How to Use Ethereum Precompiled Contracts for Enhanced Smart Contract Functionality

Background Knowledge

Smart Contracts

Ethereum features two primary account types:

1. Externally Owned Accounts (EOA)

   • Controlled by private keys
   • No associated code
   • Can initiate transactions (transfers or smart contract interactions)

2. Contract Accounts (CA)

   • Governed by smart contract code
   • Associated with executable code
   • Created through transactions that deploy contracts

When transactions are processed:

• EVM converts transactions into Message objects
• Contract objects load bytecode from StateDB
• The stack-based EVM interpreter executes OPCode operations with gas constraints

Key limitations:

• Stack-based architecture reduces computational efficiency
• Complex operations may exceed block gas limits

Privacy Assets

Blockchain's transparency creates privacy challenges. Privacy assets address this by:

• Concealing transaction parties/amounts via cryptography
• Using techniques like MimbleWimble or ZK-SNARKs
• Implementing privacy through smart contracts (e.g., Nightfall, AZTEC)

Precompiled Contracts Explained

Concept

Precompiled contracts optimize complex computations by:

• Moving intensive operations off-EVM (e.g., elliptic curve math)
• Reducing gas costs for frequent operations
• Improving execution speed through native client implementation

Current Ethereum implementations include cryptographic functions like:

• bn256Add() (Elliptic curve addition)
• bn256ScalarMul() (Scalar multiplication)
• bn256Pairing() (Pairing operations)

Implementation

The EVM handles precompiled contracts through:

1. Contract object generation (via Call(), DelegateCall(), etc.)
2. Specialized execution paths in evm.go
3. Native function execution (bypassing EVM interpreter when possible)

// Simplified execution flow in go-ethereum
if isPrecompiled(contractAddr) {
    p := precompiles[contractAddr]
    return RunPrecompiledContract(p, input)
} else {
    return interpreter.Run(contract, input)
}

Usage

Developers invoke precompiled contracts via inline assembly:

pragma solidity ^0.8.0;

contract CurveOperations {
    function ecAdd(bytes32[4] memory input) public returns (bytes32[2] memory) {
        assembly {
            if iszero(call(500, 0x06, 0, input, 0x80, output, 0x40)) {
                revert(0,0)
            }
        }
    }
}

Privacy Asset Applications

Cryptographic Building Blocks

1. Elliptic Curve Support

   • EIP-196: Added ECADD (500 gas) and ECMUL (40,000 gas)
   • EIP-197: Added Pairing (variable gas cost)

2. Curve Selection

   • BN256: Current Ethereum standard (pairing-friendly)
   • Future considerations: BLS curves (better performance) and secp256k1 (general purpose)

Privacy Projects Comparison

Gas Optimization

EIP-1108 improvements demonstrate:

• 75-85% gas reduction for privacy operations
• Methodology: Benchmark actual computation time
• Formula: gas = (base_time + per_op * n) * 25.86 gas/ms

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Future Developments

Qtum's Approach

• Higher gas limits (40M/block vs Ethereum's 8M)

• Planned additions:

  • BLS curve support
  • secp256k1 precompiles
  • Bulletproof verifier precompile

Emerging Standards

1. Enhanced Curve Support

   • BLS12-381: Better performance than BN256
   • Cross-chain compatibility

2. Proof System Advancements

   • Recursive SNARKs
   • Plonk-based systems

FAQ Section

Q: Why use precompiled contracts instead of regular smart contracts?
A: They offer 100-1000x better performance for cryptographic operations while reducing gas costs by 90% or more.

Q: Are precompiled contracts less secure than EVM contracts?
A: No - they're implemented at the client level with the same security assumptions as core protocol functions.

Q: How do privacy assets maintain auditability?
A: Through zero-knowledge proofs that allow validity verification without revealing transaction details.

Q: What's the gas cost difference between bn256 and BLS curves?
A: Early benchmarks suggest BLS operations consume 30-50% less gas for equivalent security levels.

Q: Can precompiled contracts be upgraded?
A: Only through network upgrades (hard forks), making careful initial design critical.

Q: How do pairing operations enable privacy?
A: They allow efficient verification of complex relationships in ZK proofs without revealing inputs.

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