Introduction

When executing transactions on-chain, the user’s wallet details, like the address, total assets, and information about the trades, are usually open for the public to view. However, not everyone loves this feature, and certain parties prefer a certain level of privacy. This level of privacy is provided by Hinkal and its unique Zero-Knowledge privacy solution.

What Is The Hinkal Protocol?

Source: Official Website

The Hinkal Protocol is a platform built to conduct user transactions privately, ensuring transaction and user confidentiality. Built on the Ethereum network, the Hinkal Protocol makes use of ZK-SNARKS (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) to allow users to interact with decentralized applications (dApps) privately.

Furthermore, the platform uses stealth addresses, which are created before each transaction. These addresses allow the platform to execute transactions, pay for gas fees, calculate and balance the difference between the expected and actual cost of the transaction, and return it to the user’s hidden address.

For each transaction, ZK-SNARKS are generated for privacy by Hinkal for users. The proof from the ZK-SNARKS demonstrates that the user has the necessary funds needed for the transaction without disclosing the actual balance or further details. The generated proof is then transferred to the Ethereum network and validated without having to see the actual data, ensuring the user’s privacy.

History of The Hinkal Protocol

Hinkal was built in Stanford and is backed by major investors such as Draper Associates, SALT, Psalion, No Limit Holdings, PEER VC, Aquanow, Draper Dragon, NGC Ventures, Orange DAO, Web3.com Ventures, Quantstamp, Superblock, along with individual investors affiliated with Animoca, Menlo Ventures, and Bitfury. It is led by Co-founders Georgi Koreli and Nika Koreli, alongside Adam Zasada, the head of the ecosystem.

How Does the Hinkal Protocol Work?

Source: IQ.Wiki

The Hinkal Protocol comprises two Keypairs that ensure the smooth flow of operations within the platform. The first keypair is known as the viewing keypair, which is used to scan UTXOs and shows if the owner has a certain amount of tokens needed to execute the transaction. Once proven, the proof is generated along with the next key pair, known as the Spending key pair. The Spending key pair proves that the UTXO belongs to the owner, enabling the user to execute the transactions.

Furthermore, the platform makes use of commitments and Nullifiers. Commitment is a process by which users commit a certain amount of tokens without disclosing the details to other users, but they can disclose them whenever they choose. These commitments are used when users carry out trades on the platforms, like swaps, deposits, and transfers.

A nullifier is created by applying a one-way hash function to a commitment and a shielded private key. With this, the platform can prevent commitments from being reused whenever a transaction is carried out on the chain.

Features of Hinkal Protocol

Source: Official Website

The Hinkal Protocol comprises main features that are made available to ensure users have the best possible experience on the platform. Some of these features include:

Privacy

A major appeal of the protocol is its privacy; to enable that, the protocol is equipped with three levels of privacy to ensure full coverage. The levels include:

• Privacy For All Public Data: With public blockchains, user data is available for everyone. This exposes your wallet balance, transaction history, and other user wallets you have interacted with.

However, with Hinkal, users can store assets and execute transactions without the public knowing any details. Rather than have access to your records, the public only sees the Hinkal smart contract, making it impossible for accounts to be differentiated.

• Privacy For Counterparties: With public wallets, your name and other details may not be linked to your wallet address. However, the address is made available to whoever sends or receives assets from that address. The Hinkal Protocol prevents that by allowing users to send and receive tokens privately.

With Hinkal, users can send tokens to each other directly through the platform smart contract. This is possible through platform-generated public addresses, allowing users to send tokens without displaying their addresses. When receiving tokens, the addresses are discarded once the transaction is completed.

• Privacy Within Hinkal: On the platform, using Zero-Knowledge Proof ensures that users have the necessary assets needed to make the transaction without revealing their actual balance or identity.

Composability

The Hinkal protocol is also tasked with interoperability within the blockchain ecosystem, allowing platform users to interact with dApps that support WalletConnect, Swapping, Staking, Liquidity providing, and other cross-platform transactions with complete discretion.

Self-Custody

Users on the platform have full custody over their assets. The platform does not have access to user tokens or execute transactions on behalf of the user, and users can use their assets however they choose.

Deposits

The Hinkal protocol accepts deposits of ETH or ERC-20 tokens and allows users to deposit any amount they’d like. The deposits are then converted into token commitments of equal value and linked to the owner’s Hinkal public key.

Swaps

Hinkal Swaps lets users exchange ERC-20 tokens privately through relayers and APIs from Odos, Uniswap, and 1inch. Whenever a swap is initiated, a ZK proof is generated to confirm that the user meets the requirements for the exchange. Once confirmed, the swap is sent from the relayer’s address to the Hinkal Pool smart contract.

The swap is then executed using Odos, Uniswap, or 1inch’s smart contract. When the swap fails, the transaction is reversed, halting the creation of more commitments and nullifiers.

Yield Farming and Staking

HInkal Yield farming offers users the option of staking tokens to receive rewards. It also allows users to discreetly unstake their tokens and withdraw them through relayers. To earn rewards, they generate ZK-proofs to confirm eligibility for a certain amount of funds and send them to the relayers, which then execute the transaction.

Benefits of The Hinkal Protocol

The Hinkal Protocol was designed for users who want more privacy when transacting their favorite assets. It offers users certain advantages to users, including:

Enhance Transaction Privacy

With the Hinkal protocol, users get an added level of privacy with each transaction, whether they are sending or receiving assets. Users can hide details of their transactions, amounts, and wallet addresses from the eyes of the public.

Security

This is an important feature since the platform is able to protect the information of the user as well as their wallets from targeted attacks by fraudulent parties and hacks. This is possible through stealth wallet addresses and ZK-SNARKS, which ensure the transactions can not be traced to the users or organization.

Compliance

Users with over $1K worth of assets can verify their own CEX accounts without disclosing the data details to the Hinkal platform. This is possible through the Reclaim Protocol, which makes use of ZK-proofs to prove ownership.

To do this, the user must simply log into their CEX account and generate a ZK-proof. Once the proof is generated, Hinkal then verifies the proof to confirm the user is not on any sanctions list.

Hinkal Dapp

The Hinkal wallet allows users to swap assets across several networks, all with enhanced privacy. All you have to do is connect the wallet of your choice, complete the Integrity check process, and then create your private wallet and shield.

Hinkal Ecosystem

The Hinkal Protocol allows users to build dApps that enable more levels of privacy for the dApp and its users. It can be integrated into payment services, tracking operations, and even used to enable private tokens vesting teams.

It consists of Seven popular EVM chains and supports tokens and dApps built on those networks. These networks include Ethereum, Arbitrum, Optimism, Polygon, Avalanche, BNB, and Base. Lastly, the platform makes use of a 24/7 wallet called Hexagate that ensures the transaction executed in the smart contract is not linked to any illicit activity. If a token is flagged for being involved in fraudulent activities, it informs Hinkal to act accordingly.

Use Cases of The Hinkal Protocol

With the Hinkal Protocol, users are open to various use cases to maximize the utility they gain from using the platform’s services. Some of these use cases include:

• Discreet On-chain Services: Institutes that use Hinkal can carry out on-chain trading strategies without the public being able to trace or copy their strategies. This restricts market visibility and protects the interests of the liquidity providers.
• Discreet Liquidation of Tokens: Through Hinkal Liquidity, providers can liquidate tokens discreetly and send them to shielded addresses, keeping the sender and receiver identities hidden.
• Payments and Transfers: The platform is tasked with privacy and, as such, allows users to make secure and private payments and transfers.
• Asset Security: Hinkal’s privacy protocol ensures increased security for asset holdings for corporate and private asset holders, stopping them from being targeted by hackers.

Conclusion

The Hinkal Protocol provides a user-specific solution for parties requiring more privacy in their DeFi transactions. It focuses on privacy while maintaining security and transparency in blockchain transactions. This opens the door to corporate and private bodies wishing to carry out transactions without the privacy and security risks attached.