created Tux0.md

Signed-off-by: muraca <[email protected]>

applications/tux0.md

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+# Tux0
+
+- **Team Name:** Libeccio Labs
+- **Payment Address:** 12poSUQPtcF1HUPQGY3zZu2P8emuW9YnsPduA4XG3oCEfJVp (USDT on Asset Hub)
+- **[Level](https://github.com/w3f/Grants-Program/tree/master#level_slider-levels):** 2 🐤
+
+## Project Overview :page_facing_up:
+
+A [Tuxedo](https://github.com/Off-Narrative-Labs/Tuxedo) piece that leverages zero-knowledge proofs to manage a private token.
+
+### Overview
+Zero-knowledge proofs are revolutionizing the way we interact with the blockchain. They can be used to create new types of applications that are more private and secure.  
+We are particularly interested in finding a proving system which does not require a trusted setup, and is good enough to be used in a Substrate runtime.  
+Truth is zero knowledge primitives on parachains as host functions are still far, since it is a long and tedious path to decide, implement, test, and bring them on the relay chain, which involves Parity and the Polkadot Fellowship.
+
+Every developer in the Substrate ecosystem can benefit from this research. If we are successful in figuring out a fast and efficient zk protocol for Substrate runtimes, it will open up a whole new range of possibilities for runtime developers, particularly for parachains.
+
+A DAP (decentralized anonymous payment) is the simplest, yet useful, implementation of zero-knowledge proofs in blockchain we could think of, because it only needs to prove that the sender has the private key corresponding to the output UTXO and that the transaction is valid. 
+
+We naturally chose to build on Tuxedo because it is designed to make it easy to develop UTXO-based blockchains, which DAPs typically are. For example, Manta Network implemented UTXOs inside a FRAME pallet for the same purpose, which is not ideal.  
+We believe that an UTXO-based alternative to FRAME was needed, to provide developers with more choices and flexibility, leading to innovation and experimentation, which can benefit the entire ecosystem.  
+As a consequence of this choice, this project will prove that Tuxedo is ready for people to write their own runtimes, and hopefully soon their parachains as well.  
+However, the objective of this project is not to develop a production-ready module, but to conduct a research and showcase our results to the Substrate community as a whole.
+
+### Project Details
+
+**Research phase**
+
+The first part of the project will involve a research on zero knowledge protocols, with the objective of finding out a protocol that can potentially be used in a parachain runtime. We're particularly interested in non-interactive protocols that don't require a trusted setup, use succinct proofs, are fast to verify.  
+Some potential candidates are:
+- [Halo2](https://github.com/zcash/halo2/), used by Zcash in its orchard protocol;
+- [Plonky2](https://github.com/0xPolygonZero/plonky2), developed by Polygon Zero;
+- [Kimchi](https://github.com/o1-labs/proof-systems), by O(1) Labs, used by the Mina Protocol.
+
+The zero knowledge protocol used in the second phase will be chosen based on this research's results. The factors that will be considered are, by importance:
+- verification performance and proof size;
+- proof construction performance;
+- security, if the library is production-ready;
+- ease of use, for example high level languages to write circuits.
+
+We are aware that the results might not be as good as expected. If we fail to identify a protocol that can be used in a Substrate runtime, then we would still proceed with developing the final product, using custom host functions.  
+However, since some of these protocols are already used in other blockchains, we're confident this phase will be a success.
+
+**Development phase**
+
+The final product will be a Tuxedo piece, written in Rust, which can be used in any Tuxedo runtime for private token transactions. The code will be stored in a public GitHub repository, along with an example on how to use it in a Tuxedo runtime. The documentation will be generated from Rustdocs and hosted on GitHub pages.  
+We will also develop an extension for Tuxedo's wallet, to be able to retrieve the balance for a certain address, build zero knowledge proofs and send transactions.  
+We will write unit tests for all of the Tuxedo primitives we develop for Tux0 to ensure that they are functionally correct, along with integration tests to show that the Tux0 wallet can successfully create and verify transactions against a template runtime.
+
+The basic primitives behind the protocol we designed for Tux0 are:  
+- **Coin**, a simple public currency, managed by the [Money piece](https://off-narrative-labs.github.io/Tuxedo/money/index.html). Each UTXO has a certain monetary value, and optionally an owner.  
+Wallets need to check all the transactions, to see if any produced UTXO is owned by a certain address they manage. Using the same process, any external entity can easily figure out the balance and transaction history for any public key.
+- **DAP Coin**, similar to Coin, but it is stored on-chain as a H256, encrypted using the owner’s public key. Each UTXO has a private monetary value, an owner, and other parameters needed for proving its ownership and uniqueness.  
+Wallets will need to check all the transactions to see if any produced DAP Coin can be decrypted and decoded. However, external entities will not be able to understand the senders, recipients and values of any transaction, ensuring privacy.  
+- **Transfer function**, the only transaction the Tux0 piece will allow, which can consume and produce Coin or DAP Coin indiscriminately. As a consequence, users can freely convert Coin to DAP Coin and vice versa.  
+Each DAP Coin in input requires a zero knowledge proof to demonstrate the sender has the right to consume it, without revealing its identity.  
+Another zero knowledge proof is needed to prove that the operation is valid, because the sum of the outputs is less or equal to the sum of the inputs, without revealing any of these numbers.  
+Due to constraints imposed by the chosen proving system, this function will have a limited amount of inputs and outputs.
+
+We can't guarantee for the project's security, since its purpose is to demonstrate the use of the chosen zero knowledge protocol, not to write a production-ready module. For that, the protocol should be thoroughly reviewed by experts, and the libraries and piece should be subject to security audits.
+
+### Ecosystem Fit
+
+Our research will be useful to the Substrate community because it will help to identify zero-knowledge protocols that are suitable for use in Substrate runtimes.  
+This could enable Parachain developers to use zero-knowledge proofs for any use-case they want, without needing to wait for primitives to be added to the Relay Chain.
+
+After a proper security audit, Tux0 would be a valuable tool for developers who want to build privacy-preserving dapps on the Polkadot/Substrate/Kusama ecosystem. It would also be useful to users who want to be able to send and receive tokens privately.  
+Moreover, Tux0 would demonstrate that Tuxedo is ready for developers to build their custom logic on top of it, and hopefully to be able to use it in production soon.
+
+Even if fundamentally different, the protocol we designed for Tux0 is inspired by the Zerocash protocol, which uses zero knowledge proofs for private transactions.  
+An example of zero knowledge proofs used for private transactions can be found in Manta Network, where the protocol used requires a trusted setup. Moreover, their private coin is a simulation of UTXOs written inside a FRAME pallet, while Tuxedo allows native UTXOs in a Substrate runtime, and we are sure that our transactions costs will be fundamentally lower.
+
+## Team :busts_in_silhouette:
+
+### Team members
+
+- Matteo Muraca
+- Alberto Perrella
+
+Advisors: 
+- Joshy Orndorff 
+
+### Contact
+
+- **Contact Name:** Matteo Muraca
+- **Contact Email:** [email protected]
+
+### Legal Structure
+
+- **Registered Address:** N/A
+- **Registered Legal Entity:** N/A
+
+### Team's experience
+
+Matteo and Alberto were the first hires at NFT Chain, and worked there until its termination of business.
+Matteo successfully graduated at the second cohort of the Polkadot Blockchain Academy in Buenos Aires, after which he started contributing to the Polkadot SDK, and lately to Tuxedo as well. At NFT Chain, he was one of the core developers for a parachain to handle custom non-fungible assets with formal constraints.    
+Alberto holds a Master's Degree in Mathematics at ETH Zurich. At NFT Chain, along his core team duties, he was responsible for prototyping a protocol that leverages zero knowledge proofs to facilitate the verification of formal constraints on-chain. 
+
+Unfortunately, all the work done at NFT Chain is private, in the hands of the company owner, and cannot be shared.  
+However, we presented some working prototypes at Sub0 2022, and the project has been accepted as part of the Substrate Builders Program.
+
+
+---
+
+Joshy Orndorff is one of the main contributors to Tuxedo. He's entered the Substrate ecosystem in 2019, and among all things he also taught the Polkadot Blockchain Academy in all three cohorts: Cambridge, Buenos Aires, and Berkeley.  
+He will not be directly involved in the development of this project, but he will be available for advice and guidance, mostly on the Tuxedo side.
+
+### Team GitHub Profiles
+
+- https://github.com/muraca
+- https://github.com/Gorzorg
+
+The eventual code and documentation will be published on the Libeccio Labs GitHub organization:
+- https://github.com/LibeccioLabs
+
+### Team LinkedIn Profiles
+
+- https://www.linkedin.com/in/matteo-muraca/
+- https://www.linkedin.com/in/alberto-perrella-2522bb1a2/
+
+
+## Development Status :open_book:
+
+We have currently identified some zero knowledge protocols which might become candidates for the research part.  
+We also started sketching out some code for a Tuxedo piece, but nothing worth mentioning.  
+
+## Development Roadmap :nut_and_bolt:
+
+### Overview
+
+- **Total Estimated Duration:** 12 weeks
+- **Full-Time Equivalent (FTE):**  1,5 FTE
+- **Total Costs:** 18,000 USD
+
+### Milestone 1 — Research phase
+
+- **Estimated duration:** 6 weeks
+- **FTE:**  1,5
+- **Costs:** 9,000 USD
+
+| Number | Deliverable | Specification |
+| -----: | ----------- | ------------- |
+| **0a.** | License | Apache 2.0 |
+| **0b.** | Documentation | We will provide both **inline documentation** of the code and a basic **tutorial** that explains how a user can add a new testcase, run the benchmarks, and verify the results. |
+| **0c.** | Testing and Testing Guide | Core functions will be fully covered by comprehensive unit tests to ensure functionality and robustness. In the guide, we will describe how to run these tests. |
+| **0d.** | Docker | We will provide a Dockerfile(s) that can be used to test all the functionality delivered with this milestone. |
+| 0e. | Article | We will publish an **article** on our GitHub blog that explains our research process, the results, and why we decided to proceed with a certain protocol. |
+| 1. | Benchmarking | We will develop a program that will automatically run benchmarks and export the results in a readable format, like JSON. |
+| 2. | Data Visualization | We will provide a tool to easily visualize and compare the benchmark results. |
+
+
+### Milestone 2 — Development phase
+
+- **Estimated Duration:** 6 weeks
+- **FTE:**  1,5
+- **Costs:** 9,000 USD
+
+| Number | Deliverable | Specification |
+| -----: | ----------- | -------------
+| **0a.** | License | Apache 2.0 |
+| **0b.** | Documentation | We will provide both **inline documentation** of the code and a basic **tutorial** that explains how Tux0 can be included in a Tuxedo runtime, and how to interact with it, using Tuxedo's Template Wallet. |
+| **0c.** | Testing and Testing Guide | Core functions will be fully covered by comprehensive unit tests to ensure functionality and robustness. In the guide, we will describe how to run these tests. |
+| **0d.** | Docker | We will provide a Dockerfile(s) that can be used to test all the functionality delivered with this milestone. |
+| 1. | Tux0 | We will develop a Tuxedo piece that manages a DAP token using zero knowledge proofs. |
+| 2. | Tuxedo Wallet Extension | We will extend the Tuxedo Template Wallet to support Tux0 balances and to send Tux0 transactions. |
+
+## Future Plans
+
+We intend to continue to maintain Tux0 at least until a proper release of Tuxedo's parachain support - which might even come before the delivery of this grant.  
+We are interested in testing the zero-knowledge protocol we chose for Tux0 in a parachain environment.
+
+## Referral Program (optional) :moneybag:
+
+- **Referrer:** Joshy Orndorff
+- **Payment Address:** 0x5a335908df9D2C47304338E3b744579Ed7C6a64d (DAI)
+
+## Additional Information :heavy_plus_sign:
+
+We have been part of the Substrate ecosystem since early 2022, so we had the chance to hear about the W3F Grants from various sources: Substrate Builders Program, Polkadot Blockchain Academy, Parity employees, Sub0 2022, and probably more.  
+However, it was Joshy the one who suggested us to ask for a grant for this idea, and he deserves a big thank you from both of us.