Mina Zero-Knowledge Survey Report: ZKP Will Shine in the Fields of DeFi, Web3, and the Metaverse

Author: Mina Foundation

In the future, when we look back at the industrialization of ZKP, it will be a key milestone in the large-scale transition from private chains to public chains.

--- Paul Brody, Head of Blockchain Technology at EY

Definition of ZKP: an abbreviation for zero knowledge proof (零知识证明).

--- A cryptographic primitive that proves and verifies information without exposing the underlying information, only showing whether the statement is true or false.

If I were to predict five or ten years from now, I think the topic will revolve around zero knowledge proofs… and the technology and implementation of privacy features, just like how everyone talked about blockchain three to five years ago.

--- Jill Gunter, Head of Slow Ventures

The field of zero knowledge proofs, while maintaining decentralized systems, provides privacy protection features for many cryptocurrencies, and I believe it will become a key pillar of most technologies in the next century.

--- Tim Sweeney, CEO of Epic Games

In the past decade, perhaps the most powerful cryptographic technology has been the universal and succinct zero knowledge proof.

--- Vitalik Buterin, Co-founder of Ethereum

The two most powerful applications of zero knowledge proofs (ZKP) are: scalability and privacy security.

Scalability: Through zero knowledge proofs, many data points can be encapsulated in a lightweight proof, greatly improving efficiency and scalability. Since most blockchains require significant computational power, blockchain technology is still limited by such infrastructure, which restricts its scalability. By leveraging zero knowledge proofs, developers can design lightweight DApps that can run on more common hardware (such as mobile devices), paving the way for a more accessible and scalable Web3 future.

Privacy Security: Through zero knowledge proofs, users can securely share necessary information about goods or services to gain access without disclosing personal details that could expose them to hacking, deprivation, or identity theft. The data privacy features of zero knowledge proofs are particularly important for the security and protection of Web3, which includes DeFi, DAOs, and the metaverse. For a privacy-secure, user-sovereign Web3, as the connection between the digital realm and the real world becomes increasingly tight, zero knowledge proof technology will become even more crucial.

Given the growing interest in zero knowledge proofs and the desire to achieve privacy security and user sovereignty in Web3, the Mina Foundation conducted a survey in 2022 to better understand the development prospects of ZKP.

Theoretical Approach

The content of this report is based on the results of a survey created, distributed, and analyzed by members of the Mina Foundation. The Mina Foundation designed several questions aimed at summarizing the industry's overall views on zero knowledge (ZK).

The survey was disseminated through social media and community channels operated by members of the Mina ecosystem and key opinion leaders in the industry, who showed a strong interest in exploring ZK with their audiences. The survey lasted for three weeks and had 1,978 participants*.

According to the Mina Foundation, this sample collected the views and opinions of over 1% of Web3 developers in the field. According to the Electric Capital 2021 report, there are a total of 18,416 Web3 developers globally, and this report surveyed approximately 218 developers.

Survey Participants

Participants were asked three questions to assess the diversity of the sample.

1. What is your identity as a survey participant?

Participants were asked to select the identity that best represents them from among crypto community members, crypto traders, and developers. The results showed that 67% identified as crypto traders, 22% as crypto community members, and 11% as developers.

2. What is your age?

86% of respondents were aged between 19 and 45.

3. Are you familiar with zero knowledge proof technology (ZKP)?

75.8% of respondents stated they had at least heard of ZKP and knew its meaning, while 24.2% did not know what it meant. Additionally, 80% of developers indicated familiarity with ZKP technology, showing the motivation for developers to use ZKP in their work. Based on the demographic data of the survey participants, the report reflects the overall sentiment towards ZKP from the perspective of general crypto traders and the crypto community in Q1 2022.

Main Findings

Zero knowledge proofs are critical in the following areas:

• Metaverse and Web3: 42.2% of respondents believe zero knowledge proofs are very important for the future of the metaverse and Web3.
• Cryptocurrency Preference: 90.1% of respondents find cryptocurrencies utilizing zero knowledge proof technology more attractive.
• Financial Industry: 40.6% of respondents believe the financial industry is the most in need of zero knowledge proofs.
• Privacy Protection: 30.7% of respondents consider privacy security the main advantage of zero knowledge proofs.

Survey Results

What do you think are the main advantages of zero knowledge proofs?

When asked about the main advantages of ZKP in applications, 46% of respondents cited privacy and scalability; however, between privacy and scalability, privacy received slightly more responses at 30.7%, while scalability was at 18.2%. This slight preference for privacy over scalability may reflect the increasing concern for privacy in the cryptocurrency industry, possibly due to growing awareness of centralization and corporate involvement in the metaverse.

In fact, a recent survey by NordVPN indicated that 87% of respondents expressed concerns about their privacy in the metaverse. Interestingly, so far, most other ZK-based solutions have focused on scalability rather than privacy security.

Are cryptocurrencies that use zero knowledge proof technology more attractive?

90% of survey participants overwhelmingly believe that cryptocurrencies using ZKP are more attractive than those that do not. This may reflect a growing concern for privacy issues, especially around the rise of the metaverse. Similarly, the 2022 Messari Crypto report predicts that "in the future, all cryptocurrencies will move towards zero knowledge encryption."

If you know a DApp has privacy security or scalability features through ZKP, would you be more willing to use it?

When asked if they would be more willing to use a DApp with ZKP advantages, 52.1% of respondents indicated they would prefer to use a DApp with ZKP advantages. This may suggest that members of the crypto community believe in the privacy and security benefits of ZKP, especially considering recent blockchain security breaches, with 1.2 billion dollars stolen just in Q1 2022.

How important is ZKP in Web3 and the metaverse?

42.2% of respondents indicated that ZKP is of utmost importance in the metaverse and Web3, with 77.7% giving it a score of 8 or above in terms of importance. Given the high interest of major companies like Epic, Roblox, Microsoft, and Meta (formerly Facebook) in the metaverse, this data reflects the growing concern of the crypto community regarding control over metaverse companies.

A recent study by NordVPN revealed that 47% of internet users do not trust that their identity information will be protected. If users cannot control their identity and data in the metaverse, their data is likely to be exploited, further highlighting the concerns of more users as they enter the metaverse.

Which industry would benefit the most from the integration of zero knowledge proofs?

The final results showed that survey participants believe all industries, including finance (40.6%), healthcare (11.7%), social media (5.0%), e-commerce (2.9%), gaming & entertainment (2.3%), and collectibles (2.0%), would benefit from zero knowledge proofs, but respondents were most interested in utilizing zero knowledge proofs as financial solutions.

With the growth of decentralized finance (DeFi) usage, zero knowledge applications with advantages in scalability and privacy security will have more opportunities to increase widespread adoption in the industry.

What type of data do you most want to keep confidential?

Participants expressed that keeping all personal identity information confidential is very important, but they emphasized the security of financial data, which may include users' social security numbers, cryptocurrency balances, net worth, credit scores, etc.

For example, creating a DApp using ZKP, where users only need to share proof of a credit score above 700 to obtain a loan without leaking other private information. The importance of maintaining financial data privacy means that ZKP will play a key role in the future of Web3 and DeFi.

How concerned are you about entities accessing your personal data?

Respondents expressed the greatest concern about the government accessing their personal data through any other entity. Interestingly, respondents expressed relatively high concern across all types of entities. Compared to banks, social media platforms, and third-party companies, concerns about wallets were the lowest.

This is evident from various data breaches and hacks occurring in DeFi, financial institutions, social media platforms, and government entities.

Conclusion

The sentiments captured in this report indicate that an increasing number of members of the crypto community are seeking to address some of the biggest challenges facing blockchain through zero knowledge: privacy security and scalability issues.

These findings particularly emphasize the importance of privacy security, as if we cannot achieve a secure and user-sovereign Web3, user data is at significant risk of exploitation. Joseph Johnson's Global Online Privacy Report points out that 53% of internet users are more concerned about their online privacy security than they were a year ago. As concerns continue to grow and Web3 evolves, more users will place greater importance on the advantages of ZKP in privacy.

From the perspectives of development and trading, an increasing number of developers and crypto users are also more focused on ZKP than ever before. This attention may be more reflected in the launch of DApps that utilize ZKP technology to achieve privacy security, scalability, or both in the short term. In fact, Coinbase's Chief Product Officer Surojit Chatterjee wrote in his article "Predictions for 2022" that this year, use cases centered around scalability and privacy will see "greater appeal for zero knowledge proof technology."

The survey results in this report show that over 54% of crypto users consider financial privacy security to be the most important, indicating that DeFi is an urgent use case for ZKP. This is particularly important, as highlighted by a recent report from Chainanalysis, due to the increasing number of DeFi hacks. If DeFi is to fulfill its promise of giving users control over the value of their assets, it needs to achieve secure, privacy-protecting data sharing through ZKP.

Once the implementation of ZKP becomes the norm, we can also expect traditional finance to increasingly engage with DeFi, as private finance empowered by ZKP is more attractive than traditional corporate finance.

Overall, members of the crypto community express a consensus that zero knowledge proofs will play an important role in ensuring the future of DeFi, Web3, and the metaverse. We look forward to seeing a secure, privacy-protected Web3 become a reality for everyone as the industry makes widespread advancements in zero knowledge technology.