The Problem of State Denial
The problem of “State Denial” in traditional privacy preserving systems:
Privacy protocols often rely on rigid frameworks that obscure the global state, creating a trade-off between secure data privacy and composability. This issue, known as "State Denial," occurs when private states within the ledger are isolated, hindering meaningful interoperability between applications. Silent Protocol examines the impact of State Denial across traditional system architectures and proposes a pathway to achieve composable privacy in decentralized frameworks.
Classification of System Architectures
Privacy-preserving systems are categorized into three architectures based on their state and operational flexibility:
Monostatic Systems: Monostatic systems maintain a consistent global state dimension, requiring users to operate within pre-defined, fixed instructions. While restrictive, they ensure the preservation of value and security, though they limit composability.
Multistatic Systems: Multistatic systems enable users to modify the global state by defining new functions within set rules, offering limited extensibility. Users can interact with other functions only if their application state is registered in the target program. However, the absence of a system-wide aggregated state prevents ecosystem-wide functionalities, such as Automated Market Makers (AMMs), which depend on broader state visibility.
SubSocket Systems: SubSocket systems create isolated, heterogeneous spaces within the global state layer. Although they allow access to the shared state of individual applications, they lack mechanisms to provide visibility into other applications’ states within the same framework. This isolation restricts inter-function communication, intensifying State Denial challenges.
The Challenge of State Denial
Traditional privacy frameworks excel in specific scenarios:
Applications focused on a single purpose, like value conservation.
Peer-to-peer-based applications.
Applications not requiring full interdependence.
However, they cannot support an ecosystem of privacy-preserving applications capable of sharing states and achieving interoperability.
The Impact of State Denial
A key limitation of privacy-preserving frameworks is their inability to grant users access to other application states within the global ledger, leading to:
Inter-function Communication: These frameworks support intra-function calls within a single program but fail to enable inter-function calls across multiple programs, as external calls cannot access the target application’s state.
Global State Aggregation: Multistatic and SubSocket systems lack system-wide state aggregation, preventing users from performing operations like multi-party computations or system-wide optimizations that require global state access.
Ecosystem Growth Constraints: By isolating application states, these systems hinder the development of interoperable ecosystems, reducing opportunities for collaborative functionalities and value flows across the network.
The Paradox of Privacy and Composability
Privacy-preserving systems face a core tension:
Privacy Constraint: Encrypted application states restrict data access to the application owner(s), preventing unauthorized network members from interacting with the private state. This ensures privacy but hampers composability.
Composability Constraint: Composability demands open access to application states across the network to enable inter-program interactions, but this openness undermines privacy guarantees.
This tension highlights the limitations of systems like ZEXE, zkVM, and Dialeaktos, which use UTXO-based architectures. These frameworks are limited to peer-to-peer interactions and cannot support system-wide state aggregation. Conversely, public blockchains like Ethereum enable cross-application interactions and atomic function calls, but their transparency compromises user privacy.
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