Drop the term “asset-agnostic privacy” into dinner party conversation, and your guests will gaze at you in bewilderment. Even in crypto circles, where the phrase originates, it’s hardly something that everyday users know. But such is to be expected of nascent tech whose transformative potential has yet to be realized. So what exactly is asset-agnostic privacy, and what benefits does it bring blockchain users?
Houston, we have a bridge problem
It’s no secret that blockchain bridges, how assets move between chains, are a weak point. Billions of dollars have been exfiltrated by hackers exploiting weaknesses in bridge architecture. But what’s less known is the other hazards that bridging presents, particularly regarding privacy.
When moving tokens between chains, few working solutions preserve the details of the transaction to observers while maintaining its fidelity.
Numerous networks and protocols support private transactions. However, this cloak of protection is whipped away at the point of exiting the network and moving assets to a second chain. In the process, all the privacy benefits accrued on the source network are effectively undone.
For true onchain privacy to be obtained, it needs to take the form of an end-to-end solution. This includes bridges, the point at which all of the data corresponding to a transaction are exposed for all the world to see.
This is a feature, not a bug: transparency is critical when making intra-chain transfers since there needs to be complete certainty that the tokens have been locked or burned on the source chain before they can be issued on the destination chain.
The problem with this approach for users who desire – or require – privacy – is that it leaves all of their financial data out in the open. The solution arrives in asset-agnostic privacy, a system for guaranteeing transactional privacy – regardless of the transferred asset.
Intra-chain privacy-as-a-service
Because web3 is scattered across many chains and protocols, it’s become apparent that extant privacy solutions must be more suitable. A universal privacy technology is required to cloak sensitive financial information, like the value of moving tokens, regardless of where they’re being sent and by whom.
The first implementation of this concept comes in the form of Namada, a proof-of-stake (PoS) protocol for multichain asset-agnostic privacy. Developed by Anoma, Namada utilizes zero-knowledge proofs (ZKPs), enabling all assets to share one shielded set. This applies to fungible and non-fungible tokens, allowing everything from stablecoins to CryptoPunks to be transferred with external observers who are none the wiser about what’s being sent.
What’s novel about Namada isn’t the use of ZKPs, which are now widespread throughout the industry, but its ability to support two-way connections to as many chains as possible. This means that assets created on Ethereum, ZCash, Cosmos, and other Inter-Blockchain Communication (IBC)-compatible chains can benefit from Namada’s privacy. For the first time, a composable multichain solution can keep asset transfers private wherever they move within web3.
People demand private bridges
Existing Ethereum bridges don’t support ZKP-based privacy technology, so they can’t be readily retrofitted with the ability to support shielded transactions. Instead, Namada will incorporate a trustless two-way Ethereum bridge designed for this express purpose.
Like any blockchain bridge, Namada’s implementation must demonstrate its efficacy, not just on a speed and cost basis, but from a security perspective. If this can be achieved, users can privately move assets between Ethereum and IBC-compatible chains for the first time.
The proposal for a strategic alliance between Namada and Zcash, complete with a shielded airdrop, has been floated. The former is intent on building bridges between privacy protocols, old and new. Speaking of bridges, its trustless Ethereum bridge will hold the key to everything Namada offers on the many chains its protocol will ultimately support.
These are lofty goals with a high technical barrier. However, if Namada achieves them, asset-agnostic privacy will enter the lingua franca of blockchain. Doing so will usher in private transactions for everyone – wherever their assets are headed.
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