Background and Core Objectives of Ethereum’s Privacy Upgrade
On April 11, 2025, Ethereum co-founder Vitalik Buterin released the “Minimalist L1 Privacy Roadmap” on the Ethereum Magician Forum, proposing a systematic solution to user privacy leakage without changing Ethereum’s consensus mechanism. The publication of this roadmap comes at a time when the Ethereum ecosystem faces two major challenges: the widespread adoption of DeFi and social DApps has made users’ on-chain behavior highly transparent, and global regulatory bodies are intensifying the monitoring of blockchain transactions. For example, the U.S. SEC’s sanctions against Tornado Cash exposed the legal risks associated with privacy tools, while existing privacy protocols (such as zero-knowledge proofs) are hindered by high Gas costs and complex operations that deter ordinary users.
Vitalik emphasizes that Ethereum’s privacy protection must shift from an “optional feature” to a “default configuration.” His core philosophy is that users should not have to actively choose privacy modes; instead, through protocol-level modifications and wallet design, transactions, identities, and data should be automatically anonymized.
Four Core Privacy Areas and Implementation Paths
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On-Chain Payment Privacy: The Wallet “Shielded Balance” Revolution
Mainstream wallets (such as MetaMask) will integrate privacy protocols like Railgun and Privacy Pools so that when users send transactions, the “shielded balance” function is enabled by default. This means that funds are sent from a privacy address directly, without needing an extra mode switch. For example, when a user transfers funds to a friend, the recipient will only see the amount and will not be able to trace the source of the funds. Simultaneously, a “one address per application” policy is implemented, where an independent address is automatically generated whenever a user interacts with a different DApp, preventing cross-platform behavior correlation. -
Anonymous Operations within DApps: Account Abstraction and Censorship-Resistant Mechanisms
By utilizing EIP-7701 (account abstraction upgrade) and FOCIL (fork choice forced inclusion list), Ethereum will support privacy protocols running independently of relay nodes. For example, tools such as Tornado Cash can broadcast transactions directly through smart contracts without relying on centralized relay services. FOCIL forces validator nodes to include privacy transactions, preventing them from being filtered out due to their “anonymity.” -
On-Chain Data Reading Privacy: From TEE to PIR Technology Iteration
In the short term, a Trusted Execution Environment (TEE) will be employed to isolate sensitive data when RPC nodes process user queries. In the long term, this will upgrade to Private Information Retrieval (PIR), allowing users to make encrypted queries of on-chain information (such as account balances) without the server knowing the content of the query. For example, when a user checks token holdings, the node will only return an encrypted result without knowing the specific query. -
Network Layer Anonymity: Hybrid Networks and Multiple RPC Connections
Wallets will by default connect to multiple RPC servers and use mixed networks to obfuscate metadata such as IP addresses. This design, similar to the Tor network, makes it difficult for external observers to trace user behavior patterns.
Key Technical Tools and Industry Impact
Short-Term Breakthrough: Proof Aggregation Protocol and Privacy Cost Optimization
High Gas costs associated with zero-knowledge proofs have been a major barrier to privacy adoption. Vitalik proposed a proof aggregation protocol that combines proofs of multiple privacy transactions into a single on-chain verification, reducing the cost per transaction by 60%-80%. For example, the Gas fee for Railgun’s privacy transfers could drop from US$5 to US$1.5, approaching ordinary transaction levels.
Long-Term Vision: Invisible Addresses and Cross-Chain Privacy Synchronization
The invisible address technology under the ERC-5564 standard has entered the testing phase. Users can generate one-time use transaction addresses via a “meta address” to completely sever on-chain behavioral linkages. JuCoin’s on-chain analytics tools now support anonymous tracking of such addresses, assisting institutional compliance audits.
Impact on DeFi and Regulation
- DeFi Protocol Reconstruction:Platforms like Uniswap must support shielded balance transactions, or they risk losing users.
- Regulatory Game-Upgrades:Privacy compliance is now a focal point, and projects must strike a balance between censorship resistance and anti-money laundering (AML). For example, the UAE VARA is studying a “whitelist” mechanism for privacy transactions, which allows regulators to decrypt transactions under certain conditions.
Challenges and Future Outlook
Technical Bottlenecks and User Experience Trade-offs:
- Performance Loss:TEE depends on specific hardware, which may lead to node centralization; the large-scale application of PIR technology still needs to resolve efficiency issues.
- Operational Complexity:Address isolation mechanisms may increase the management burden on average users, necessitating the optimization of user experience through wallet automation tools.
Community and Market Reactions:
The privacy protocol Railgun has already announced support for the new standard, and the social app Farcaster plans to integrate address isolation functionality within six months. However, some developers are concerned that the privacy upgrade might delay Ethereum Spectra’s scalability progress, and L1 throughput issues must be prioritized.
Vitalik clearly emphasized in the roadmap that Ethereum’s ultimate goal is to become a “general-purpose computing layer with default privacy,” and that the social layer (community consensus and values) is the core competitive edge differentiating it from other public chains. In the future, privacy protection will be deeply integrated with account abstraction and modular architecture, driving Ethereum toward a safer and more inclusive Web3 infrastructure.
Neason Oliver
