Why Is a Trusted Setup a Potential Vulnerability in zk-SNARKs?
The trusted setup generates the initial public parameters for the zk-SNARK system. If the "toxic waste" ⎊ a secret piece of data generated during the setup ⎊ is not immediately and verifiably destroyed, the person who holds it could potentially create counterfeit proofs.
This would allow them to mint fake coins or perform other malicious actions without being detected, undermining the system's integrity.
Glossar
Public Parameters
Inputs ⎊ These are the external data points, such as spot exchange rates or time references, that are fed into a smart contract to govern its execution, especially crucial for options valuation.
Trusted Setup
Cryptography ⎊ Trusted Setup refers to a critical, one-time procedure used to generate the initial cryptographic parameters, often called the Common Reference String (CRS), necessary for certain types of zero-knowledge proof systems, such as zk-SNARKs.
Vulnerability
Exposure ⎊ Vulnerability within cryptocurrency, options, and derivatives manifests as quantifiable risk to capital stemming from imperfectly hedged positions or systemic dependencies.