be deployed on IPFS.
All project updates will be shared publicly on Polkassembly. If the timeline is not met, the funds will be returned to the treasury.
Team: 
The majority of the team wish to remain and contribute anonymously, in order to provide more transparent and work checking, a public moderator group has been selected.
Developer team consists of one Solidity EVM developer and one React UI frontend developer. That will contribute to the development of Kusama Shield on the public codeberg repo.
Moderators: 
flipchan - Fan of Polkadot since 2021, previously substrate developer on various chains including early Picasso chain and Edgeware, Uptest testing, Bagpipes UI development.&nbsp; &nbsp;&nbsp;
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more moderators soon to be added!
Allow anonymous contributors&nbsp; &nbsp;
The codebase will be available on codeberg, which is best pratice for anonymous contributors, inspired by Darkfi: <a href="https://darkrenaissance.github.io/darkfi/dev/contrib/contrib.html">https://darkrenaissance.github.io/darkfi/dev/contrib/contrib.html</a>
Future:&nbsp; &nbsp;
<ul>
<li>Publish guides and how-tos on how anyone can interact with deposit and withdraw functions of the ZK pool.</li>
<li>Testnet version on Paseo Solidity zk pool contract gets audited</li>
<li>Privacy friendly version of Polkadot Gifts</li>
<li>Incentivized privacy pools</li>
</ul>
Once the new version of Assethub launches and smart contracts can interact with staking, ideally the funds in the ZK pool will be able to earn rewards, incentivizing more people to add coins to the shielded pool and increasing the anonymity set.
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After this PoC is built, next proposal would be to cover the auditing costs, ideally the code would be auditable by a reputable security company such as <a href="https://www.trailofbits.com/">Trail of Bits</a> or <a href="https://www.fyeo.io/blockchain-security-audit">Fyeo.</a>
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Sustainability: 
Ideally a 0.25-0.5% fee on each transaction will be taken to sustain future development.
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FAQ:
What about all the Tornado Cash fud that is around?
Recently there has been a lot of attention on an ethereum privacy tool called Tornado Cash.
Interview with Coinbase about tornado cash case, where the US court rules that immutable smart contracts are not property and shall not be sanctioned under ofac. <a href="https://m.youtube.com/watch?v=4BfiRMGs6Hg&amp;t=1s&amp;pp=2AEBkAIB">https://m.youtube.com/watch?v=4BfiRMGs6Hg&amp;t=1s&amp;pp=2AEBkAIB</a>
Interacting with a zk smart contract is done in a non custodial way, only the users has control of its own funds, no centralized party controls the user funds and the project is in no way considered a <a title="Virtual asset service provider" href="https://www.virtualassets.com/news/what-is-a-virtual-asset-service-provider/">VASP</a>.
More tornado cash interviews:
<a href="https://m.youtube.com/watch?v=nFhe9kSbLGs&amp;pp=ygUWQmFua2xlc3MgdG9ybmFkbyBjYXNoIA%3D%3D">https://m.youtube.com/watch?v=nFhe9kSbLGs&amp;pp=ygUWQmFua2xlc3MgdG9ybmFkbyBjYXNoIA%3D%3D</a>
<a href="https://m.youtube.com/watch?v=kFqBjAEqzoo">https://m.youtube.com/watch?v=kFqBjAEqzoo</a>
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ZK projects in other ecosytems: 
<a href="https://www.railgun.org/">https://www.railgun.org/</a>
<a href="https://protocol.penumbra.zone/main/index.html">https://protocol.penumbra.zone/main/index.html</a>
<a href="https://namada.net/">https://namada.net/</a>
<a href="https://darkrenaissance.github.io/darkfi/start-here.html">https://darkrenaissance.github.io/darkfi/start-here.html</a>
<a href="https://github.com/zcash/halo2">https://github.com/zcash/halo2</a>
<a href="https://arxiv.org/pdf/2303.08221">https://arxiv.org/pdf/2303.08221&nbsp;</a>
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What are your thoughts? Comment :)
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- **Problem Statement:** Lack of privacy-friendly technology in the Dotsama ecosystem, aiming to enhance anonymity by introducing a multi-asset shielded pool using Zero Knowledge technology.
- **Significance:** Addressing the need for more ZK dapps in the Kusama space, enhancing privacy for asset ownership, and promoting research in the ZK space.
- **Proposed Solution:** Development of a zk Multi-asset shielded pool compatible with various assets, utilizing Moonriver parachain and Solidity contracts for interaction.
- **Expected Outcomes:** Enhanced privacy for users, increased ZK technology compatibility within the Dotsama ecosystem, and potential for cross-chain EVM calls and integrations.

#2659 Kusama Shield | Dotsama assets and ZK