Aztec has launched the alpha version of its v5 execution layer, introducing a programmable privacy framework that allows Ethereum applications to handle both public and private states within the same layer 2 environment.
Summary
- Aztec has released the alpha version of its v5 execution layer, bringing programmable privacy to Ethereum through zero-knowledge smart contracts.
- The new architecture processes private computations on user devices while simultaneously verifying on-chain transactions without exposing sensitive data.
- Aztec said the execution layer supports confidential decentralized applications with features designed to reduce front running and MEV risks.
Aztec Labs has announced the alpha release of its v5 execution layerand describes it as a step toward making privacy-native smart contracts on Ethereum practical.
The new architecture allows developers to build decentralized applications that combine confidential user data with public blockchain status, while relying on zero-knowledge proofs to verify transactions without revealing sensitive information.
Unlike Ethereum’s base layer, where each validator processes and stores transaction inputs, outputs, and execution data to reach consensus, Aztec’s execution layer moves private computations to the user’s device. Rather than revealing transaction data to the network, the system generates cryptographic proofs locally before submitting them to the chain for verification, reducing the amount of visible transaction data while maintaining Ethereum’s security guarantees.
Client-side execution changes the way private transactions are processed
Central to the release is a client-side zero-knowledge execution engine integrated with Noir, Aztec’s domain-specific programming language for private smart contracts. Instead of performing confidential transactions through each network node, like the Ethereum Virtual Machine, the system performs private computations on user hardware before recursively generating Succinct Non-Interactive Arguments of Knowledge (SNARKs).
These proofs allow the network to verify that state changes are valid without exposing plaintext entries, transaction values, or account identities. According to Aztec Labs, the model reduces unnecessary data disclosure while maintaining mathematical guarantees that transactions were executed correctly.
The architecture also introduces a hybrid state model designed to overcome one of the biggest technical challenges facing privacy-focused blockchains. Purely private execution environments often struggle when multiple users try to update the same public status at the same time, creating state conflicts that limit interaction with shared decentralized financial infrastructure.
To address that limitation, Aztec separates private and public state management. Private assets are stored in UTXO-style nut trees, while public data is maintained via key-value trees. At runtime, private functions can generate deferred public function calls that are processed later within the same transaction lifecycle, allowing confidential and public operations to work together without sacrificing deterministic execution or creating race conditions.
The execution model is intended to support applications that require confidential computation while still interacting with Ethereum’s public ecosystem, including shared liquidity pools and other decentralized financial protocols.
The privacy model focuses on decentralized financial and business applications
In addition to transaction privacy, the execution layer introduces features that can alleviate some long-standing issues in blockchain execution.
According to Aztec Labs, transaction details remain hidden before the state commits, making it significantly more difficult for third-party observers to reorder pending transactions or exploit visible transaction data through Maximum Extractable Value strategies.
The architecture also provides building blocks for applications such as confidential order matching, private liquidity provision, and selective compliance systems that reveal only required information through key viewing rather than exposing entire user records.
These capabilities build on Aztec’s long-standing focus on programmable privacy rather than simple anonymous token transfers.
Zac Williamson, co-founder and CEO of Aztec Labs, told crypto.news in April 2025 that blockchain privacy should go beyond hiding wallet addresses.
He described user privacy, confidential transaction data, and the execution of private smart contracts as the three pillars necessary for practical on-chain privacy, calling them “the holy grail of blockchain privacy.”
Williamson also argued that privacy should not be treated as a separate segment of the industry, saying that “all crypto will be private” as programmable privacy becomes part of mainstream blockchain applications.
When discussing compliance, Williamson said privacy-preserving systems should rely on selective disclosure rather than complete anonymity. Citing ZKPassport as an example, he explained that users can tap an NFC Passport to generate a zero-knowledge proof and choose “what information you want to make public,” whether it’s nationality, age or other identity markers.
He said the technology is “permissionless, protects privacy and ensures strong compliance,” adding that such systems are “a lot more powerful” than existing privacy solutions because they combine privacy with programmable compliance.
That vision was further expanded in May 2026 when Aztec Labs acquired ZKPassport while pledging to keep the passport verification platform open source. The acquisition brought the privacy-focused identity infrastructure directly into Aztec’s ecosystem, allowing developers to combine programmable privacy with zero-knowledge identity authentication over Ethereum-compatible networks.
The technology had already been tested on Aztec’s network to help reduce Sybil attacks by allowing participants to prove they were unique individuals without revealing their identities. It was also used during the AZTEC token sale to screen sanctions while keeping participant information private.
The alpha release follows security incidents with older products
The execution layer arrives shortly after Aztec Labs addresses security issues related to products that had already been retired.
Earlier this month, Aztec Labs announced it was investigating a possible exploit involving an outdated payments product that launched in 2021 after about $2 million was transferred from an immutable smart contract. The company said the affected system was shut down in 2022 and was operating without administrator keys, preventing the team from pausing or upgrading the contract.
In addition, another legacy product, Aztec Connect, lost approximately $2.1 million after attackers exploited an old, immutable RollupProcessorV3 contract. Aztec Labs said the incidents were not related to the active Aztec network.
The Aztec Foundation also stated that neither exploit had any connection to the current network or the AZTEC ERC-20 token, emphasizing that the affected contracts belonged to existing infrastructure that remained live on Ethereum after the products were sunset.