What you need to know 🐳 Aleo is a layer 1 that aims to be both anonymous and programmable, extending anonymity to all uses beyond simple payments.
To facilitate development, Aleo has created its own programming language, Leo, which allows developers to free themselves from the complexity inherent in anonymity technologies.
Presentation 🧬 Aleo's origin dates back to 2018, and the blockchain launched its mainnet in September 2024.
Aleo is a layer 1 based on proof of stake. It is an anonymous blockchain by default that supports all types of use case, not just payments as Zcash does, for example.
Aleo relies on zero-knowledge (ZK) technology to enable decentralised private computing. The heavy computation operations are carried out off-chain and only their result is verified on-chain.
Zero-knowledge proofs (ZKP) are proofs that make it possible to demonstrate the veracity of information without revealing its content (for example: proving that a person is of age without disclosing their age). They have the advantage of being succinct, meaning that they can be used to quickly verify the result of a long and complex calculation.
In almost all blockchains, the re-execution of transactions in a block ensures that it is valid. A network's validators must therefore all re-execute the blocks in order to validate them. Aleo avoids this problem and takes advantage of the succinct property of ZKs, allowing the validator to only check a mathematical proof that attests to the validity of the blocks they receive.
ZKs are generated by "provers" who compete to generate the ZK proof attesting to the validity of each block. Provers are paid in ALEO tokens. There is therefore a useful form of proof of work.
Off-chain execution makes it possible to create programs that require a huge amount of computing power and cannot run under normal on-chain conditions, opening up new possibilities for developers.
Aleo's virtual machine is called snarkVM and is based on the Leo programming language, created specifically to abstract the complexity of ZK technology from network developers.
Financing 💰 Aleo has raised a total of $228 million:
28 million in April 2021 from a16z, Coinbase Ventures, Galaxy, Variant Fund, Placeholder and Polychain, among others 200 million in February 2022 from Kora, among others, SoftBank Vision Fund, a16z, Tiger Global, Samsung Next, Slow Ventures, Sea Capital Team 👾 Alex Pruden is the current CEO of Aleo. Previously, he held the positions of strategy director and then operations director at the company.
It is not known who the other members of the team are.
Ecosystem 🤝 The Aleo ecosystem is still in its infancy, which can be explained by the network's recent launch and above all its unique programming language, which can represent a barrier to entry for developers.
Arcane Finance, Aleo's main DEX, offers the possibility of providing liquidity or exchanging cryptocurrencies in a public or private way, as the user chooses.
Pondo, a liquid staking protocol, facilitates access to ALEO token staking returns.
Verulink enables the transfer of ETH, USDT and USDC from Ethereum to Aleo.
Shadowfi, a lending protocol, is currently in development.
zPass, also under development, aims to enable the creation of anonymous proof of identity on Aleo.
The ALEO token The ALEO token is used to pay transaction fees on the network. It can be staked and delegated to validators, currently offering a return of around 25%.
The ALEO is used to reward network validators and provers.
In addition, the ALEO allows participation in network governance votes.
At launch, there are 1.5 billion ALEO tokens. This quantity will evolve as staking and proof rewards increase the supply in circulation by around 75% over ten years, from 1.5 billion to over 2.6 billion. The issue rate will gradually decline from 13.5% in the first year to 1.6% in the tenth year, trending towards 0 thereafter.
Competitors ⚔️ Aleo has no direct competitor as an anonymous, programmable layer 1. However, there are competitors developing anonymous, programmable layer 2s on Ethereum: Aztec, based on the Noir programming language, and Polygon Miden, using Rust.
These two projects aim to enable the generation of client-side ZK proofs, thus preventing users from revealing their transaction data to a third party.
It should be noted that Aztec and Polygon Miden are still in the development phase.
Regulation ⚖️ There is no clear regulatory framework for anonymous blockchains. Nevertheless, most states are putting pressure on platforms not to support certain anonymous cryptocurrencies. Despite this, Aleo is available on Coinbase.
The Big Whale's opinion 🐳 The network currently has just 16 validators. As with any nascent blockchain, decentralisation is a lengthy process.
Tokenomics clearly favours insiders, with more than 50% of tokens reserved for private investors and the development team.
The introduction of a new programming language is a major obstacle to attracting developers.
Despite these challenges, Aleo remains a pioneer in the field of anonymous, programmable blockchains. On-chain anonymity unlocks many use cases, from protecting personal data to limiting adversarial strategies in DeFi.
The full integration of ZK technology also represents an advantage for network performance: off-chain execution and on-chain verification avoid the need to re-execute transactions to ensure they are valid. This opens the way to applications requiring too much computing power to be carried out on-chain. This approach to scaling via ZKs is very similar to Ethereum's future consensus layer, "Beam Chain" .
Aleo is therefore an ambitious project still in its infancy, with a currently underdeveloped ecosystem.
