Written by TACEO
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Enter Stage Left: Private Shared State

We’ve come a long way with blockchains, but let’s be real—until now, we’ve mostly had two types of data states. There’s public state like on Ethereum, where everything’s out in the open for everyone to see. It’s fantastic for transparency and trust, and it’s why Ethereum has become the backbone of DeFi and other decentralized systems. But let’s face it—public state isn’t ideal for privacy. Not everyone wants their financial transactions or personal data on display, and certainly, businesses can’t run that way.

Then came private state on zero-knowledge-powered Layer 1s and 2s like Aleo and Aztec. Now, you can keep data encrypted on-chain, so it’s safe and private while still proving things about it. For example, you can show you’ve made a payment without exposing the details. ZK proofs are a great leap forward, and unlocked applications we hadn’t seen before, like NightMarket, where users can buy and sell privately within a marketplace. But private state also has its limits—it works well for isolated, individual data but doesn’t let people collaborate on private data across the network.

For truly advanced, commercially-viable applications to thrive, we need to go further. We need a way to compute on private data from multiple sources—not just verify it individually. This is where Private Shared State (PSS) comes in. PSS is more than just private or public data; it’s a new state model that lets people keep their data private but still use it collaboratively in ways that were never possible before.

A Quick Look at Where We Started

Public State (e.g. Ethereum)

Ethereum’s public state is all about transparency. Every transaction, balance, and smart contract is open for anyone to view. Individuals retain control of their assets through private keys, but using or computing on someone’s state can be done by anyone, often in combination with others' data—giving rise to a public shared state. This model has been transformative for building open finance and decentralized systems because it creates trust. But it’s not always practical. For businesses managing sensitive data or individuals wanting privacy, sharing everything on-chain isn’t ideal. Public state is powerful, but it comes with limitations.

Private State on ZK L1s and L2s

With ZK L1s and L2s, we got private state—an approach where data stays local or encrypted on-chain, but you can still prove things about it. This has been a game-changer for privacy. It lets people prove relations, or that they meet certain conditions without showing the actual data. But there’s a bit of a catch. Private state is isolated—you can’t do much with data from different sources together. It’s perfect for individual privacy but doesn’t allow for collaborative computations. This means that, despite the privacy, you can’t really use it for joint analysis or shared data-driven applications that the public shared state of Ethereum popularized.

Why Private Shared State is a Game-Changer

Here’s where Private Shared State (PSS) really starts to shine. PSS isn’t just a way to keep things private. It’s a way for people to collaborate on private data. Think of it as a way to combine the best of both worlds—keeping data confidential while still making it useful across different parties or entities. PSS allows for a new level of collaboration in decentralized applications, where sensitive data can be used in joint computations without ever exposing the details.

Imagine being able to work with sensitive data across different people or companies without ever needing to see their actual data. You could analyze trends, make collective decisions, or even train AI models without compromising anyone’s privacy. PSS brings together the privacy of zero-knowledge with the collaborative power of Multiparty Computation (MPC) to make this possible.

What PSS Can Do: Unlocking New Possibilities

With Private Shared State, entirely new applications become possible. Here’s just a taste of what PSS can enable:

  1. Collaborative Data Analysis

    Think about social apps where people could discover common interests or shared connections without revealing their full networks. Teams like Cursive already use basic MPC to help people find mutual contacts, but with PSS, this could go further—allowing communities or groups to build a shared understanding privately, without a third party like X or telegram holding everyone’s data.

  2. Privacy-First Machine Learning

    Imagine companies in healthcare or finance pooling data to train machine learning models collectively. With PSS, they can use sensitive data from multiple sources without actually sharing it. This could transform fields like predictive healthcare or fraud detection, where data from many sources improves models but privacy needs to be absolute.

  3. Joint Proofs for Multiparty Agreements

    DAOs and corporate governance need trust, but privacy too. PSS enables private voting, where members can contribute votes or inputs securely, and the results can still be verified without revealing individual choices. This is critical for collective decision-making in a transparent yet confidential way.

  4. Privacy-Centric Marketplaces and Auctions

    In private marketplaces, businesses could securely compete in bids or auctions without revealing their offers. Only the winning bid would be public, keeping the competition fair but private. This model is a huge step forward for privacy-first business applications in supply chains, asset exchanges, or other confidential marketplaces.

How CoSNARKs Bring Private Shared State to Life

So how do we actually compute on Private Shared State? Collaborative SNARKs make it possible by combining MPC with ZK.

  1. MPC for Private Collaboration

    MPC is what allows data from multiple people to be “shared” without actually revealing it. In a coSNARK setup, each person’s data is secret shared and distributed across multiple nodes. No single node has the full picture, but together they can compute on the data securely. This setup enables PSS by allowing us to work on combined private data, essential for federated analysis, joint scoring, and secure multiparty agreements.

  2. ZKPs for Verifiable Results

    After the computation, zero-knowledge proofs are generated to verify the results without exposing the underlying data. So, in a private marketplace, for example, coSNARKs can match trades off-chain, with only the matched order verified and posted on-chain. This way, decentralized apps can rely on trusted outputs without anyone needing to see the sensitive inputs.

  3. Abstracting the Crypto

    We’re building tooling to enhance existing Domain-Specific Languages (DSLs) used for ZK circuits. Developers can code as usual—say, in Circom—and get an MPC-ready circuit. For deployment, they can either spin up their own network or send computation and proof requests to an established MPC network. Together, these tools abstract the heavy cryptography, making coSNARKs accessible without requiring deep cryptographic expertise from developers.

PSS: Shaping the Future of Web3 Collaboration

Private Shared State is more than a new state model; it’s a shift in how we think about collaboration in Web3. Just as public shared state was the foundational building block for on-chain applications over the past decade, we expect that the most powerful Web3 applications in the future will rely on Private Shared State. Imagine a network where data from different parties can come together to create value without ever being exposed. PSS enables true collaboration without compromising on privacy, offering the missing piece for Web3—a way to handle complex, data-driven tasks in a secure, privacy-first way.

This represents a level of control and privacy that Web2 could never achieve. As Web3 grows, PSS could redefine the landscape, powering everything from privacy-centric marketplaces to collaborative machine learning and decentralized research. We can't wait to see it evolve.

Ready to explore PSS in your application? Take a look at our coCircom and coNoir tools, and join us on Discord for developer discussion. If you'd like to keep up to date with the latest in coSNARKs and private shared state, sign up for our newsletter!