Testnet 3 Phase II Incentives Retrospective

Phase II Summary

This past January, Aleo concluded the second phase of Testnet 3. We focused Phase II on prover incentives to generate zero-knowledge proofs (ZKPs) so that users can send/receive assets or interact with applications built on the Aleo network. In return for generating Proof-of-Succinct-Work (PoSW) coinbase puzzle solutions, provers in Aleo are eligible for a portion of the coinbase reward, described in more detail in the Testnet 3 Incentives Kickoff blog post.

Throughout the 8 weeks, we witnessed over 44,000 Provers connect to the network from over 94 countries globally. The coinbase_target, akin to network difficulty, peaked at around 750 MILLION Proofs Per Second (PPS). Aleo is the first zkVM & layer-1 protocol to achieve these proving numbers across any blockchain network. We also distributed 3.1M Aleo Credits pro-rata to Provers that contributed valid solutions for a given block above the minimum difficulty target.

These metrics significantly improved upon Testnet 2, when we had around 10,000 nodes connected to the network and an average generation of 20,000 PPS. Testnet 3 improved upon this baseline by 4.4x the number of nodes connected to the network and a 37,000x greater PPS.

Key Takeaways & Achievements

A core design goal of Aleo is a fully permission-less and censorship-resistant architecture, and provers will play a critical role in that process. Although provers do not directly participate in block production like validators, they are 1) ensuring a broader distribution of Aleo credits, and 2) enabling user choice for proof generation. Through Testnet 3 Phase II, we were able to prove that this is possible due to the following:

• We validated our hypothesis that separating block production from coinbase generation allows for provers to compute proofs at their desired scale

• A significant number of proving pools contributed to generating proofs on the network, which helped make proving more accessible

• Proving on the network was fairly distributed, unlike the consolidation of mining that we witnessed during Testnet 2

A critical aspect of PoSW proving is that it creates economic incentives for accelerating general-purpose hardware to generate ZKPs with higher throughput and better efficiency. For any platform leveraging zero-knowledge, hardware that allows provers to generate efficient and cost-effective proofs is a major advantage. To that end, the ZPrize competition (which Aleo sponsored and helped organize) also was a critical step in improving ZKP implementations in hardware. And in fact, work done through ZPrize on accelerating the PoSW process in GPUs directly benefitted provers in Testnet 3 Phase II.

What’s on the Horizon for Aleo

Our primary focus continues to be launching mainnet in July 2023. In pursuit of this goal, we recently hit a major milestone by releasing Deploy & Execute on Testnet 3 on February 24th. Now, you can deploy a Leo application on the Aleo network as a developer, a first-of-its-kind accomplishment for the ZK space. With this release, Aleo has fulfilled the ultimate promise of creating a zero-knowledge execution environment as initially envisioned in the ZEXE research paper co-authored by Aleo CTO Howard Wu and other founding members of the team.

Introducing Testnet 3 Phase III

In the coming weeks, we will announce details for Testnet 3 Phase III on-chain incentives, some of which will incorporate the functionality associated with the release of Deploy & Execute. These on-chain incentives will enable the following:

1. Application Developers to write & deploy applications

2. Validators to validate blocks & stake Aleo Credits

In parallel, we will launch both a bug bounty program and a new community grants program that encourages:

1. White Hat Hackers to find bugs in Aleo’s protocol design

2. Developers to build supporting infrastructure that interacts with the Aleo blockchain

While waiting for these incentives, you can experiment with Deploy & Execute by following the instructions in the Testnet 3 section of our developer documentation.

Future Milestones

Aside from our incentive plans, we will launch additional milestones throughout Testnet 3 Phase III. These include but are not limited to:

• Launching our consensus mechanism (AleoBFT) and enabling staking

• Adding Marlin Batch Proving to snarkVM to increase transaction throughput

• Releasing support for on-chain execution through the finalize statement in Leo programs, improving composability of applications

• Supporting multi-execution transaction types for snarkVM and Leo; which will enable more efficient inter-program calls

For more specific details on Aleo’s roadmap to mainnet launch, check out our Twitter post here.

Claiming Rewards

Incentive rewards for Testnet 3 Phase II will be calculated and awarded to participants according to what was laid out in the Testnet 3 Incentives Kickoff blog post. If you participated in Testnet 3 Phase II incentives and met the criteria outlined in the blog post above, here is what you need to know to claim your rewards:

1. You can ONLY receive rewards if you ran the provided scripts.

2. ALL participants who are eligible to receive rewards MUST go through a KYC/AML process and pass OFAC screening. If you are a US or Canadian citizen you are not eligible to receive any rewards UNLESS you are an accredited investor.

3. If you participated in a proving pool it will be up to the individual(s) who managed the pool to allocate rewards appropriately to those who contributed.

Please note that Aleo Credits received during Testnet 3 will be distributed as part of Aleo’s mainnet launch. They are to be used as a payment mechanism for services on the Aleo mainnet. They are not investments nor investment vehicles, and they should not be treated as such; their value is simply their utility for mainnet functionality. By claiming your rewards, you represent, warrant, and acknowledge that you are:

• Not acquiring Aleo Credits as an investment and have no expectation of economic benefit or profit as a holder of Aleo Credits

• Not relying on Aleo or any of its employees or representatives in any way

• Not acquiring any equity or other ownership interest in Aleo by virtue of owning Aleo Credits

• Will not portray Aleo Credits as an investment or an opportunity to obtain an economic benefit or profit

If you participated in Phase II as a prover, please join our Discord community for more details & future announcements specifically related to claiming rewards for incentivized activities.