The Calibra Research team of Facebook presented a Distributed Auditing Proofs of Liabilities, or DAPOL, protocol designed to make improvements to the existing distributed audit procedures.
The presentation was made recently at the 3rd ZKProof Workshop led by Konstantinos Chalkias, stating that their protocol builds upon and improves existing methods by introducing additional optimization and enhanced privacy.
According to the team, their method has considerable advantages over both traditional auditing techniques and existing decentralized methods.
It allows entities to undergo a distributed audit of their liabilities working in any situation where an entity cannot overstate their liabilities. When an entity gets audited by a third-party, it will typically focus on the few big accounts and may overlook many smaller ones.
DAPOL’s main advantages over existing distributed methods are their enhanced privacy:
“Notably, it does not expose the number of individuals who are included in the aggregate totals or the number of people who verify their inclusion in those totals.”
One of the DAPOL’s key features according to the Chalkias’ LinkedIn post is that it allows everyone:
To participate in the proof verification and at the same time it provides an extra automated validation tool that didn’t exist previously.”
The Calibra Research team provided an example of how this could work in practice:
“Using this technology, the proving entity — for example, a bank or an exchange — would publish its total liabilities as an aggregated signed encrypted value. This encrypted value is computed by adding the balances of every individual. Each individual whose balance is included in the total will receive a unique “ticket” to verify their inclusion. Using this “ticket,” individuals privately learn if their balance is included in the reported number. If it is not included, they can provide cryptographic evidence for dispute resolution.”
Although the Calibra Research team is not sure if and how DAPOL would be implemented within the Libra project, they do believe that it will have a profound impact on numerous domains:
“We believe there are numerous domains where DAPOL could be useful, including blockchain wallets, finance, e-voting, economic data, and even public health.”
The team expects to make their code open source soon. They are currently soliciting feedback from the cryptographic and zero-knowledge-proof communities. The code is open to additional collaborators who can help move the project forward.