InfoFi Trinity "Mouth-Looting" Guide: Kaito, Cookie, and Galxe
Over the past week, the cryptocurrency market has been sluggish, but "mouth-looting" has gained attention as a new way to participate. This article focuses on the three major "mouth-looting" projects: Kaito, Cookie, and Galxe. In the past week, the market has been in a tug-of-war, with the overall cryptocurrency market falling into a slump. Both price performance and community discussion热度 have been as stagnant as a dead pool. However, in this silence, a new way of participation has increasin...
The Quiet End of an Era: How Wallets Lost the Battle for Traffic to CEXs
An era has quietly come to an end. Wallets, as standalone products, seem to have reached their twilight. Struggling with profitability, they are increasingly being acquired or integrated by centralized exchanges (CEXs) or traditional fintech giants, becoming mere components of larger ecosystems—such as stablecoin payments—rather than the focal point of industry development.The Decline of Standalone WalletsFor entrepreneurs in the space, persistence has become a virtue in itself. The goal? Sur...
Impact of SynFutures' Entry into AI Agents
From SynFutures to AI Agents: A New Era for DeFAI The product form of AI Agents is more suited to appear as embedded service middleware, which helps to bring the trading experience back to the simplicity and intuitiveness of Web2. The revival of the AI Agent track will not be driven by "CA engineers" who excel in performance, but by "product engineers" who focus on practical implementation. In the midst of a market sentiment storm caused by the collective failure of on-chain PVP leaders and t...
<100 subscribers
InfoFi Trinity "Mouth-Looting" Guide: Kaito, Cookie, and Galxe
Over the past week, the cryptocurrency market has been sluggish, but "mouth-looting" has gained attention as a new way to participate. This article focuses on the three major "mouth-looting" projects: Kaito, Cookie, and Galxe. In the past week, the market has been in a tug-of-war, with the overall cryptocurrency market falling into a slump. Both price performance and community discussion热度 have been as stagnant as a dead pool. However, in this silence, a new way of participation has increasin...
The Quiet End of an Era: How Wallets Lost the Battle for Traffic to CEXs
An era has quietly come to an end. Wallets, as standalone products, seem to have reached their twilight. Struggling with profitability, they are increasingly being acquired or integrated by centralized exchanges (CEXs) or traditional fintech giants, becoming mere components of larger ecosystems—such as stablecoin payments—rather than the focal point of industry development.The Decline of Standalone WalletsFor entrepreneurs in the space, persistence has become a virtue in itself. The goal? Sur...
Impact of SynFutures' Entry into AI Agents
From SynFutures to AI Agents: A New Era for DeFAI The product form of AI Agents is more suited to appear as embedded service middleware, which helps to bring the trading experience back to the simplicity and intuitiveness of Web2. The revival of the AI Agent track will not be driven by "CA engineers" who excel in performance, but by "product engineers" who focus on practical implementation. In the midst of a market sentiment storm caused by the collective failure of on-chain PVP leaders and t...
Share Dialog
Share Dialog
On April 1, the on-chain privacy infrastructure 0xbow announced the official launch of the mainnet for its privacy pool, "Privacy Pools." Drawing on research by Ethereum co-founder Vitalik Buterin and others, Privacy Pools offers Ethereum users a coin-mixing solution that protects on-chain privacy while distancing funds from illicit activities.
This article will introduce the concept, origin, development team, operating mechanism, and potential industry impact of Privacy Pools.
What Are Privacy Pools?
Privacy Pools are a new type of blockchain privacy tool designed to enable users to conduct anonymous transactions while ensuring the compliance of their funds' origins.
Unlike traditional mixing services (such as Tornado Cash), Privacy Pools use zero-knowledge proofs (ZKP) and the design of "association set providers" (ASPs) to protect user privacy while preventing illicit funds from entering the transaction pool.
This mechanism meets the privacy needs of ordinary users while responding to regulatory requirements for compliance, offering the DeFi ecosystem a viable path that balances privacy and legality.
Who Proposed Privacy Pools? Who Launched Them?
The concept of Privacy Pools originated from a research paper co-authored in 2023 by Vitalik Buterin, Jacob Illum (chief scientist at Chainalysis), Matthias Nadler (Ph.D. candidate at the University of Basel), Fabian Schär (professor at the Center for Innovative Finance at the University of Basel), and Ameen Soleimani (Privacy Pools).
This paper explored how to achieve a balance between privacy and compliance on the blockchain, proposing a new type of privacy-enhancing protocol based on smart contracts called Privacy Pools. It explained how privacy pool technology can act as a neutral infrastructure, enabling public blockchains to meet regulatory requirements across jurisdictions.
The Privacy Pools protocol was launched by the 0xbow team. 0xbow is a startup project focused on blockchain privacy and compliance infrastructure. The main team members include:
Co-founder Zak Cole: Also the co-founder of the BTCFi project corn, managing partner of Number Group, and author of EIP-6968.
Strategic advisor Ameen Soleimani: Also the co-founder of Reflexer Finance and IranUnchained, and has worked at ConsenSys, Filter, and other companies.
The project's investors include Number Group, Vitalik, BanklessVC, Public Works, and several angel investors.
After the mainnet launch of Privacy Pools, both Vitalik and Ethereum core developer Tim Beiko deposited 1 ETH into the privacy pool as a show of support.
How Do Privacy Pools Work?
The architecture of Privacy Pools consists of three layers: the contract layer, the zero-knowledge layer, and the association set provider (ASP) layer. The contract layer manages assets and states, the zero-knowledge layer ensures privacy, and the ASP layer provides compliance functionality.
Specifically, zero-knowledge proofs allow users to prove that they belong to a set of approved depositors without revealing their full transaction history.
The ASP acts as a compliance layer tool, approving deposits that meet predefined criteria and verifying that all private withdrawals come only from approved deposits. The ASP consists of two parts:
Service Stack: A set of modular services that continuously monitor, record, and classify on-chain activities, assessing users' credibility based on their on-chain behavior.
On-Chain Instances: Including a public registry and a zero-knowledge proof verifier. The public registry stores and manages ASP data via smart contracts, enabling seamless integration with blockchain protocols; the ZKP verifier is responsible for verifying zero-knowledge proofs, ensuring that the compliance verification process of transactions remains private.
The ASP's operating mechanism involves continuously monitoring on-chain transactions and regularly updating the "association set." Users can generate zero-knowledge proofs (ZKP) to prove that their transactions belong to the compliant set without disclosing specific transaction details. Developers can use the ASP to define rule-based access control, filtering user eligibility (such as excluding users related to illegal activities), thereby achieving a balance between privacy and compliance.
Interpreting Vitalik's Investment in Privacy Pools: Can On-Chain Privacy and Compliance Be Reconciled?
Privacy Pools allow users to encrypt transactions through a mixing protocol while still proving that their funds come from legitimate sources. The specific operating process is as follows:
Connecting Wallets and Creating Dedicated Wallets: Users connect to the Privacy Pools system via a compatible wallet and create a dedicated 0xbow wallet (this wallet is only used for the privacy pool).
Depositing: Deposit ETH into the privacy pool. The initial version supports a maximum deposit limit of 1 ETH and a minimum of 0.1 ETH. After depositing funds, the 0xbow ASP will review the source of the funds. If these funds are not from illegal activities, they will be accepted into the association set. Once the transaction is confirmed, the deposited funds become part of the anonymity set. The deposit will appear in the Privacy Pools smart contract.
Withdrawing: Specify the address to receive the funds. The dApp will automatically generate a zero-knowledge proof in the user's browser. After confirmation, the withdrawal transaction is completed, and the funds are transferred to the specified address.
It is worth noting that since the ASP continuously updates its rules, initially approved deposits may be disqualified. This means that even if users pass the initial screening, they may still be prohibited from withdrawing funds.
Summary
The launch of Privacy Pools offers users a tool that balances privacy and compliance, potentially encouraging more institutions and businesses to adopt blockchain technology.
By isolating illicit funds, Privacy Pools can help alleviate regulatory pressure on the industry, clearing obstacles to a certain extent. Moreover, other privacy protocols can integrate the ASP mechanism to enhance their compliance, promoting the standardization of privacy technologies. Of course, ordinary users can also participate in on-chain activities in a safer and more compliant manner, redefining the "norm" of blockchain privacy.
However, the road to success for Privacy Pools is still fraught with many challenges, including the credibility of ASPs, the boundaries of centralized review by ASPs, regulatory adaptability across different jurisdictions, and the attitudes of regulatory authorities.
On April 1, the on-chain privacy infrastructure 0xbow announced the official launch of the mainnet for its privacy pool, "Privacy Pools." Drawing on research by Ethereum co-founder Vitalik Buterin and others, Privacy Pools offers Ethereum users a coin-mixing solution that protects on-chain privacy while distancing funds from illicit activities.
This article will introduce the concept, origin, development team, operating mechanism, and potential industry impact of Privacy Pools.
What Are Privacy Pools?
Privacy Pools are a new type of blockchain privacy tool designed to enable users to conduct anonymous transactions while ensuring the compliance of their funds' origins.
Unlike traditional mixing services (such as Tornado Cash), Privacy Pools use zero-knowledge proofs (ZKP) and the design of "association set providers" (ASPs) to protect user privacy while preventing illicit funds from entering the transaction pool.
This mechanism meets the privacy needs of ordinary users while responding to regulatory requirements for compliance, offering the DeFi ecosystem a viable path that balances privacy and legality.
Who Proposed Privacy Pools? Who Launched Them?
The concept of Privacy Pools originated from a research paper co-authored in 2023 by Vitalik Buterin, Jacob Illum (chief scientist at Chainalysis), Matthias Nadler (Ph.D. candidate at the University of Basel), Fabian Schär (professor at the Center for Innovative Finance at the University of Basel), and Ameen Soleimani (Privacy Pools).
This paper explored how to achieve a balance between privacy and compliance on the blockchain, proposing a new type of privacy-enhancing protocol based on smart contracts called Privacy Pools. It explained how privacy pool technology can act as a neutral infrastructure, enabling public blockchains to meet regulatory requirements across jurisdictions.
The Privacy Pools protocol was launched by the 0xbow team. 0xbow is a startup project focused on blockchain privacy and compliance infrastructure. The main team members include:
Co-founder Zak Cole: Also the co-founder of the BTCFi project corn, managing partner of Number Group, and author of EIP-6968.
Strategic advisor Ameen Soleimani: Also the co-founder of Reflexer Finance and IranUnchained, and has worked at ConsenSys, Filter, and other companies.
The project's investors include Number Group, Vitalik, BanklessVC, Public Works, and several angel investors.
After the mainnet launch of Privacy Pools, both Vitalik and Ethereum core developer Tim Beiko deposited 1 ETH into the privacy pool as a show of support.
How Do Privacy Pools Work?
The architecture of Privacy Pools consists of three layers: the contract layer, the zero-knowledge layer, and the association set provider (ASP) layer. The contract layer manages assets and states, the zero-knowledge layer ensures privacy, and the ASP layer provides compliance functionality.
Specifically, zero-knowledge proofs allow users to prove that they belong to a set of approved depositors without revealing their full transaction history.
The ASP acts as a compliance layer tool, approving deposits that meet predefined criteria and verifying that all private withdrawals come only from approved deposits. The ASP consists of two parts:
Service Stack: A set of modular services that continuously monitor, record, and classify on-chain activities, assessing users' credibility based on their on-chain behavior.
On-Chain Instances: Including a public registry and a zero-knowledge proof verifier. The public registry stores and manages ASP data via smart contracts, enabling seamless integration with blockchain protocols; the ZKP verifier is responsible for verifying zero-knowledge proofs, ensuring that the compliance verification process of transactions remains private.
The ASP's operating mechanism involves continuously monitoring on-chain transactions and regularly updating the "association set." Users can generate zero-knowledge proofs (ZKP) to prove that their transactions belong to the compliant set without disclosing specific transaction details. Developers can use the ASP to define rule-based access control, filtering user eligibility (such as excluding users related to illegal activities), thereby achieving a balance between privacy and compliance.
Interpreting Vitalik's Investment in Privacy Pools: Can On-Chain Privacy and Compliance Be Reconciled?
Privacy Pools allow users to encrypt transactions through a mixing protocol while still proving that their funds come from legitimate sources. The specific operating process is as follows:
Connecting Wallets and Creating Dedicated Wallets: Users connect to the Privacy Pools system via a compatible wallet and create a dedicated 0xbow wallet (this wallet is only used for the privacy pool).
Depositing: Deposit ETH into the privacy pool. The initial version supports a maximum deposit limit of 1 ETH and a minimum of 0.1 ETH. After depositing funds, the 0xbow ASP will review the source of the funds. If these funds are not from illegal activities, they will be accepted into the association set. Once the transaction is confirmed, the deposited funds become part of the anonymity set. The deposit will appear in the Privacy Pools smart contract.
Withdrawing: Specify the address to receive the funds. The dApp will automatically generate a zero-knowledge proof in the user's browser. After confirmation, the withdrawal transaction is completed, and the funds are transferred to the specified address.
It is worth noting that since the ASP continuously updates its rules, initially approved deposits may be disqualified. This means that even if users pass the initial screening, they may still be prohibited from withdrawing funds.
Summary
The launch of Privacy Pools offers users a tool that balances privacy and compliance, potentially encouraging more institutions and businesses to adopt blockchain technology.
By isolating illicit funds, Privacy Pools can help alleviate regulatory pressure on the industry, clearing obstacles to a certain extent. Moreover, other privacy protocols can integrate the ASP mechanism to enhance their compliance, promoting the standardization of privacy technologies. Of course, ordinary users can also participate in on-chain activities in a safer and more compliant manner, redefining the "norm" of blockchain privacy.
However, the road to success for Privacy Pools is still fraught with many challenges, including the credibility of ASPs, the boundaries of centralized review by ASPs, regulatory adaptability across different jurisdictions, and the attitudes of regulatory authorities.
No comments yet