‍#我在Gate广场过新年

New Force in Privacy Tokens—A Deep Dive into the Recent Surge of AZTEC

The cryptocurrency market has been sluggish, and newly launched coins have not performed well overall. AZTEC stands out as the only bright spot, with its price doubling in less than half a month since launch. Although currently in a retracement phase after a sharp rise, whether it will reach new highs remains to be seen. Today, Little财神 will analyze this rising star in privacy tokens:

In the rapidly evolving landscape of blockchain technology, privacy protection has become a core issue in the digital asset space. AZTEC, as the first privacy-first Layer 2 solution in the Ethereum ecosystem, builds a “programmable privacy” smart contract platform using zero-knowledge proof (ZK) technology. Its native token AZTEC is becoming a key fuel in this revolution. Aztec secured a $100 million Series B funding round led by a16z. Its team consists of top cryptographers who invented the trustless client proof standard, making privacy-preserving applications possible.

I. Technical Architecture: Privacy-First zk-Rollup
1. Zero-Knowledge Proof Core
Using zk-Rollup technology, sensitive transaction data is compressed into zero-knowledge proofs, revealing only necessary information on-chain.
Developers can write smart contracts in Noir language to enable “selective disclosure”—for example, DeFi protocols can hide user holdings and only reveal transaction results.
2. UTXO Note Model
Based on the UTXO (Unspent Transaction Output) model, AZTEC employs a privacy note system where each transaction generates encrypted notes supporting confidential ERC-20 token transfers.
Users have full control over data visibility, encrypting everything from transaction amounts to contract states.
3. Cross-Chain Interoperability
Supports seamless interaction with Ethereum L1 and is compatible with mainstream wallets like MetaMask and Coinbase.
Asset cross-chain transfers are facilitated via zkBridge, lowering user entry barriers.

II. Token Economics

1. Total Supply and Distribution
AZTEC has a total supply of 10.35 billion tokens, with 21.96% allocated for public auctions and 14.95% sold through continuous clearing auctions (CCA).
Remaining tokens are allocated to the core team, ecosystem, and future incentives.
2. Auction Mechanism
Uses Uniswap’s continuous clearing auction, starting at 0.000010 ETH (about 3 cents), at a 75% discount to historical valuation.
Proceeds from the auction are injected into the Uniswap V4 liquidity pool, creating a “issuance-liquidity” closed loop.
3. Lock-up Period and Release
Token lock-up periods range from 90 days to 12 months, with the community able to vote for early release.
Initial circulating supply is approximately 2.88 billion tokens, accounting for 27.8% of total supply.
4. Token Use Cases
✅ Network Security and Staking
Validator staking: users must stake 200,000 AZTEC to become validator nodes, maintaining network stability and earning transaction fee rewards.
Prover incentives: nodes generating zero-knowledge proofs receive token rewards, ensuring efficient network operation.
✅ Governance Rights
Token holders can participate in protocol upgrade votes, including adjusting inflation rates (up to 20%) and modifying transaction fee mechanisms.
Major decisions are made via on-chain governance to ensure community-driven development.
✅ Transaction Fee Payments
Users can pay transaction fees with ETH or USDC through Fee-Paying Contracts (FPCs), enabling “feeless payments.”
Fees are settled in AZTEC, forming a closed-loop economy.

III. Market Performance

After listing on Gate, AZTEC experienced a brief retracement to $0.016, then entered an upward trend, reaching a high of $0.03942. Its circulating market cap briefly surpassed $100 million before beginning to retrace. Currently, it trades at around $0.028, with a market cap of approximately $80 million. As an Ethereum Layer 2 project with privacy features, this market cap is relatively low, leaving room for further growth. However, this retracement may not be over yet. Investors can watch whether the price stabilizes around $0.025; if it does, it could be a good entry point for long positions.

IV. Project Controversies and Risks

Community Disputes
1. Airdrop Controversy: No airdrops were set, so long-term participants cannot receive rewards.
2. Valuation Skepticism: The 75% discount is still seen as misaligned with the project’s output.
3. KYC Contradiction: The privacy narrative conflicts with KYC requirements.

Regulatory Risks
Must navigate global privacy regulations to avoid repeating the Tornado Cash incident.