Threshold Crypto for Flow Encryption

In Penumbra, we need some scheme to achieve privacy in a multi-party context, where knowledge from multiple participants is required. Traditional zero-knowledge proofs are not sufficient for this, since there is a global state that no individual participant can prove knowledge of if the global state is private. This is described in the Batching Flows section at length. To implement flow encryption, we need a few constructions:

  • Distributed Key Generation: a distributed key generation scheme that allows a quorum of validators to derive a shared decaf377 public key as well as a set of private key shares.

  • Homomorphic Threshold Encryption: a partially homomorphic encryption scheme which allows users to encrypt values and validators to aggregate (using the homomorphism) and perform threshold decryption on aggregate values using the private key shares from DKG.