Project for ETH Global Hackathon
Tokens are spent on the sending chain and a new note is created on the receiving chain The tokens involved are zkERC20 tokens following the proposed confidential token standard EIP-1724
The process is carried out by an operator.
The operator will receive the note fron a note commitment tree on the sending chain and (if the authorisation is correct) will issue a nullifier on the sending chain and create a new note of equivalent value on the receiving chain. The authorisation can be set up via a confidential approve function on the zkERC20.
The operator is rewarded for mainiting the bridge by taking fees ( and perhaps MEV) , but they are required to supply a stake If they fail to transfer a token their stake will be slashed.