Zerojoin: Combining Zerocoin and CoinJoin

Abstract

We present Zerojoin, a privacy-enhancing protocol for UTXO blockchains. Like Zerocoin, our protocol uses zero-knowledge proofs and a pool of participants. However, unlike Zerocoin, our pool size is not monotonically increasing. Thus, our protocol overcomes the major drawback of Zerocoin. Our approach can also be considered a non-interactive variant of CoinJoin, where the interaction is replaced by a public transaction on the blockchain. The security of Zerojoin relies on the decisional-Diffie-Hellman (DDH) assumption. We also present ErgoMix, a practical implementation of Zerojoin on top of Ergo, a smart contract platform based on Sigma protocols. While Zerojoin contains the key ideas, it leaves open the practical issue of handling fees. The key contribution of ErgoMix is a novel approach to handle fee in Zerojoin.