Privacy Correction

The reason why Crypto Assets make everything open and transparent is very simple.

If everyone can see all the information, then no one can lie to escape. A public ledger means that exchanges cannot fabricate reserves, decentralized autonomous organizations (DAOs) cannot quietly misappropriate funds, and whales cannot pretend that they have never sold any assets.

These are precisely the pain points in traditional markets and the problems that Crypto Assets aim to solve. It does address some of those issues. But as Byron Gilliam of Blockworks quoted Kevin Kelly this week, “Most of the problems we face today are caused by the solutions we found in the past.” The solution of Crypto Assets is complete transparency, but in a market built on anonymous addresses, this solution rarely completely resolves the issues.

This design is effective for institutions that standardize and audit transactions. However, when it is realized that the same solution would turn the financial lives of every retail investor into a permanently public information stream, its effectiveness is greatly diminished.

Crypto Assets integrate all our financial scenarios, including receiving payments, transactions, donations, and various experiments, into a transparent wallet.

In recent months, the tension has become impossible to ignore as courts and regulatory agencies continue to crack down on privacy infrastructure. On Wednesday, November 19, a U.S. district judge sentenced two co-founders of Samourai Wallet, a Bitcoin wallet with a built-in coin mixing tool, to 5 and 4 years in prison, respectively. They were found guilty of operating an unlicensed remittance business and handling over $237 million in criminal proceeds.

In August of this year, a U.S. jury failed to reach a consensus on money laundering and sanctions charges against Roman Storm, the founder of the Crypto Assets mixer company Tornado Cash. However, the jury found him guilty of conspiracy to operate an unlicensed money transmitting business and sentenced him to a maximum of five years in prison.

In Europe, new anti-money laundering regulations will prohibit the use of privacy coins like Monero and Zcash on EU-regulated platforms starting from July 1, 2027. The message conveyed is that anonymous coins are unwelcome.

However, within the market, users are doing the completely opposite thing.

In today's in-depth analysis, I will explain why this is not just a wave of “privacy coin speculation,” but a sign that Crypto Assets are trying to fix their transparency flaws.

Now let's get to the point.

The establishment of public blockchains is based on the assumption that if transparency helps to detect fraud, then greater transparency benefits everyone.

In this design, each wallet address breaks down the barriers between your financial identities. On the blockchain, your income, your “degen” side addicted to various Meme coins, long-term investments, and random experiments are all recorded in the same ledger, and anyone who can associate that address with your real identity can see it.

Anthropology professor Michael Wesch refers to this phenomenon on social media as “context collapse,” in which family, colleagues, strangers, close friends, and acquaintances are compressed into a single audience group. We have all experienced moments like this: an embarrassing moment when a vacation selfie, originally intended to be shared with just a dozen people, ends up in the boss's feed, right? Only on the blockchain, the consequences could be a massive economic loss.

Once your information address is leaked, there is no room for maneuver. All the details of your Crypto Assets, activity logs, and adventurous behaviors may be permanently searchable on the block explorer.

Don't waste your thoughts on how you could be doxxed. The reasoning is obvious. Once blockchain users interact with platforms or dApps that are regulated by KYC, the user's anonymous identity may be linked to an account that has completed KYC verification. Tracking the clues is not difficult.

Recent legal events have caused users to worry about the erosion of privacy, prompting them to rely more on protocols that can address the transparency issues of Crypto Assets code.

The recent performance of privacy protocols demonstrates that users are supporting privacy protection with their actions. Despite the decline in prices in Wall Street and the crypto assets market, funds and users are flowing into the privacy protection field, including the continuously growing fund pool of Zcash, the private DeFi suite on Railgun, and Starknet's Ztarknet experimental project.

This is most evident in the rebirth of Zcash.

For more than seven years, despite the high academic value of the white paper, Zcash has been almost forgotten in business. Its idea is solid: by hiding the sender, receiver, and transaction amount, it protects transaction security while ensuring that the network can verify and that there are no tokens generated out of thin air.

It uses zero-knowledge proofs (ZK proofs): one party (the prover) can prove to another party (the verifier) that a statement (in this case, a transaction) is valid without revealing any information other than its validity.

At that time, not many people took it seriously.

These numbers have risen significantly. In just the past two months, the price of Zcash (the native token of ZEC) has increased tenfold, reaching its highest level in over seven years. Approximately 4.9 million ZEC (about 30% of the circulating supply) are held in crypto asset pools, setting a new historical high and significantly up from the beginning of the year.

What has changed? Abstraction.

As early as the beginning of 2018, the interface of the Zashi wallet was not user-friendly. Today, the Zashi wallet has made up for this shortcoming. Zashi encapsulates ZEC in a mobile application, providing a unified address and one-click shielding feature. It also ensures that your ZEC will not be locked in a single location. By integrating with NEAR's Intents system, Zashi allows you to treat the shielded ZEC as a cross-chain private savings account.

NEAR Intents is a cross-chain routing tool that simplifies the token transfer process. It transforms the user’s question from “How do I get from here to there?” to “This is what I want, you help me solve it.” Users no longer need to struggle to find paths through bridges and decentralized exchanges (DEX); they just need to specify the desired outcome, and NEAR's solver network will search in liquidity venues and return the best path to execute the user's request.

Since its launch at the end of 2024, NEAR Intents has processed approximately $6.2 billion in transaction volume, with nearly $9 million in accumulated fees ($11 million) earned in the past two months.

When Zashi runs on top of Zcash, your principal balance can be kept in the Zcash shielded pool, while NEAR Intents is responsible for handling the complex cross-chain infrastructure. The target chain can only see the final transfer records. Your other information, including historical transaction logs, other holdings, and activities, will not be leaked outside the private space.

Zcash has built a private base layer, while Railgun embeds private collections into Ethereum itself.

The Railgun smart contract system employs a zero-knowledge proof to hide balances and transaction paths while maintaining composability. Users can deposit funds into Railgun's shielded fund pool and interact privately with DeFi protocols within the pool through methods such as swapping, lending, or providing liquidity, while only deposit and withdrawal information is made public.

As of October, Railgun has processed approximately $4 billion in private transactions since its launch in 2021, with around $1.6 billion contributed in the year 2025 alone.

Railgun provides DAO and professional trading teams with the value of Zashi for individuals: allowing institutional-level DeFi strategies to operate completely out of the public eye, while still remaining on Ethereum.

Starknet further pushes this model to higher layers of the stack.

It once tried Ztarknet, combining Starknet's ZK proofs with Zcash's vault.

Last month, a proposal on the Zcash community forum outlined a Starknet-style L2 that can execute programs off-chain while providing on-chain proofs.

Imagine a scenario where all complex activities are conducted off-chain, Starknet generates a proof that everything has been completed correctly, and Zcash simply verifies that proof and updates the balance.

ZEC continues to function as a coin, Zcash maintains its strong privacy properties, while Starknet adds speed and programmability on top of that.

All of these projects—Zashi, NEAR Intents, Railgun, Starknet, and Ztarknet—share the same goal: to meet the market's demand for a world where activity and identity are completely separated, leaving no traces.

Of course, none of them come without a cost.

Technical risks are always present. With each additional layer of intention, rollup, or shielded set, there is more code that can potentially go wrong. Vulnerabilities in routers or validation systems may leak information you thought was hidden or trap assets in circuits that no one can safely unlock.

In addition, there are also risks related to social and user experience. Crypto Assets have been striving for years to gamify on-chain activities, rewarding users through airdrops, points, loyalty programs, and activities like “prove you used X.” If more user activities shift to private spaces, the social interaction aspect will become incomplete.

How should ordinary users cope with all these changes?

First, you need to ask yourself what kinds of harm the collapse of context might cause, and then decide which contexts need protection. For some people, this may mean investment; for others, it may mean having the right to trade without letting bad transactions permanently tarnish their online identity.

Zcash wallet with view keys, intent-based routers, private collections on Ethereum, or Rollups that only hide positions without hiding the market—each of these addresses different aspects of the problem and comes with its own set of risks.

Crypto Assets solve the problem of information centralization in traditional markets through a public ledger. It makes it more difficult to falsely report reserves and easier to detect fraudulent activities. Additionally, it integrates all financial information into a globally searchable information stream. The rise of these protocols is precisely aimed at correcting this issue.

If they continue to maintain this momentum, they will prove that privacy and accountability do not have to be mutually exclusive; you can add a few doors without tearing down the house.