DeFi
Hinkal Launches Shared Privacy Protocol for Cross-Chain DeFi Privacy
Full summary
- Hinkal announced the upcoming launch of the shared privacy protocol
- The protocol enables cross-chain privacy via anonymous staking
- It addresses the need for privacy in DeFi trading, especially for institutional investors
- Shared Privacy Protocol creates a unified pool of protected liquidity across all chains
- Users can stake assets to earn rewards while contributing to the privacy pool
- The protocol aims to mirror the privacy standards of traditional finance in DeFi
Hinkala multi-chain privacy layer for confidential on-chain transactions, has announced the upcoming launch of its Shared Privacy Protocol. This innovative protocol aims to enable cross-chain privacy through a mechanism called anonymity staking, potentially revolutionizing the way privacy is handled in the blockchain space.
The announcement comes at a time when institutional investors are rapidly entering cryptocurrency markets, bringing with them a demand for the same level of privacy in DeFi transactions that they have long enjoyed on traditional exchanges. However, achieving complete privacy in DeFi has been a significant challenge due to the fragmentation of liquidity across over 200 Layer 1 and Layer 2 blockchains.
Hinkal’s Shared Privacy Protocol addresses this challenge by establishing a unified pool of shielded liquidity across all chains. This approach, which the company likens to “EigenLayer for Privacy,” allows users to bootstrap shielded total value locked (TVL) in a manner similar to how EigenLayer has enabled projects to bootstrap security.
The protocol introduces a concept of horizontal privacy integration, where shielded TVL can be mirrored across different blockchains such as Arbitration or Solana.
This allows traders and decentralized applications (dApps) across the blockchain ecosystem to leverage the full value of the shielded TVL pool, regardless of the specific chain they operate on.
Georgi Koreli, co-founder and CEO of Hinkal, stressed the importance of this development:
“Ensuring complete on-chain privacy is a critical step towards enabling the full adoption of cryptocurrencies as an asset class across the institutional financial sector. The launch of the Shared Privacy Protocol is a key step towards unleashing the power of the community and breaking down privacy barriers in cryptocurrencies.”
The shared privacy protocol provides benefits to different stakeholders in the DeFi ecosystem. Stakers can deploy their native and staked assets on the protocol, generating additional yield while maintaining the flexibility to swap yield tokens on other dApps.
Traders benefit from an expanded Shielded Pool, which further obscures their trading strategies and allows them to maximize capital deployed across multiple chains. For decentralized exchange and decentralized application developers, the protocol offers a seamless way to integrate new privacy features into their platforms.
This approach to privacy in DeFi mirrors the security standards of traditional finance, allowing individual and institutional users to manage assets and transact on major dApps without publicly disclosing wallet addresses. This level of privacy is crucial for institutional adoption of DeFi, as it protects trading strategies and prevents front-running.
Evgeny Gokhberg, founder of Re7 Capital and investor in Hinkal, stressed the importance of this solution for institutional players:
“A compliant solution that enables discrete liquidations without disclosing transaction data is necessary for us to operate effectively in DeFi markets, and Hinkal’s Shared Privacy Protocol is the solution we have been looking for for a long time.”
Hinkal, founded by Stanford graduate Giorgi Koreli and his PhD-holding brother Nika Koreli, is designed as an institutional-grade protocol that gives users full control over their on-chain assets.
The protocol uses zero-knowledge (ZK) proofs to enable private smart contract wallet experiences, allowing users to interact with their favorite dApps directly from private addresses without the need to withdraw assets for obfuscation.