Private transactions have been a long time in coming to public blockchains. While privacy tech isn’t new, it’s always been limited either in terms of scalability or the sort of assets it can support. It’s also been hampered by lack of cross-chain compatibility, constraining usage to mono-chain solutions.
Thankfully, privacy technology has come a long way from the days of zero-knowledge privacy coins that were only good for one thing. A new breed of protocols has emerged that allow consumers and enterprises alike to benefit from all the upside to blockchain without its achilles heel: exposing sensitive data for all the world to see. The following projects are ushering in a new era for confidential onchain transactions.
COTI
Digital payments network COTI has been reborn as an EVM L2 that solves the challenge of scalable blockchain privacy in an ingenious way. It uses Garbled Circuits, a technology that is 1,000x faster and 250x lighter than existing privacy solutions. It scales, in other words, allowing for high-volume payments and other transactions without adding a significant computational or cost burden.
Garbled Circuits rely on multi-party computation (MPC) to preserve private data. Their original implementation was unsuited to blockchain usage but thanks to years of research by Dr. Avishay Yanai and his team at Soda Labs, a breakthrough has been achieved that is more efficient than any current privacy solution on the market. The new-look COTI retains its community and native token but is taking shape on a new L2 where sensitive financial data can be transmitted privately.
Namada
Namada has mastered a privacy solution that has long been sought: shielded multi-asset transactions. Not just fungible tokens, but NFTs too, and not just on one chain but throughout the multi-chain ecosystem. Developed by Anoma Foundation, Namada enables a diverse range of assets to be transferred privately across EVM and Cosmos blockchains and, following extensive development and testing, rumors are saying that mainnet is about to launch.
What’s unique about Namada is that its modular shielding layer can be retrofitted to existing assets, blockchains, and dapps. Thus, protocols that are public by default – which is virtually all of them – can introduce optional privacy features that will benefit all cross-chain users. Users have full control over which assets they share and which they keep private, allowing data to remain confidential when using chains such as Cosmos and Ethereum.
Fhenix
Fhenix, a confidentiality-enabling Layer 2 blockchain, uses Fully Homomorphic Encryption (FHE) – hence the “Fhe” in its name – to bring private transactions to Ethereum. What’s unique about FHE is that it allows calculations to be performed on encrypted data without having to decrypt it first, which opens the door to a host of innovative use cases. ML models can be trained using encrypted datasets, for instance, overcoming data-sharing restrictions while allowing AI development to flourish.
Within the DeFi industry, FHE allows transaction data to be obfuscated and there’s even utility for public DAOs, where confidential voting and discreet proposals are now possible. FHE has the potential to be a genuine game-changer for blockchain privacy and Fhenix is flying the flag for its adoption.
TEN
TEN is on a mission to bring encryption to the Ethereum ecosystem so that EVM users can benefit from the many advantages private transactions offer. Developed by the team behind R3 Corda, TEN operates as a Layer2 that leverages a unique Proof of Block Inclusion (POBI) protocol. TEN encrypts blockchain transactions using Secure Enclaves. This technology provides strong confidentiality guarantees with certainty over the code running.
Thanks to Secure Enclaves, TEN can support smart contracts while maintaining decentralization and scalability. Its L2 uses Confidential roll-ups, a modified type of roll-up derived from those in use on L2s such as Optimism and zkSync. This allows TEN to retain the performance and programming model simplicity of Optimistic roll-ups and deploy them on an L2 with short withdrawal periods. In other words, TEN retains everything that’s good about EVM chains but adds in much-needed privacy without impairing the developer or user experience.
INTMAX
INTMAX is a Layer 2 zkRollup that uses stateless architecture to provide an efficient, secure, and scalable solution for asset transfers. Built on the principle of statelessness, which means all the calculations and data preservations are done on the client side INATMAX is one of the most efficient native Ethereum L2 solutions. By leveraging a mere 5 bytes of on-chain information, INTMAX cuts the typical computational and storage overhead found in traditional blockchain systems.
INTMAX achieves at least 100,000 transfers per second on Ethereum, parallelization up to the number of users. INTMAX Inherited security of ETH and provides advanced privacy, because INTMAX hosts only 5 bytes information on-chain, block producers don’t receive transactions history, and in general the only thing that block producers and aggregators do is producing blocks and trees.
It is focused on bringing scalable private payments to the mass market. With transaction fees that are close to zero, and strong decentralization, INTMAX has a lot going for it. If onchain private payments become a mainstay of web3, INTMAX is primely placed to provide the infrastructure that will make this vision a reality.
The bottom line
Thanks to the efforts of projects such as the five featured above, onchain privacy is no longer unworkable. Not only are confidential transactions now possible across a multitude of EVM chains, but they can be achieved without incurring major trade-offs in the process. As a result, web3 users can transact publicly while keeping their financial data private.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
