The Boomerang protocol: A Decentralised Privacy-Preserving Verifiable Incentive Protocol (2401.01353v3)

Abstract: In the era of data-driven economies, incentive systems and loyalty programs, have become ubiquitous in various sectors, including advertising, retail, travel, and financial services. While these systems offer advantages for both users and companies, they necessitate the transfer and analysis of substantial amounts of sensitive data. Privacy concerns have become increasingly pertinent, necessitating the development of privacy-preserving incentive protocols. Despite the rising demand for secure and decentralised systems, the existing landscape lacks a comprehensive solution. In this work, we propose the BOOMERANG protocol, a novel decentralised privacy-preserving incentive protocol that leverages cryptographic black box accumulators to securely and privately store user interactions within the incentive system. Moreover, the protocol employs zero-knowledge proofs to transparently compute rewards for users, ensuring verifiability while preserving their privacy. To further enhance public verifiability and transparency, we utilise a smart contract on a Layer 1 blockchain to verify these zero-knowledge proofs. The careful combination of black box accumulators and zero-knowledge proofs makes the BOOMERANG protocol highly efficient.

• The paper presents a decentralized protocol that employs cryptographic accumulators and zero-knowledge proofs to securely compute user incentives.
• It demonstrates high scalability, supporting up to 23.6 million users daily on a single-threaded server and 15.5 million on Solana with minimal costs.
• The integration of smart contracts ensures public verifiability, highlighting its potential for privacy-enhanced applications in advertising, loyalty, and data management.

Analysis of the \protocolname Protocol: A Decentralised Privacy-Preserving Verifiable Incentive Protocol

The \protocolname protocol represents an intriguing development in the field of privacy-preserving incentive mechanisms. As industries leverage increasingly data-driven business models, the tension between customization and user privacy intensifies. The introduction of a protocol like \protocolname not only addresses these growing privacy concerns but also aims to provide robust verification in a decentralized manner.

Key Contributions

The authors propose a decentralised privacy-preserving verifiable incentive protocol that employs cryptographic black box accumulators and zero-knowledge proofs (ZKPs) to manage and validate interactions within incentive systems. By using BulletProofs, the protocol offers a transparent and verifiable means for computing user rewards without compromising on privacy.

Several technical aspects contribute to its efficacy:

• Cryptographic Accumulators: These are employed to encapsulate user interactions within the incentive system. Accumulators allow for the maintenance of an interaction state without revealing the specifics of the interactions to any involved parties.
• Zero-Knowledge Proofs and BulletProofs: Zero-knowledge proofs ensure that the computation of rewards is verifiable without revealing details about the user's interactions or personal data. The use of elliptic curves and BulletProofs enhances the efficiency of the protocol, minimizing the computational load during the verification process.
• Smart Contracts on a Layer 1 Blockchain: These smart contracts reinforce public verifiability by performing proof verification on-chain, providing transparency to all stakeholders while maintaining economic incentives for participants.

Numerical Results

The implementation of the \protocolname protocol demonstrates significant scalability. On a single-threaded backend server, it can handle up to 23.6 million users daily, with operating costs as low as 2 USD. Meanwhile, on the Solana blockchain, the daily handling capacity is estimated at 15.5 million users, with a cost of approximately 0.00011 USD per user. These metrics indicate the protocol's capability to support large-scale incentive systems economically.

Implications and Future Directions

The \protocolname protocol holds broad applicability across various sectors, such as personalized advertising, loyalty programs, market research, and health data management. Its design inherently supports privacy-enhanced data collection, allowing businesses to gather insights without compromising user anonymity.

From a theoretical perspective, the \protocolname protocol introduces a framework that could be extended with emerging cryptographic techniques, such as succinct non-interactive arguments of knowledge (SNARKs) or blockchain scaling solutions like rollups. Further research could explore optimizations in proof generation and verification processes or adaptations that leverage other blockchain environments beyond Solana to expand flexibility and reduce costs further.

Conclusion

The \protocolname protocol offers a sophisticated solution for privacy-preserving incentive systems by integrating advanced cryptographic techniques with a decentralised structure. As data privacy continues to garner attention in the digital economy, protocols like \protocolname provide a promising path toward reconciling user privacy with data-driven business needs. Its potential impact across industries and areas where sensitive data is paramount underscores its relevance and provides fertile ground for future exploration and enhancement in decentralized privacy technologies.