Horizen is a privacy-centered blockchain scalability platform.
In this definition...
What does Horizon do?
Horizen uses sidechains to scale its network. This network uses the proof of work consensus mechanism to secure its mainnet; the sidechains, however, are free to use whatever consensus mechanism they choose. As a result, Horizen can run hundreds of independent blockchains while giving them the freedom to choose their speed, privacy, and consensus algorithm.
Horizen boasts of a platform for building a network of interoperable blockchains with a total network speed of up to 10 million transactions per second (TPS). Keep reading to see how this network has managed to set itself apart in the scalability industry.
Company History
On May 30, 2017, Horizen was launched under the name ZenCash. ZenCash itself was forked from ZClassic at block height 110,000. The ZenCash project set out with the aim of building a privacy-oriented blockchain based on zero-knowledge proof technologies.
As the project grew bigger, it often found itself confused with another blockchain project called Zcash. The word “cash” in the project’s name also didn’t accurately represent the project’s vision. It was presenting the project as merely a cryptocurrency and yet it was focusing on products like a treasury voting system and sidechains with smart contracting capability.
In August 2018, Zencash made a rebrand to the name Horizen. This rebrand set the stage for the project’s shift from a privacy cryptocurrency to a privacy-centered scalability platform.
On December 2, 2021, the Zendoo protocol was launched on the mainnet. This launch marked Horizen’s transition from a privacy-focused cryptocurrency to a zk-SNARK enabled cross-chain platform.
What is Zendoo?
Horizen uses a zero-knowledge-enabled cross-chain protocol called Zendoo as its sidechain solution. Zendoo allows developers and businesses to build private or public blockchains with the flexibility to determine their speed, consensus, and privacy. This gives the blockchains the ability to scale flexibly.
The Zendoo platform can support up to 10,000 blockchains running in parallel, each with a throughput of 1,000 TPS. This means that Horizen can reach a (theoretical) total network throughput of 10 million TPS. This massive speed can be attributed to Horizen’s multi-tiered decentralized network of nodes that consists of more than 40,000 nodes. This arguably makes it the biggest network of blockchains in the industry.
Zendoo uses zk-SNARK proofs to enable private communication with the network of blockchains. Zk-SNARKs enable one party (verifier) to prove that another party (prover) has knowledge of a certain piece of information that they claim to have. In this case, they enable the Horizen mainnet to verify the state of its sidechains without them revealing their data.
zk-SNARK stands for zero-knowledge Succinct Non-interactive Argument of Knowledge. Breaking this concept down:
Zero-knowledge because the prover of the information does not disclose it to the verifier. Succinct because the proof needs to be brief compared to the actual data.
Non-interactive because there’s no constant interaction between prover and verifier. There’s only a proof that is sent at one point in time.
Argument of Knowledge because the prover needs to prove that they have the knowledge (witness) and that it’s sound to assume the prover did not cheat. For that matter, the probability of cheating needs to be very low.
Tokenomics
The Horizen mainchain is also secured by an improved proof-of-work consensus mechanism with enhanced protection against 51% attacks. It has an inflationary emission with a maximum supply of 21,00,000 tokens (similar to Bitcoin).
The network uses ZEN as its native token, which is used for transactions on the mainnet and to also reward different nodes. The network has three types of nodes.
- Regular Full Nodes – These are the standard nodes. They are not incentivized
- Secure Nodes – These have more functionality than the regular ones. They are mainly to secure the network and are incentivized with 10% of the block reward
- Super Nodes – These have more functionality than secure nodes. They are mainly to ensure scalability through sidechains and are incentivized with 10% of the block reward
The Scalability Trilemma
Scalability usually comes at either the cost of decentralization or security, a problem commonly referred to as the scalability trilemma.
If a blockchain network is centralized, this normally comes at the cost of security and transparency. The benefits of scaling at the cost of decentralization may seem rewarding at first, but in the long run, they prove to be hurtful to the network.
Solana is one case of this. In 2021, Solana was arguably the hottest Ethereum killer in the industry, providing very low gas costs (a fraction of a cent) and an overall network speed of upto 65,000 TPS. This massive ability to scale saw the network’s native token (SOL) soar by more than 13,000% from Jan 1st to September 9th, 2021.
On September 14, 2021, Solana saw a network outage which left the network down for 17 hours. The price of SOL dropped by almost 15% during the outage, thereby shedding more than 1800% of the token’s initial meteoric rise. The cause was a denial of service attack which caused many validators to crash.
Unfortunately, the September attack wasn’t the last one. The network has seen 2 more failures since then, with the latest being on 4th January, 2022. This latest attack was a suspected DDoS attack.
According to Messari research, Solana has about 48% of its nodes controlled by the inner circle. This goes to show you that Solana isn’t truly decentralized as it claims to be.
Solana’s high centralization makes it easy for an attacker to target a few nodes and still be able to bring network activities to a halt. Additionally, if the top wallets decided to act maliciously, they could easily succeed in a 51% attack.
Cardano, however, has about 80% of its token in the public’s circulation. This means more decentralization in the token’s voting power and more security.
If a blockchain chooses to prioritize decentralization and security instead, then network speeds are bound to be compromised. This can be seen with Cardano averaging 250 TPS. By comparison with other blockchains like Ethereum & Bitcoin, this is actually a very good throughput. However, if you are to compare this with other scalability platforms like Solana & Horizen, then this is a small throughput.
As of this writing, Cardano is working on a scalability solution called Orbis. Orbis is based on zk-rollups – the same technology that Horizen uses in its scalability solution. This protocol will allow the network to scale and provide more support for building DeFi applications on it.
How does Horizen measure up to the scalability trilemma?
Horizen allows scalability through the creation of independent interoperable blockchains. The network can flexibly scale up to 10,000 blockchains. It is able to maintain security through the use of zk-SNARKs to enforce cross-chain verification while still preserving the privacy of the sidechains.
Horizen is also able to keep decentralization through its vast network of multi-tiered nodes, consisting of over 40,000 nodes as of this writing. This makes it the largest node network, dwarfing other big players in the industry like Solana (<2,000 validators).
At the moment, Horizen has somewhat managed to gain a balance between scalability, security and decentralization. There haven’t been any issues relating to security or centralization challenges (so far).
Is Horizen secure?
At the moment, the Horizen network is being securely protected by the ZK-SNARKS. However, as with most blockchain technologies, ZK-SNARKS face the looming threat of quantum attacks. Quantum computing is still in its infancy but in a few years should be able to pose a real threat to blockchains technologies that aren’t quantum resistant.
A number of blockchains are turning to zero-knowledge proofs as their security solution as they scale. Ethereum itself already has one called zk-Sync on its mainnet. Cardano is developing one. One common thing with all these zk-rollups is that they use ZK-SNARKS.
As mentioned earlier, ZK-SNARKS aren’t quantum resistant. ZK-SNARKS are, however, not the only zero-knowledge proof technology that developers can use as they solve the security challenge. ZK-STARKS are another zk-rollup that can be used. zk-STARK stands for zero-knowledge scalable transparent argument of knowledge.
Unlike ZK-SNARKS, the ZK-STARK technology is quantum resistant. If using zero-knowledge proofs is supposed to stay a sustainable solution, then developers need to begin actively building support for ZK-STARKS or how to better ZK-SNARKS.
