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by Alok Vasudev
Credit: DALL·E

We're thrilled to announce our investment in Axiom, a company we think can open up a new frontier for smart contracts and blockchain applications.

At Standard Crypto, we believe that the true power of a blockchain is largely derived from its state. Token balances, NFT ownership records, and the logical status of smart contract applications are a few examples of what’s stored within the rich, compounding, and openly accessible state of a public blockchain. All of that data stored in one place, managed through uniform protocols, can generate a network effect as powerful as any we’ve observed in the software industry. Public blockchains, in essence, act as universally accessible, multi-player databases.

However, blockchains like Ethereum exhibit a notable limitation in their database-like capabilities: they lack the ability to retrieve and utilize previously stored information. Unlike Web2 internet applications that use conventional databases, a smart contract cannot access (and therefore act upon) any historical data stored onchain.

This limitation presents developers with a challenging trade-off when designing smart contracts that need to interact with historical state. To achieve this functionality, they often must compromise on trust assurances – a Faustian bargain. The current workaround involves setting up an offchain server. This server processes the blockchain’s state data, performs necessary computations offchain, and then inputs the results back into a variable within the smart contract.

A user of an application constructed in this manner loses a key attribute of what makes blockchain protocols unique: assurance that the system is functioning as declared at all times. Instead users must place their trust in an opaque and unilaterally controlled offchain server that can be wrong – by accident or on purpose – with no recourse.

Fortunately, a solution is here: Axiom. Axiom introduces a seemingly minor yet transformative addition to the previously mentioned process. This critical addition is the generation of a zero-knowledge proof (ZKP) in tandem with the offchain computation. Consequently, a smart contract can now efficiently verify the ZKP onchain before accepting the computation’s result. And for users interacting with the smart contract, this means they now have a mathematically-backed assurance that the offchain activities align precisely with their expectations.

Axiom is co-founded by Yi Sun and Jonathan Wang, two brilliant and capable entrepreneurs uniquely suited to pioneer this frontier. We’ve had the fortune of knowing Yi for years, dating back to his time as a Columbia professor, and can say with confidence that Yi Sun is your favorite ZK researcher’s favorite ZK researcher.

We think Axiom radically expands the design space for smart contracts. We’ve already seen developers using Axiom in creative ways including onchain recommendation engines, airdrop targeting based on ongoing usage (rather than a one-time snapshot), new kinds of trustless oracles, and propagating onchain governance results to protocol instances on other chains. And with this week’s mainnet launch of Axiom’s V2, we anticipate seeing a lot more exciting ideas.

Axiom is a company we deeply believe in, which is why we're honored to have co-led their initial round of financing. If you’re as excited as we are about “trustless cmd+f for Ethereum”, there are many ways to get involved. Axiom is hiring, of course. If you are a developer with a background in smart contracts and an interest in incorporating ZKPs into your protocols, consider applying for Axiom’s ZK Intensive workshop for hands-on learning. And if you’re ready to get your hands dirty, then try out the REPL or jump straight into the docs.

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This post is for general information purposes only. It does not constitute investment advice or a recommendation or solicitation to buy or sell any investment and should not be used in the evaluation of the merits of making any investment decision. It should not be relied upon for accounting, legal or tax advice or investment recommendations. This post reflects the current opinion(s) of the author(s) and is not made on behalf of Standard Crypto Management LP (“Standard Crypto”) or its affiliates. The opinions reflected herein are subject to change without being updated.