Confidential Transactions Empowered by Five Privacy-Focused Blockchains

Private transactions have been a highly anticipated feature on public blockchains for quite some time. However, up until recently, privacy technology has been limited in terms of scalability and the types of assets it can support. Additionally, the lack of cross-chain compatibility has hindered its usage to mono-chain solutions.

Fortunately, privacy technology has made significant advancements, moving beyond the days of zero-knowledge privacy coins that served only one purpose. A new generation of protocols has emerged, allowing both consumers and enterprises to enjoy the benefits of blockchain without the drawback of exposing sensitive data to the public. The following projects are paving the way for confidential onchain transactions.

COTI, a digital payments network, has undergone a transformation as an EVM L2 solution that tackles the challenge of scalable blockchain privacy in a clever manner. It employs Garbled Circuits, a technology that is 1,000 times faster and 250 times lighter than existing privacy solutions. In essence, it provides scalability, enabling high-volume payments and transactions without imposing significant computational or cost burdens.

Garbled Circuits rely on multi-party computation (MPC) to safeguard private data. While the original implementation was not suitable for blockchain usage, Dr. Avishay Yanai and his team at Soda Labs have conducted extensive research, resulting in a breakthrough that is more efficient than any other privacy solution currently available. The revamped COTI platform retains its community and native token, but now operates on a new L2 where sensitive financial data can be transmitted privately.

Namada has achieved a long-sought-after privacy solution: shielded multi-asset transactions. This includes not only fungible tokens but also non-fungible tokens (NFTs) across various EVM and Cosmos blockchains. Developed by the Anoma Foundation, Namada allows a wide range of assets to be transferred privately. The modular shielding layer of Namada can be retrofitted to existing assets, blockchains, and decentralized applications (dapps). As a result, protocols that are public by default can introduce optional privacy features that benefit cross-chain users. Users have full control over which assets they share and which they keep private, ensuring data confidentiality when utilizing chains like Cosmos and Ethereum.

Fhenix, a Layer 2 blockchain focused on confidentiality, employs Fully Homomorphic Encryption (FHE) to enable private transactions on Ethereum. FHE is unique in that it allows calculations to be performed on encrypted data without the need to decrypt it first. This opens up possibilities for various innovative use cases, such as training machine learning models using encrypted datasets, overcoming data-sharing restrictions, and promoting AI development. FHE also offers benefits within the decentralized finance (DeFi) industry, allowing transaction data to be obfuscated and enabling confidential voting and discreet proposals in public decentralized autonomous organizations (DAOs). Fhenix is at the forefront of advocating for the adoption of FHE as a game-changer for blockchain privacy.

TEN is dedicated to bringing encryption to the Ethereum ecosystem, enabling EVM users to enjoy the advantages of private transactions. Developed by the team behind R3 Corda, TEN operates as a Layer 2 solution utilizing a unique Proof of Block Inclusion (POBI) protocol. TEN encrypts blockchain transactions using Secure Enclaves, a technology that guarantees strong confidentiality with certainty over the running code. By leveraging Confidential roll-ups, a modified version of roll-ups used on Layer 2 solutions like Optimism and zkSync, TEN maintains the performance and programming simplicity of Optimistic roll-ups while providing privacy. In other words, TEN combines the positive aspects of EVM chains with much-needed privacy enhancements, without compromising the developer or user experience.

INTMAX is a Layer 2 zkRollup solution that employs a stateless architecture to offer an efficient, secure, and scalable asset transfer solution. By utilizing statelessness, INTMAX significantly reduces the computational and storage overhead typically associated with traditional blockchain systems. It achieves a minimum of 100,000 transfers per second on Ethereum, with parallelization capabilities based on the number of users. INTMAX prioritizes security and advanced privacy, as it only hosts 5 bytes of information on-chain, ensuring that block producers do not receive transaction history. Its focus is to bring scalable private payments to the mass market, with low transaction fees and strong decentralization.

Thanks to the efforts of the aforementioned projects, onchain privacy is now a feasible option. Confidential transactions can be conducted across multiple EVM chains without significant trade-offs. As a result, web3 users can engage in public transactions while keeping their financial data private.

Disclaimer: The content provided in this article should not be considered investment advice. Investing in cryptocurrencies carries inherent risks, and your capital is at risk.