The problem ZK-Setu solves

Trust in Fiat-Crypto Transactions: Establishes a trust layer for users transacting crypto for fiat, addressing concerns around payment verification and order fulfillment.

Escrow-Driven Security: Uses an escrow contract to securely hold USDC until payment verification, ensuring funds aren’t released prematurely.

Efficient Payment Verification: Integrates with a payment aggregator to confirm fiat payment, eliminating the need for manual verification and reducing fraud risk.

User-Friendly Interface for Proof Submission: Provides a straightforward UI where buyers can upload proof of payment, streamlining the verification process.

Challenges we ran into

Implementing Proof Verification on the Aligned Layer: Creating a robust proof verification system on the aligned layer was complex, requiring compatibility with different payment formats and document types.

Securing User Data in the Verification Process: Ensuring user data and transaction details remain secure during the proof submission and verification stages posed technical and compliance challenges.

Smooth Integration with Payment Aggregator: Integrating the payment aggregator for seamless, accurate payment confirmations demanded careful API alignment and error handling.

User Experience Design for Escrow and Proof Submission: Balancing escrow security with a user-friendly interface required iterative testing and optimization to make the process intuitive yet secure.