Ethereum researchers are working on ways to deploy a protocol they first introduced earlier this year, which could supercharge privacy with zero-knowledge proofs.

Ethereum developer Artem Chystiakov shared his research on the Ethereum community forum on Monday, titled “Zero Knowledge Secret Santa (ZKSS),” which proposes a three-step “Secret Santa” algorithm. The paper was first introduced in January on arXiv. 

Secret Santa is a popular gift-giving game played around Christmastime, in which a group of people exchange gifts anonymously. Each person buys a gift for another person as their “Secret Santa” and also receives a gift from their “Secret Santa.” 

Recipients of the gifts never learn who their Secret Santa is. 

Challenges with playing on Ethereum 

Chystiakov said there are three main hurdles to playing Secret Santa on Ethereum, which this protocol could solve.

Everything on Ethereum is visible to everyone, so there needs to be a way to hide who’s giving to whom and maintain privacy. 

Blockchains don’t have true randomness, so participants must contribute their own random choices, and the game must be designed to prevent anyone from participating twice or giving a gift to themselves.

Potential use cases for Ethereum

Blockchain privacy has become a hot topic recently as crypto becomes increasingly integrated into traditional finance. 

Privacy protocols could be applied to scenarios such as anonymous voting and governance, including DAOs or organizations, where users need to prove they’re a member and cast one vote, but keep their choice private. 

It could also apply to whistleblower systems, where users need to prove they’re an authorized employee while submitting information anonymously, or to private airdrops or allocations, where tokens need to be distributed without revealing who received what.

When asked about open-source implementations or deployment, Chystiakov said, “We’re working on it.” 

How Zero Knowledge Secret Santa works

The proof-of-concept Solidity protocol uses zero-knowledge proofs to establish gift sender and receiver relations while maintaining the sender’s privacy and confidentiality. 

ZK-proofs are a cryptographic method for proving knowledge without revealing the specific information. The ZKSS protocol also utilizes a transaction relayer, which acts as a middleman that submits transactions, thereby keeping the sender’s identity hidden.

Related: Retail vs. whales: Who actually drives the Santa rally? 

To participate, participants register their Ethereum addresses in a smart contract, creating a list of all participants. Then, each participant commits to using a specific digital signature. 

This prevents a cheating attack where someone could participate multiple times by creating different signatures.

Each participant then secretly adds their random number to a shared list using the relayer, so no one knows who added what. This allows receivers to encrypt their delivery address, so only their assigned “Santa” can read it.

Finally, each participant selects someone else’s random number from the shared list, after which the identity of the receiver is revealed. 

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