Vitalik questions Rollup, can Aztec stand out with controllable privacy?

Feb 12, 2026 18:46:21

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CoinW Research Institute

Summary

Aztec is a privacy-first zkRollup built on Ethereum, not solely aiming for scalability, but attempting to establish a "default privacy, verifiable execution" smart contract system. Through a combination of private execution and on-chain verification architecture, along with the Noir language designed specifically for zero-knowledge development, Aztec aims to create a complete ecosystem of privacy-native applications. The project has completed multiple rounds of financing from top-tier institutions and has clarified network incentives and community participation mechanisms in its token economic model. Compared to the performance competition route of mainstream L2s, Aztec has chosen a differentiated direction of privacy execution, which has strong uniqueness within the Ethereum ecosystem. However, its long-term value still depends on whether privacy needs become mainstream, as well as the evolution of key variables such as regulation, technical performance, and ecological expansion.

1. Why has Aztec recently attracted market attention?

Market Outlook: Structural Recovery of Privacy Narrative

In recent years, with tightening regulations and exchanges' caution towards anonymous protocols, the privacy sector has noticeably cooled down. Many privacy projects have been marginalized, and "privacy" was once viewed as a high-risk narrative. However, the environment is changing. With the upgrade of on-chain applications, privacy is beginning to return to the center of discussion in new ways. AI Agents make automated strategies possible, and automated execution means that transaction logic and data cannot be fully public; RWA and institutional entry also require a "verifiable but not overly transparent" model; assets must be real, but business details do not need to be fully exposed. Meanwhile, technologies like zkEVM and zkVM are gradually maturing, making verifiable but invisible computation more feasible. Privacy is no longer just an anonymous transfer tool, but more like a new infrastructure capability. The warming of Aztec reflects this structural change.

Team Background and Credibility

Aztec initially launched Aztec Connect to explore privacy DeFi but later voluntarily shut down the product to focus on building a "privacy-native Rollup." This adjustment sparked controversy at the time but also demonstrated the team's willingness to make sacrifices for a long-term technical path rather than maintaining a short-term narrative. Subsequently, Aztec clearly focused on a default privacy zk Rollup architecture and launched the Noir programming language for zero-knowledge development, gradually building a complete privacy smart contract system.

The founding team member Zac Williamson has long been engaged in zero-knowledge proof and cryptography research and is one of the early contributors to the PLONK universal proof system. The Aztec team has been continuously deepening ZK technology for years, from privacy asset protocols to Rollup architecture and then to Noir language development, with a consistent focus on verifiable privacy computation. Even during the low period of the privacy sector, the team did not stop research and development but actively transformed and restructured product direction. This continuous investment and technical background make Aztec more like a long-term infrastructure project rather than a short-term hotspot that fluctuates with market cycles.

Capital Strength

In December 2021, Aztec completed approximately $17 million in Series A financing, led by Paradigm, with participation from a_capital, Variant, Nascient, and industry-renowned investors like Vitalik Buterin. In December 2022, during a generally sluggish market phase, Aztec completed $100 million in Series B financing, led by a16z crypto, with participation from AC Capital, King River, and others, bringing the total financing to over $119 million. Both a16z and Paradigm are top-tier institutions with a long-term layout in crypto infrastructure, leaning towards long-term bets on technology and underlying architecture rather than short-term narrative trading. Completing a large financing round at the end of the 2022 bear market itself is a signal: capital values Aztec's technical path and long-term potential rather than the prevailing market sentiment at that time.

Aztec's current attention is driven by multiple factors: the team's long-term accumulation in the ZK field, a clear product restructuring path, and continued support from leading capital. Capital and market attention precede, while the actual ecological scale is still under construction.

2. Aztec's Core Positioning: What is it Building?

Not just Layer 2, but a Privacy Execution Layer

Aztec is not an independent Layer 1 public chain, but a zkRollup second-layer network built on Ethereum. All transaction results and zero-knowledge proofs will ultimately be submitted to the Ethereum mainnet for verification, so security still derives from Ethereum. However, understanding it merely as another L2 is inaccurate. Most second-layer networks address performance issues, such as reducing gas costs and increasing transaction speed. Aztec attempts to solve the structural problem of blockchain's default complete transparency.

On Ethereum, account balances, transaction records, and contract call logic are all public. This transparency ensures verifiability but limits the implementation of many real-world scenarios. Institutional strategies cannot be hidden, on-chain bidding is difficult to keep confidential, and future AI automated execution algorithms will also expose details. Real-world business activities do not operate in a completely open environment. Aztec's starting point is to allow blockchain to maintain verifiability while having reasonable privacy boundaries.

Technical Core: Private Execution, On-Chain Verification

The underlying logic of Aztec can be summarized as: private execution, public verification. Users complete transactions or contract calls locally and generate zero-knowledge proofs. What is verified on-chain is "whether this complies with the rules," not "what exactly was done." The network confirms the correctness of the computation but does not need to see amounts, data, or execution details. This differs from traditional Rollups. Ordinary L2s simply compress transactions for submission; fundamentally, the data remains public. Aztec changes the execution model itself, allowing states to be private while execution remains trustworthy. This structure is referred to as "verifiable but invisible." It does not eliminate transparency but shifts it from the data layer to the proof layer.

Privacy Smart Contracts and Noir Ecosystem

Aztec's goal is not just privacy transfers but also to support "privacy smart contracts." On traditional public chains, contract states are publicly visible by default. On Aztec, contracts can have private states and private logic while interacting with the public world when necessary. Developers can decide which information to make public and which to keep confidential, thus forming an application structure of "controllable transparency." To enable this model to be truly developable, Aztec has launched the Noir programming language for zero-knowledge applications. Zero-knowledge development is inherently complex, and Noir attempts to engineer this complexity, allowing developers to build privacy applications in a manner closer to conventional programming. Aztec is not just building a network; it is establishing a complete privacy-native execution system, including execution environments, proof mechanisms, and development toolchains.

3. Economic Model and Long-Term Value

Current Token Information: Total Supply, Distribution, and Issuance Mechanism

According to the Aztec white paper, the genesis total supply of AZTEC is 10.35 billion tokens, distributed according to different roles and uses. Overall, the tokens will be allocated to various groups, including investors, core teams, foundations, ecological construction, and community participants. Approximately 21.96% (about 2.273 billion tokens) is allocated for token sales, including public auctions and genesis node sales. This portion is primarily used for early price discovery and participation incentives during the network launch phase.

Structurally, the distribution logic of AZTEC revolves around several core directions: part of it is used to reward early investors and supporters, part for long-term team incentives, the foundation is responsible for protocol development and governance support, and ecological subsidies are used to attract developers and application implementation; additionally, there are dedicated network reward mechanisms (Y1 Network Rewards) and reserves for liquidity and future incentives. This Tokenomics not only considers early capital support but also reserves a large proportion for subsequent network operation and ecological expansion, leaning more towards a long-term infrastructure project distribution structure.

Value Capture Logic of Privacy L2: How Tokens Will Function

The functional design of AZTEC mainly includes the following categories:

(1) Network security and staking incentives. AZTEC tokens are expected to be used for staking by network participants (referred to as Sequencers or ordering nodes) to maintain network stability and decentralized security. Token holders can choose to run nodes or delegate tokens to earn rewards, a mechanism similar to other PoS/staking systems.

(2) Governance power: AZTEC holders will be able to participate in network governance, including protocol upgrades, parameter adjustments, and ecological resource allocation. This makes the token not only a value carrier but also a tool for community decision-making.

(3) Fee payment and execution incentives: In the future, if Aztec's smart contract execution environment is enabled, tokens may be used to pay transaction or execution fees and provide incentives to participants offering proof and ordering services.

From these designs, it can be seen that privacy capability becomes part of its value capture ability. Unlike ordinary L2s that mainly rely on scalability value, Aztec provides a technical foundation for real-world finance, institutional-level applications, or scenarios with high privacy requirements through the "privacy," "selective disclosure," and "controllable transparency" models. Theoretically, this aligns its network fee structure and token demand more closely with high-value on-chain activities.

4. Token Sale and TGE: Fair Auction & Community Voting

Public Token Sale Using CCA Mechanism

Aztec's public token sale adopts the Continuous Clearing Auction (CCA) mechanism, co-developed with Uniswap Labs, which is currently the first on-chain attempt to fully utilize CCA for token issuance. The design purpose of the CCA mechanism is to allow market participants to self-price and bid on-chain in a transparent and fair manner, avoiding issues like front-running, gas wars, and monopolized distribution in traditional sales. The entire auction process is fully verifiable on-chain, neutral, and transparent, facilitating genuine market price discovery.

The public auction will take place from December 2 to December 6, 2025, attracting over 16,700 participants, selling tokens worth approximately 19,476 ETH (about $61 million), and ultimately allocating about 14.95% of the total supply of AZTEC. Participants include not only ordinary community users but also testnet node operators, early ecological contributors, and ETH stakers. The project set a maximum bid limit per person during the auction to prevent excessive concentration by large holders and increase opportunities for ordinary users. After the auction, initial liquidity was automatically matched for Uniswap v4's liquidity pool, including about 273 million AZTEC tokens (approximately 2.6% of the supply) for trading pair launch, which will provide foundational support for future secondary market trading.

Community Voting Initiates TGE

After the auction, a large number of AZTEC tokens obtained through bidding, node sales, and rewards remain locked until the Token Generation Event (TGE) is triggered. According to the official announcement, this TGE has been approved in community governance voting, with the date set for February 12, 2026 (Beijing time), at which point users who participated in the token sale can freely transfer and trade their AZTEC tokens.

This arrangement reflects Aztec's governance logic: the final free circulation of tokens is not unilaterally decided by the team but collectively determined by users participating in the sale through on-chain governance voting. The successful triggering of the TGE marks Aztec's entry into a new phase of token economy initiation and signifies that the community will begin to genuinely participate in network governance and future power distribution.

Aztec's token sale and unlocking mechanism combine fair price discovery methods, extensive community participation, and on-chain governance mechanisms, laying a more open and decentralized foundation for its long-term value formation.

5. Competitive Landscape

Differences from Mainstream L2s: Not Competing on Performance, but on Privacy

Current mainstream Ethereum second-layer networks, such as Starknet, zkSync, and Scroll, primarily aim for scalability, such as increasing throughput, reducing costs, and enhancing EVM compatibility. They address issues of slow chains and high transaction fees, with privacy not being a core selling point. Aztec is also based on zkRollup architecture, but its starting point is different. The official positioning is clear: it is a privacy-first zkRollup, meaning privacy is a default feature rather than an additional function. It supports private states and privacy smart contracts, emphasizing a verifiable but invisible execution model. Therefore, Aztec's relationship with mainstream L2s is not one of performance competition but of differentiated competition. Other projects are competing for the scalability market, while Aztec is attempting to establish a privacy execution layer.

Comparison with Other Privacy Projects: Technical Path and Ecological Integration

Within the privacy sector, Aztec occupies a unique position. Zcash represents payment-level privacy, focusing on hiding transaction amounts and addresses but does not support complex smart contracts. Secret Network achieves privacy contracts through TEE technology, but it is an independent Layer 1, requiring cross-chain bridges for integration with the Ethereum ecosystem. Projects like Zama, exploring more cutting-edge fully homomorphic encryption computing, are still in early stages. In contrast, Aztec's characteristics include: it is directly built on Ethereum, inheriting the security of the mainnet; it supports programmable privacy contracts, not just privacy transfers; and it creates a complete privacy development tool system through the Noir language. Within the current Ethereum ecosystem, Aztec is one of the most systematic projects advancing the direction of privacy smart contracts.

6. Potential Risks and Future Variables

Regulatory Risks: Will Privacy Be Restricted?

Privacy protocols have always been sensitive in the crypto industry. In recent years, some privacy tools have faced regulatory pressure, and the policy environment is not entirely friendly towards untraceable technologies. Aztec emphasizes default privacy, and while it is verifiable and not a completely anonymous black box, from a regulatory perspective, the privacy infrastructure itself may be a focal point of scrutiny. The uncertainty lies in whether regulation will allow this "controllable privacy." Will exchanges and institutions be willing to support privacy-oriented L2s? This will directly affect Aztec's development space.

Technical and Ecological Risks

Zero-knowledge proofs require computational resources. Compared to ordinary L2s, privacy execution is more complex, as users need to generate proofs locally, and this process is not cost-free. Additionally, the design of private states and the development threshold is higher. Although Noir reduces the difficulty of ZK programming, it is still a new language, and the ecological maturity will take time. If performance and experience cannot be continuously optimized, it may hinder large-scale adoption. Furthermore, Aztec follows a privacy-native route, while mainstream L2s already have mature EVM ecosystems and a large user base. Whether developers are willing to redesign applications for privacy is a practical issue. At the same time, technical competition is also accelerating. Higher-performance zkVMs, modular solutions, and even FHE technologies may bring substitution pressure.

Consideration: Will RWA Drive Demand for "Controllable Privacy"?

In addition to regulatory and technical risks, whether on-chain finance needs "controllable transparency" may also influence Aztec's long-term space. RWA is viewed as an important incremental direction for the next stage. However, unlike retail DeFi, the core participants in RWA are often institutions. Institutions typically involve a large amount of sensitive information in real transactions: counterparties, price terms, position structures, strategy arrangements, etc. If this information is fully public, it may weaken bargaining power and even affect market behavior itself.

Therefore, RWA does not pursue "complete anonymity," but rather leans towards selective disclosure under compliance premises. Assets must be real and verifiable; rules must be auditable; but business details do not need to be public to everyone. From this perspective, Aztec's emphasized "verifiable but invisible" model logically aligns with this demand. It does not provide black-box anonymity but rather a form of controllable transparency: public verification results while hiding sensitive data.

However, the reality also deserves calm observation. Currently, many RWA projects still choose permissioned chains, consortium chains, or off-chain custody rather than directly adopting public chain privacy layers. This indicates that there is indeed a privacy demand in RWA, but the acceptance of public chain privacy architecture is still in the exploratory stage. If the future trend is to open public chains and overlay compliant privacy execution, architectures like Aztec may encounter structural opportunities; if institutions prefer closed systems in the long term, the space for public chain privacy may be limited.