zkPACT: a zero-knowledge private cross-chain token transfer framework utilizing decentralized oracle networks

Despite the growing adoption of blockchains, their isolated architectures hinder seamless cross-chain communication, challenging applications that rely on integrated blockchain infrastructures, notably Blockchain-based Information Systems (BISs). Achieving interoperability while preserving privacy and regulatory compliance remains a core challenge, particularly when separate organizations operate different blockchain platforms and tokenized value must move across them without exposing transaction links that may reveal business relationships or payment behavior. Existing interoperability solutions often incur high computational overhead and rely on protocol-specific assumptions, limiting their applicability across heterogeneous blockchains. We introduce zkPACT, a privacy-preserving framework for compliant cross-chain token transfers across heterogeneous blockchains. Our framework combines Zero-Knowledge Proofs (ZKPs), oracle networks, and off-chain batching to support scalable transfers. It employs a coordinated oracle model in which validators process cross-chain burn events, while a rotating aggregator updates the shared off-chain Merkle tree after reaching consensus, enabling private and efficient token claims. To improve scalability and reduce gas costs, zkPACT batches claim requests off-chain and then submits a single succinct proof to the smart contract. To ensure validator accountability, the framework enforces an incentive mechanism and dynamic slashing. We also integrate a Know Your Customer (KYC) mechanism that enables users to demonstrate compliance without revealing sensitive data, preserving privacy and accountability in the event of abuse. We present a proof-of-concept implementation of zkPACT that achieves up to 95% lower gas costs and up to 94% lower off-chain memory usage than a non-batching approach, demonstrating its suitability for private, scalable cross-chain token transfers.

Subjects

Blockchain interoperability

Blockchain-based information systems

Cross-chain token transfers

Decentralized oracles

Privacy-preserving protocols

Zero-knowledge proofs

DDC Class

005.8: Computer Security

330: Economics

Lizenz

https://creativecommons.org/licenses/by/4.0/

Publication version

publishedVersion

Name

1-s2.0-S0306437926000785-main.pdf

Type

Main Article

Size

2.1 MB

Format

Adobe PDF

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zkPACT: a zero-knowledge private cross-chain token transfer framework utilizing decentralized oracle networks