The State Of Privacy On NEAR Protocol
Web3 promises to create a decentralized version of the internet that empowers users to own and control their own data — but how will Web3 address online privacy? Web2 users are concerned about privacy, and services like VPNs, privacy browsers, and encrypted messaging apps are growing in popularity. Those users will demand nothing less from Web3. DeFi now attracts billions of dollars in total value locked, making privacy and security more important than ever. And for institutional investors, lack of regulatory compliant privacy is often the barrier to entry for DeFi’s lucrative yields. Clearly, Web3 must provide privacy solutions that are as good or better than Web2 and TradFi alternatives.
Blockchain is not private
Unfortunately, the blockchain technology that underpins Web3 is not intrinsically private, offering pseudonymous but not anonymous transactions. This is well understood by the NEAR team, but rather than offer privacy-by-design like dedicated privacy blockchains, they have instead created a great environment for privacy projects to flourish.
“Blockchain right now is not a privacy engine; it’s a transparency engine. It creates transparency — that’s how we have DAOs and consensus — but at the same time, there needs to be privacy.” — Illia Polysukin, NEAR co-founder
What Web3 needs is a developer-friendly ecosystem where the next generation of builders can create the privacy solutions demanded by users. The NEAR Protocol is uniquely suited to fill this gap. In this article, we describe how NEAR facilitates the development of privacy protocols through its robust architecture, versatile feature set, dev tooling, and financial support of privacy projects building in its ecosystem.
A playground for privacy developers
It is no secret that NEAR is an excellent ecosystem for blockchain developers, but what is less known are the unique features that make it attractive for privacy builders. For instance, the NEAR blockchain is robust enough to support an entire other blockchain’s worth of transaction data running as a smart contract. The prime example of this is Aurora, which functions like an EVM layer-1 blockchain but is actually a smart contract running on NEAR. NEAR’s tooling also natively supports the BLS signatures required for zero-knowledge proofs. This means developers could conceivably leverage a NEAR smart contract to construct an entire private DeFi (PriFi) ecosystem mirroring all the functionality of a private L1.
NEAR protocol is also a sharded blockchain, giving it the ability to scale to millions of users. One compelling feature of NEAR shards is that they can be custom-built for a single enterprise customer in what is called a Private Shard. Data and transaction history on Private Shards are only visible to the shard owner, but can be shared voluntarily to meet regulatory requirements. Private Shards act like enterprise blockchains, but have the added benefit of being interoperable with the entire NEAR ecosystem and can even transact privately with other Private Shards.
Supporting privacy builders
NEAR has provided numerous grants to privacy projects and created partnerships with cross-chain privacy solutions. Grants have also been provided by Cypherpunk Guild, a group of developers, marketers, and entrepreneurs supporting privacy projects on NEAR. The projects currently building on NEAR go beyond private transactions and PriFi to encompass the numerous services required to build out a private and decentralized Web3 user experience services such as decentralized VPN, private video conferencing, and enterprise Private Shard infrastructure, to name a few.
Private transactions
ZeroPool
ZeroPool is a multi-chain privacy solution building on NEAR. Based on Optimistic Rollups, it works by taking zkSNARKs computations off-chain to provide NEAR users with cost-effective private transactions on NEAR and other supported blockchains.
Suterusu Shield
Suterusu is a privacy solution offering confidential P2P transactions and a multi-chain payments infrastructure. They received a grant from Cypherpunk Guild to support their integration with NEAR.
Mystiko Network
Mystiko Network is a multichain privacy solution deployed on Aurora. They enable NEAR users to perform private transactions on Aurora and cross-chain with Ethereum via the Rainbow Bridge.
Private DeFi
Panther Protocol
Panther Protocol is a privacy solution building a robust multi-chain PriFi infrastructure. They received a grant from NEAR to support their native deployment on NEAR and Aurora. The Panther deployment will allow NEAR users to swap assets privately between other L1 blockchains, such as Ethereum and Avalanche. It will also allow individuals and institutions to convert NEAR assets into private zAssets to participate in Panther DeFi applications in a private but regulatory compliant way.
Zecrey Protocol
Zecrey is both a multi-chain Layer-1 wallet and a privacy-enhanced Layer-2 solution built using zk-rollups. Zecrey enables NEAR users to bridge their tokens to the L1 wallet and execute private transactions and participate in private DeFi in the private L2 ecosystem.
Privacy services
Relayz
Relayz is a private and secure video conferencing application building on NEAR. They received a grant from NEAR to develop their innovative technology. Something like a decentralized Zoom, Relayz will allow NEAR users to participate in encrypted video meetings and chats in a trustless fashion. Given the privacy concerns raised about Zoom, a decentralized alternative is long overdue.
Calimero Network
For large enterprises and institutions who want to take advantage of NEAR’s Private Shard technology but do not know where to begin, Calimero Network provides an on-demand service to build customized Private Shards running WebAssembly or EVM smart contracts.
Orchid Protocol
Orchid Protocol is a decentralized VPN service and marketplace building on Aurora. The unique value proposition of a blockchain-based VPN service is that the largest source of privacy leaks in legacy VPN services is the centralized VPN companies themselves.
Electron Labs
Electron Labs is creating a standardised framework to deploy ZK-Rollup on any Rust based chain to make privacy solutions more viable and accessible. Its main mission to contribute to the advancement of privacy on Web3 by creating a standard library to produce zk-proofs for transaction batches and integrate EVM’s albn128 pre-compiles directly and enabling efficient ZK-SNARK verification on Rust chains. Currently, Electron Labs is building ZK Light Clients for NEAR Rainbow Bridge to reduce their cross-chain transaction costs, more info on that here.
Just the beginning
We have touched briefly on the technology that facilitates privacy projects building on NEAR and how NEAR’s privacy-enhanced Web3 ecosystem is developing. We provided short introductions to some of the exciting privacy solutions now developing in the NEAR ecosystem. Let us know if you would like to see a deep dive into any of these topics or projects. And let us know if there are any privacy projects we missed!
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