Immense R&D effort over the last decade has led to greatly improved theoretical and engineering performance of ZK mechanisms. But it also means we have a glut of infrastructure whose only current use is compressing rollups. This presentation covers further applications that could provide tangible benefits to users. Mechanisms that cannot provide a tangible benefit without ZK/FHE/MPC are the most valuable for this cause.
Optimal Pricing and Auditability
ZK mechanisms can be used to provide provably optimal pricing, allowing users to confirm that prices are not unfairly distorted by other participants. Further, we also consider potential application of auditability, which allows users to also identify why prices deviated from optimal, if such a deviation occured.
Rollups are an example of a compression mechanism in widespread use today, but compression can also be applied to other cases like auctions and protocol design. Generalized Compression allows users to certify that transitions made by other participants (e.g. paymasters, MEV searchers, mechanism operators) meet the covenants they specify. We consider how to combining ZK mechanisms with smoothing can help achieve the goals of minimizing user preference specification while maximizing revenue for operators.