Aztec, a layer-2 rollup that prioritizes privacy, announced on Thursday that its testnet is now live. This news arrives as a growing number of new privacy-focused solutions start attracting interest from large institutions that require confidentiality for processing large transaction batches. The Aztec team revealed they have been developing the product for more than eight years, advancing this cutting-edge technology closer to the mainnet launch. What sets Aztec apart from other zero-knowledge rollups is its emphasis on helping applications and users protect their private information by integrating encryption directly at the protocol level. “All of the secret information that you want to keep encrypted is posted on our blockchain in an encrypted form, ” explained Zac Williamson, co-founder of the Aztec Network, in an interview with CoinDesk. Layer-2 networks have proliferated within the Ethereum ecosystem over recent years, offering faster and cheaper transaction alternatives compared to the Ethereum main protocol. However, Aztec compromises certain features to maintain its goal of being both privacy-focused and decentralized. “A fully private transaction will have more data associated with it because everything is encrypted. That means more resources are required, and as a result, scaling capacity is limited, ” Williamson added. “We are comfortable with that.

Aztec's unique value proposition is not about scaling. While we do achieve some scaling as a layer 2, we never aim to be as cost-effective as other layer 2 solutions. ” Privacy-preserving tools have long been in demand by institutions needing to manage sensitive transaction data on public blockchains. In 2022, Aztec raised $100 million in a Series B funding round led by a16z, at a time when conversations around blockchain privacy were gaining momentum. Lately, privacy-preserving technologies have regained prominence as major institutions begin adopting on-chain solutions. For instance, on Tuesday, privacy-focused project Miden announced it had secured $25 million in seed funding from a16z. Read more: DeFi Privacy Bridge Aztec Connect Sunsets After Less Than a Year