Charles Lu, co-founder and the COO of Espresso Systems, leads a team focused on developing blockchain tools to tackle privacy and scalability challenges. Their flagship product, CAPE, is designed to protect the privacy of assets for Ethereum users.
The exploration of ZK-proofs' potential led to the birth of Espresso Systems
The journey of Espresso Systems began during Lu's time at Stanford University, where he founded the Stanford Blockchain Club, delving into blockchain technology. While pursuing his Ph.D., he co-authored several papers with Ben Fisch and Benedikt Bunz, exploring the application of zero-knowledge proofs for privacy and security. Through interactions with entrepreneurs, investors, and innovators in the blockchain ecosystem, he gained valuable insights into new use cases and limitations of existing blockchain technologies. Recognizing the potential of ZK-proofs to address privacy and scalability challenges in blockchain, Lu, along with fellow members of the Stanford Applied Cryptography Research Group, established Espresso Systems in 2020. Ben Fisch, co-founder of Monero and BitTorrent, assumed the role of CEO, while Lu became COO, with Benedikt Bunz serving as the team's Chief Scientist, with Lu serving as COO.
Espresso Systems has successfully raised over $30 million from prominent investors in technology and crypto, including Greylock Partners, Electric Capital, Sequoia Capital, and Polychain Capital. Most recently, they secured a $29 million Series A funding round led by Greylock Partners and Electric Capital.
Espresso Systems' CAPE effectively caters to both transparency and privacy concerns
The company's first product, CAPE(Configurable Asset Privacy for Ethereum) addresses a crucial dilemma faced by global companies that need to pay employees or suppliers with cryptocurrencies. Companies had to choose between transparently executing payments on the blockchain, visible to the world, or using tools like zCash for privacy, however Lu believed that both options had drawbacks, leading to the development of CAPE.
CAPE allows users to customize the level of transparency and privacy when transferring digital assets, from stablecoins to NFTs. Unauthorized parties can only observe transactions through CAPE anonymously, without knowledge of the asset being traded. Asset creators can adjust the "viewing" settings to allow specific parties limited access to transaction information. With CAPE, new assets can be generated or existing Ethereum assets can be wrapped with privacy attributes. Wrapping locks the asset in an ERC-20 contract, generating the specified CAPE asset type, and unwrapping burns the CAPE asset, unlocking the original asset. This granular control strikes a balance between privacy and transparency, meeting users' expectations for secure and confidential financial transactions.
Sequencer’s Centralization problem (source: Espresso Systems)
Espresso Sequencer overview(source: Espresso Systems)
Espresso Systems are taking proactive measures to tackle the single point of failure challenge that arises from centralized sequencer operations, a significant concern in the realm of roll-up solutions.
Motivated by this keen awareness, Espresso Sequencer is on a mission to create a shared sequencer network that fosters the harmonious coexistence of multiple roll-ups. This forward-thinking initiative is grounded in a problem-solving approach, with a clear focus on building a robust roll-up network that achieves key objectives such as reliable neutrality, improved interoperability, effective mitigation of negative impacts from Maximum Extractable Value (MEV), and the establishment of long-term incentive alignment with L1 validators.