Crypto Market Update: Ethereum Unveils Zero-Knowledge AI Privacy Payment Model

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Ethereum developers are proposing a deposit-based system to address these concerns: After a user funds a smart contract once, they make thousands of private API calls. This way, providers can confirm that each request draws from deposited funds, and the user does not reveal their identity during every interaction.

Zero-knowledge cryptography allows users to prove payment validity without exposing personal data. The model includes a tool called Rate-Limit Nullifiers. This system allows anonymous requests while detecting rule violations, with each request receiving a ticket index tied to the deposit.

Users must generate a ZK-STARK proof for every call. The proof shows that funds support the request and confirms any refund owed. A unique nullifier would prevent the reuse of the same ticket, exposing double-spending attempts immediately.

Refund logic remains built into the system as AI queries vary in cost. Users can recover their unused funds, and providers can maintain payment assurance at the same time. 

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