Privacy is a major concern for decentralized finance (“DeFi”) and cryptocurrency users in general. The popular belief in anonymity has previously led many to use currencies such as Bitcoin and Ethereum, but this is quickly fading out as more surveillance emerges. A group of scientists is working to solve this problem through a project known as the Railgun Project.
This is not a new concern. For example, Tim Copeland wrote a file Article – Commodity In early 2020 to highlight the frivolous nature of “doxing,” or revealing sensitive personal information about Ethereum wallet owners, using only wallet details known to the public.
For this reason, earlier this year the Right to Privacy Foundation sponsored a new DeFi project called Railgun, led by a group of scientists in Europe, Australia and Canada. RAILGUN, a privacy platform built directly on EthereumWith which you can directly interact with DEXs, distributed exchanges and other DeFi applications, it allows users to engage in crypto and DeFi-based activities, ensuring financial freedom, without fear of being spied on, by anyone.
Privacy using ZK-SNARKS on an Ethereum base was once considered impossible, but new breakthroughs in crypto technology have made it possible for the first time, using only smart contracts with Railgun.
What is railgun?
A RAILGUN is a set of smart contracts (computer code that enforces rules and performs a function for fulfilling transaction obligations in DeFi applications) that use non-knowledge proofs (which are ways to prove certain things about entities without revealing who they are or sensitive details about with them). Working together, this allows RAILGUN users to exchange currencies and use applications in the DeFi space without being tied to their original address or other activity. Their finances will remain private.
According to the lead researcher on the project, Emmanuel Goldstein, the system will be fully live on the Ethereum network in July. Users will be able to deposit ETH, USDC, renBTC, renZEC and other tokens into the RAILGUN system and become anonymous, allowing them to take action on the tokens they have deposited privately.
Unlike previous attempts to create privacy on Ethereum, there will be no need for new nodes, nor will there be a need for “Layer 2,” or additional infrastructure running on top of Ethereum.
“RAILGUN only uses zk-SNARKS in smart contracts, so it’s all on-chain, with full Ethereum security, and no swaps.” Mr. Goldstein says.
The project team also announced the inclusion of a private DEX in the private system, and the ability for third-party wallet apps to automatically include Railgun Privacy as a feature for free. By creating an ecosystem where privacy, anonymity, transfers, deals, and other activities all happen in one place, all participants benefit from the large and increasingly noisy pool of anonymity. All users of the system can get rid of the activity of others.
How is RAILGUN different?
Previous iterations of privacy protocols failed to deliver the flexibility, security, and privacy that RAILGUN ensured. Existing solutions such as mixers lack functionality and convenience. For example, they don’t allow internal protected transfers, they can’t interact with smart contracts, and users have to work in static classes which means users can’t transact effectively using their protocol, with any kind of ease or efficiency.
The technology behind RAILGUN
The primary component that brings privacy and anonymity to RAILGUN is the use of zero-knowledge clues. Similar to how Zcash works, RAILGUN uses zk-SNARKs to prove that protected transactions are valid without revealing any information about the sender, recipient, or transaction amount.
Once the proof is verified by the smart contract, it updates the Merkle tree that collects all the generated feedback (i.e. the encrypted balance owned by a public key controlled by the recipient), and cancels the consumed feedback (i.e. owned by the sender). This prevents users from double spending or making money out of the blue. Simply put, zksnarks is a proof system, and “zero-knowledge” means that the validator does not gain any knowledge about the sender, recipient or amounts of the transaction, giving users complete privacy and anonymity.
Railgun comes with what users have come to expect in terms of modern user experience. If they use MetaMask or any other popular wallet, they will be clearly familiar. They won’t have to worry about how zk-SNARK proofs are generated or verified or how RAILGUN smart contracts protect their privacy. All complex tasks are handled by the wallet itself, without any additional complexity for users. Moreover, it is open source so that anyone can audit it at will.
What can users do with RAILGUN?
RAILGUN will be for those who believe that privacy is a fundamental right as a human being. Users will be able to:
- Make darkpool style trading where no one can copy your farming strategies
- Make confidential payments to your attorney when seeking legal advice on personal disputes.
- New entry Currency Investments without alerting who is following your portfolio
- Build a protected balance without strangers knowing the details of your diamond handbags
- Receive donations without strangers being able to view donation history
- Prevent spying and collect data about their transaction habits
- Be free from being targeted by advertisers or scammers based on your DeFi habits
- Stop making any dates looking into your DeFi habits before having dinner with you
Where can users learn more?