Grants Proposal #013 zkFi

Full Grant Size $36,000

Project Description We present a decentralized middleware solution designed to facilitate seamless integration of privacy with compliance using zero-knowledge proofs into a wide range of decentralized applications on multiple blockchains (payments, DeFi, gaming, social networks, DAOs, etc.). The zkFi protocol SDK is designed to serve as a plug-and-play solution for developers to enable privacy-preserving and regulatory-compliant transactions using zero-knowledge proofs in a decentralized way in their protocols. zkFi’s modular approach allows developers to provide enhanced UX to their users while abstracting away the complexities associated with zero-knowledge proofs.

For a more comprehensive understanding, please refer to the whitepaper(https://docsend.com/view/73dzyssjgf7qijca) for detailed information. Take a look at zkFi’s integration Demo(https://drive.google.com/drive/folders/1xfj3feyqSvsC-cp4jnFYc8W-VcKHTkSh?usp=sharing) that shows how seamlessly privacy can be integrated into top favorite protocols without affecting UX.

Project Goals Compliant Privacy: Privacy for individuals, institutions, and businesses that have concrete compliance by implementing involuntary selective deanonymization (in a multi-party manner) inspired by an idea in a paper(https://api.a16zcrypto.com/wp-content/uploads/2022/11/ZKPs-and- Regulatory-Compliant-Privacy.pdf) by researchers at a16z. This is unlike other privacy solutions that only employ weaker solutions (limits, address blocking, etc.). We aim to match industry-standard AML practices that are not available right now. Simple onboarding and UX: 1. Simply enable zkFi Snap and do private transactions. 2. Share regular wallet address or ENS or one-time stealth address for payments. 3. Account Abstraction for ERC-20 gas payments or even sponsor gas (by protocols). Future endeavors include threshold signatures via MPC for multi-sig environment requirements. 4. Multi-sign functionality is available for businesses. Plug-and-play solution: zkFi can be seamlessly integrated into protocols like Aave without affecting their existing smart contracts or altering the user experience of their front end. Thanks to SDK. Better DevX: Offers developers the flexibility to handle transactional assets while abstracting away the complexities associated with ZKP or compliance. On front SDK renders APIs that are very simple to use. DeFi without liquidity fragmentation or slippage: By incorporating a privacy layer as a set of smart contracts on the chain itself, zkFi enables users to engage with DeFi protocols without experiencing any issues related to liquidity fragmentation or extra slippage overheads.

Project Milestones

1. We have already worked on Metamask Snap. We need to test it thoroughly for transaction signature to make it live.
2. Integrating the features that we worked on SDK on the front-end of user-facing applications (stealth address, Account Abstraction-related features like paying gas fee in ERC-20 token, bundler).
3. Develop an in-house compliance solution - selective deanonymization by leveraging MPC and ZK-verifiable encryption.
4. Soft launch with private testers to get initial feedback for improvements.
5. Partner with institutional, business partners for the mainnet launch.
6. Security audit for protocol, Snap as well as cryptography used within SDK.
7. The beta mainnet launch.
8. For the growth stage: doing community efforts, and partnering with hackathons.
9. Scale the infrastructure in line with increased usage.
10. Future features as needed and agreed upon.

Timeline Month 1-2: Testnet product development Wallet integration, transactions signing from Metamask Snaps User-facing app with account abstraction features where users can sign transactions using Metamask itself. Sample integration with at least one protocol (e.g. Aave) for demonstration. Month 3: Testnet launch, begin marketing and feedback collection and security audit. Generate buzz on social media and privacy space by partnering with influential research partners, and top people in the blockchain space to increase the adoption. Month 4: Finalize product improvements, and plan the next phase based on feedback for the mainnet launch. Mainnet beta launch Partner with institutional, and business partners for the mainnet launch Onboarding partner for SDK integration Scale the infrastructure in line with increased usage Future features as needed and agreed

Budget $16,000 will go towards developer costs and grants, and $20,000 will go towards a security audit Month 1-2: Testnet product development, self-sustainability, short-term/freelance hires (JS/TS developer). ($10,000) Month 3: Testnet launch, begin marketing and feedback collection, security audit ($25,000) Month 4: Finalize product improvements, and plan the next phase based on feedback for the mainnet launch ($6000)

About the Team The core team of zkFi has extensive experience in software development with expertise in the fields of mathematics, cryptography, and machine learning. They possess a proven track record of significant contributions to the Ethereum open-source community and have spearheaded the creation of groundbreaking products within the web3 ecosystem, including an on-chain global inflation dashboard, and financial data marketplace (Truflation), Inflation cryptocurrency/ Flatcoin (NUON), a non-custodial wallet (Laguna) and their governance platforms. Within the team, Naveen Sahu is responsible for overseeing all technical aspects of zkFi, while Mitul Gajera focuses on product development and growth strategy. zkFi’s R&D efforts are also supported by two of the leading researchers in the crypto space: Hamish Ivey-Law who is a principal applied cryptographer at Polygon Zero (previously Mir Protocol); Amit Chaudhary who is the founder of ChainSolid Labs and ex-head-of-research-at-Polygon Labs.