Aztec: everything you need to know about AZTEC

What is Aztec?

Aztec is a privacy-focused Layer-2 on Ethereum. The network is designed to keep transactions and smart contract interactions secure at the Ethereum level without making all details publicly available by default.

On Ethereum, virtually everything is transparent: who trades with whom, which amounts move, and what positions someone holds. That is useful for verifiability, but not always pleasant or desirable. Aztec is built for situations where you do want to work on-chain, but not make everything public.

Aztec is not “a privacy tool on top of Ethereum,” but its own Layer-2 network. You use it via applications that run on Aztec, similar to how you use other Layer-2s. With Aztec, however, privacy is emphasized as a standard part of how transactions are processed.

How does Aztec work?

Aztec works as a zk-rollup. That means that transactions are first processed on Aztec itself and then recorded on Ethereum in summarized form. Ethereum remains the layer that ultimately provides security and finality.

The privacy aspect comes from zero-knowledge proofs: you can prove that a transaction is valid according to the rules without having to make all the transaction details public. The blockchain can thus verify that everything has been done correctly, while sensitive information can remain hidden.

A second important component is sequencing: the order in which transactions are included. While many rollups (especially in the early phase) operate with a single central sequencer, Aztec is set up with a decentralized sequencer network. That helps to be less dependent on a single party for “making blocks” on Layer-2.

The AZTEC token

AZTEC is the token of the Aztec Network. The token exists as an ERC-20 on Ethereum and is used to run and secure the network.

The role of AZTEC in practice revolves around three things:

1. Fees
   Users can pay transaction fees on Aztec. AZTEC is one of the tokens that can be used for this.
2. Staking and network security
   Aztec uses a proof-of-stake model for block building. Operators can stake AZTEC to participate as sequencers. In doing so, staking helps secure the network and order transactions.
3. Governance
   Aztec is set up as a network in which upgrades and major changes occur via governance. In practice, voting power is linked to participation as a sequencer and staking of AZTEC.

The technology behind Aztec

Aztec combines three technical building blocks that together enable privacy on a Layer-2.

Zero-knowledge proofs form the foundation. These proofs ensure that Aztec can demonstrate that transactions have been executed correctly while details can remain hidden.

In addition, Aztec operates with its own private execution flow. Part of the proof generation takes place on the client side, so sensitive data doesn’t have to be sent to a central server before a proof is created. This aligns with the network’s goal: privacy without having to rely on a trusted intermediary for privacy.

Finally, there is the network layer: sequencing, validation and publishing results to Ethereum. Rather than simply chasing speed, the design is primarily focused on reliable processing.

The Aztec ecosystem

Aztec is primarily an infrastructure layer. The ecosystem therefore consists of builders and operators around the network, such as:

• Privacy-focused DeFi apps
• Tools for private identity and access
• Sequencers and provers that keep the network operational

What you as a user mainly notice is that Aztec is designed as a foundation for applications where privacy is part of the design, not a standalone extra feature.

Benefits of Aztec

• Privacy as a standard component of an Ethereum Layer-2
• Processing via zk-rollup: scalability with Ethereum as a security layer
• Path to decentralization via a sequencer network instead of a single central sequencer

Disadvantages of Aztec

• Privacy technology makes the system more complex than a standard rollup
• User experience depends heavily on which apps are available and how well they implement privacy
• The network and ecosystem still have to prove themselves in practice at scale (adoption, tooling, stability)

Who are the founders of Aztec?

The most well-known faces behind Aztec are Zac Williamson and Joe Andrews. In the early development, Arnaud Schenk and Tom Walton-Pocock also played an important role. Today the network is supported by Aztec Labs and a broader team focused on rolling out a privacy-first Layer-2 on Ethereum.