0xbow has launched the "Privacy Pool", a new Blockchain privacy tool based on research from Vitalik Buterin.

Source: The Block

0xbow has announced the launch of a new tool designed to help users protect their on-chain privacy while complying with the law.

The tool, called Privacy Pools, was inspired by a 2023 research paper co-authored by Vitalik Buterin and other security experts.

A group of cryptographers, including Ethereum veterans Ameen Soleimani and Zak Cole, have launched this new tool to enhance on-chain privacy. According to the announcement on X, the first proposal to propose a privacy pool was launched in 2023 and officially launched on mainnet on Monday.

The privacy pool is a hybrid network system that uses zero-knowledge proofs and an "Association Set Provider" to ensure that only "clean" funds enter the pool. Its purpose is to provide privacy protection for everyday crypto users while maintaining compliance.

The system was developed by 0xbow, a company that has built the necessary infrastructure and wallets to support private transactions on public blockchains such as Ethereum. 0xbow is backed by Bankless, Number Group, Public Works, and a number of angel investors, including Ethereum co-founder Vitalik Buterin.

"Privacy pools are a product of how we can take privacy back from terrorists," Soleimani told The Block in a direct message. "The privacy pool is based on the work of the Tornado Cash team's compliance tool, which has been iterated and now allows users to publicly detach and segregate from non-legitimate funds without revealing specific deposits. Privacy for the good guys. ”

Users can access ERC-20 tokens privately using zero-knowledge proofs, while associated pool providers ensure compliance by reviewing funds. The process involves connecting with wallets compatible with networks like Ethereum or Layer 2 Gnosis, creating a dedicated 0xbow wallet, depositing funds into the pool, and withdrawing to a new protected address.

Unlike previous mixers such as Tornado Cash, privacy pools can have associated set providers who maintain a list of sanctioned or suspicious accounts. 0xbow or other entities can act as gatekeepers to prevent illicit funds from entering the mixing pool.

The protocol of 0xbow originated from a 2023 paper co-authored by Buterin, Chainalysis researcher Jacob Illum, and scholars Matthias Nadler and Fabian Schar. Some ideas from this paper have been adopted by several projects, including Railgun, which has played an important role in preventing zKLend attackers from laundering stolen funds.

"This is just the beginning, the road to normalizing privacy recovery is long and exciting, and we cannot do it alone!" 0xbow wrote in its announcement.