How does Light work?
In essence, it verifies ZK-SNARKs on the Solana runtime.
While one can use Light's zero-knowledge cryptography in many different ways, we currently focus on the movement of funds to enable private transactions on Solana:
Light verifies proofs that state that a given user owns a certain amount of tokens in a program-derived account (Light pool). The user encodes information into the proof, for example, to move the funds, either into the pool or out of the pool and into a new Solana wallet. Light also supports the fully encrypted movement of funds between two Light users inside the pool.
So how does this create on-chain privacy?
When moving the funds, clients utilize relayers who sign transactions on behalf of the client in exchange for a fee. The proof verification ensures trustless interaction between the client, relayer and program.
So there's no on-chain connection between the client and the movement of funds.
All interfaces leverage a single shared liquidity pool.
Ecosystem partners tap into instant liquidity that ensures fast and secure privacy guarantees.