The world’s first Auditable Zero-knowledge Secure Transaction Feature is now live on Mystiko.Network!

4 min readSep 20, 2022

Secrecy is a basic human right, but not for malicious and illegal activities. To protect the basic secrecy rights for users with legitimate reasons from the bad actors exploiting on-chain secrecy, Mystiko designed the first decentralized auditing system for onchain secretive transactions.

The auditable zk feature is now alive on Mystiko.Network V3 on testnets “AuditableZK” 👉

New feature in Mystiko V3 on testnet: Decentralized Secrecy Transaction Audit

Mystiko designed the first decentralized auditing system for onchain secure transactions. In Mystiko’s decentralized auditing system, a decentralized auditing committee, consisting of reputable institutes and entities chosen by the community, will be established and the committee will support auditing the transaction flow of suspicious deposits from bad actors while protecting the secrecy of regular users.

In Mystiko V3 design, when compliance responses are expected by the regulator, the transactions of suspicious assets will be revealed and audited in a decentralized manner by trusted auditors based on majority votes of the auditing committee.

Key highlights of Mystiko’s V3 decentralized audit feature

  1. What is the scope of auditing in Mystiko.Network? View only. Mystiko auditors will only be able to VIEW and audit transaction flow of suspicious deposits from bad actors, upon the request of regulators and the majority approval of the auditing committee. Mystiko auditors will only be able to VIEW the transaction history over a certain period of time upon the majority approval of the Mystiko auditing committee.
  2. Only suspicious transactions, such as sanctioned assets, will be audited. Auditing process will only be kicked off when sanctioned assets/addresses are identified in Mystiko user pool
  3. Your assets will always be secured by Mystiko. No one, not even Mystiko auditors, can intercept/temper zk transactions in Mystiko.Network. Mystiko auditors will only be able to VIEW the transaction history over a certain period of time upon the majority approval of the Mystiko auditing committee.
  4. Who should be the Mystiko auditors? Reputable and reliable auditing partners, such as NGO, IGO, global auditing firms, regulators with strong background and expertise in compliance, technology, and finance are ideal Mystiko auditing committee members. The final members for the committees are chosen by the Mystiko community. Suggest and vote for the auditing partners that you trust the most to ensure a sustainable web3 zk future.

Why decentralized audit in zk transaction?

On August 8th 2022, the U.S. The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash and called it “a significant threat to national security.” The underlying concerns of regulators might come from the fact that there is no visibility of suspicious transaction flow, i.e. the outlet and recipient of potential ‘laundered money’, and inability to separate assets of bad actors and users with daily secrecy demands.

However, there are many legitimate reasons why someone would want to use security features. For example, an employee getting paid by their company in crypto may not want their employer to know all of their financial details. An NFT investor may not want to become the target of potential harassment or robbery. Donors might want to keep their identities hidden when they donate funds.

To balance the right to preservesecurity for users without illicit purpose and the compliance request of global regulators, Mystiko designed the first decentralized auditing system for onchain zk transactions.

How does Mystiko auditable zk security solution work?

  • Auditing committee foundation : Trusted auditors of Mystiko.Network, such as regulators, reputational financial institutions and auditing firms, will be authorized to create auditor secret keys, whose paired public keys that are used for zk transaction data auditing.
  • Encryption: When a personal deposit is withdrawn or transferred, while zero-knowledge proof is generated, the linkage between deposit and withdrawal/transfer will be split into multiple shares and encrypted with the public keys of auditors. Each auditor will have an encrypted secret share of the linkage data. [Tech reference: Shamir’s Secret Share]
  • Audit: In order to view the complete info of a zk transaction, the auditing committee will have to reach an agreement by passing a majority vote to decrypt the encrypted transaction history, with their secretly stored secret keys.

Mystiko.Network V3 on Testnets Availabilities

The user experience and tech capacity of Mystiko.Network V3 on testnets “AuditableZK” will remain the same as V2, but with better users security with the Mystiko’s latest auditable zk updates :

  • Chains: Ethereum, BNB Chain, Polygon, Fantom, Avalanche, Aurora(upcoming), Moonbeam
  • Wallets: MetaMask
  • Bridges: Celer IM, Mystiko Test Bridge, LayerZero, Axelar Network

❗️Deposit, maintenance and operation of Mystiko V2 on testnets will be stopped from Sep 20th, 2022❗

About Mystiko.Network

Mystiko.Network serves as the foundational layer of Web3, enhancing the scalability, interoperability, and security of blockchains. Leveraging zero knowledge proof with industry leading “zk of zk” technology, Mystiko.Network guarantees interoperability, scalability and security, all at once.

Learn more about Mystiko. Network and follow us:

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Mystiko is the base layer of Web3. Mystiko operates as a universal ZK SDK, enhancing the scalability, interoperability, and confidentiality of blockchains.