Privacy is no longer optional, but the cornerstone for the survival and prosperity of the Ethereum ecosystem.
As an analyst who has been navigating the crypto industry for many years, I have recently observed a quiet yet far-reaching transformation: the PSE team under the Ethereum Foundation has released a brand new privacy roadmap. This is not just a technical upgrade, but a profound strategic shift aimed at transforming Ethereum from a 'global transparent ledger' to a 'programmable privacy global settlement layer'.
Market sentiment is shifting, and ETH is no longer merely following BTC's liquidity pace, but is beginning to tell its own unique story. Today, let's discuss why this privacy revolution can activate the entire ecosystem and how we should position ourselves.
1. Why now? Ethereum's 'privacy anxiety'
Imagine that every salary you receive, every investment you make, and even every transfer to a friend is permanently etched on public glass, available for anyone to view. This is the real situation of current Ethereum users. This radical transparency has become the biggest obstacle to widespread adoption.
There are three core pain points:
MEV attacks rampant: ordinary users' trading strategies and assets are like running naked in a 'dark forest', easily being front-run and subjected to sandwich attacks.
Institutional funds are hesitant: no board of any institution would approve exposing core financial operations completely on a public ledger. The lack of business secret protection will keep trillions of dollars of traditional capital at bay.
Regulatory pressure is increasing: global regulatory bodies are tightening their monitoring of the crypto industry, and Ethereum needs to find a balance between privacy and compliance.
By 2025, industry consensus will finally be reached: privacy must become a default attribute rather than an additional feature. This is a fundamental evolution, just like the internet upgrading from HTTP to HTTPS.
2. Technical insights: how the three pillars build a privacy fortress
The brilliance of the PSE roadmap lies in its systematic approach, building end-to-end full-stack privacy protection around three core pillars: 'privacy writing', 'privacy reading', and 'privacy proof'.
1. Privacy writing: make your on-chain operations 'invisible'
Invisible address: like a one-time 'post office box service'. When others send you assets, a brand new address that only you can control is generated for each transaction. The outside world cannot associate these transactions with your main identity, completely protecting the recipient's privacy.
PlasmaFold: this is an experimental Layer 2 technology whose core innovation lies in the 'folding' technique. It can aggregate and compress a large number of zero-knowledge proofs into a very compact proof, significantly reducing on-chain verification costs while achieving high throughput and strong privacy.
2. Privacy reading: achieve 'incognito browsing' on-chain
We often overlook that 'reading' operations such as checking balances and browsing transaction history can also leak privacy. Your RPC node service provider can record your IP address and query behavior, analyzing your wealth status and investment intentions.
ORAM technology is like your 'magic cloak'. Each time you query, you request a large amount of seemingly random data at once, of which only one is what you truly want. Node service providers cannot discern your true intentions at all.
3. Privacy proof: democratize zero-knowledge proofs
The goal is to enable ordinary users to easily generate zero-knowledge proofs on their own mobile phones and laptops, without relying on centralized servers.
Client proof: like having a portable 'magic stamp', you can generate proof on a local device to verify a certain fact (such as being over 18 years old) without disclosing any other sensitive information.
zkTLS/TLSNotary: this technology can be described as a 'magic skill' bridging Web2 and Web3. It allows you to prove to DeFi protocols that you have $100,000 in the bank without revealing any account information, opening the door for on-chain credit and other scenarios.
3. Ecological impact: the paradigm revolution of DeFi, DAO, and DID
Privacy upgrades are not isolated; they will sweep across the entire Ethereum ecosystem like waves.
Unlocking institutional DeFi: confidential trading pools and dark pools will become possible. Institutions can participate in on-chain finance without disclosing strategies, which is a key step in unlocking trillion-dollar institutional capital. The Ethereum Foundation has established an 'Institutional Privacy Task Force' specifically to promote this.
The DAO governance revolution: private voting will end the problems of vote buying and bribery brought about by public voting, allowing members to vote based on independent judgment, significantly improving governance quality.
The future of DID and social: zero-knowledge proofs will become the cornerstone of the next generation of decentralized identity. You can selectively disclose information, truly achieving data sovereignty.
4. New market narrative: secret opportunities under capital rotation
From a market perspective, we are in a typical rotation cycle: Bitcoin rose first, and capital is now flowing into Ethereum and its ecological projects.
This privacy upgrade creates a unique narrative advantage for $ETH. When privacy coins like Zcash soar in price due to the opening of grayscale trusts, market attention has turned to the privacy track. However, Ethereum's path is smarter: it does not create purely anonymous coins, but rather leaves room for compliance through programmable privacy, protecting users in the process. This flexibility is more sustainable in the current regulatory environment.
5. Personal views and outlook: embrace the 'privacy dividend' period
As an analyst, I believe that Ethereum's move is very precise. It does not avoid core contradictions, but instead lays a foundation for the next round of growth through systematic infrastructure upgrades.
My judgment for the next 6-12 months is:
The secondary explosion of Layer 2: especially StarkNet, zkSync, and others with accumulated ZK technology, they will quickly integrate new privacy primitives and become the most direct beneficiaries.
The reshuffling of the wallet track: wallets like Kohaku that natively integrate invisible addresses and private RPC will stand out with their excellent user experience.
The deep evolution of DeFi: leading DeFi protocols (like Uniswap and Aave) will collaborate with privacy layers like Aztec to launch confidential trading pools, capturing institutional liquidity.
'Compliance privacy' projects will be favored: agreements like Privacy Pools that can actively isolate illegal funds through zero-knowledge proofs are more likely to strike a balance between regulation and privacy.
Risk warning: the complexity of technical implementation, optimization of user experience, and the game with global regulation remain challenges. Investors need to pay attention to the actual progress of projects rather than mere conceptual hype.
This privacy revolution has just begun. Wise funds always lay out before infrastructure matures. If you believe that Ethereum's future is more than just a transparent casino, but rather a cornerstone for global finance and digital civilization, then the privacy track is undoubtedly the most fertile ground to cultivate in the coming years.
Which projects do you think can best capture this wave of privacy dividends? Feel free to share your insights in the comments section~
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