Aztec, a privacy-focused layer-2 rollup, announced the launch of its testnet on Thursday. The team has been developing this technology for over eight years, bringing it closer to the main network. This launch coincides with increasing interest in privacy solutions from institutions needing transaction confidentiality.
Aztec distinguishes itself by prioritizing data privacy through protocol-level encryption. According to co-founder Zac Williamson, sensitive information is published on their blockchain in encrypted form. This approach differs from other zero-knowledge rollups.
Layer-2 networks have emerged as faster and cheaper alternatives to Ethereum transactions. However, Aztec prioritizes privacy and decentralization, potentially sacrificing some scalability. The unique value proposition of Aztec is not scalability, but privacy.
Institutions have long sought privacy-preserving tools for managing sensitive transaction data on public ledgers. In 2022, Aztec raised $100 million in a Series B round led by Paradigm. Recently, Miden, another privacy solution, raised $25 million in initial funding from a16z on Tuesday, highlighting the resurgence of privacy tools in the blockchain sector.