4 Companies Defining This Year’s ‘Privacy Summer’
You’ve heard of DeFi summer. You’ve survived crypto winter. And you’ve just lived through stablecoin spring. Well, brace yourself because there’s a fresh onchain season about to start: Privacy Summer. We’re entering fertile times for privacy protocols that are now springing up everywhere. Favorable tailwinds are making onchain privacy not just acceptable at last but essential.
For a long time, crypto developers felt like they were fighting an uphill battle simply to convince regulators that privacy was necessary. That battle has conclusively been won. Now that the blockchain has been legitimized, everyone from institutions to national governments appears to be finally pro-privacy, having opposed it for so long.
The Push for Privacy
Some of the tailwinds elevating privacy have been positively warm, such as the GENIUS Act, which has helped normalize stablecoins and paved the way for solutions addressing private payments. Other winds working in its favor have been discernibly colder, such as the recent leak of 16 billion passwords, or the constant menace of AI running rampant with our data.
The outcome is the same though: everyone from Vitalik Buterin downwards seems in agreement that greater privacy, both in web3 and off-chain digital systems, is needed. The only thing they haven’t quite agreed on is which form that implementation should take. Which is why there are several competing privacy standards currently vying for dominance within this burgeoning sector. Though perhaps ‘competing’ is the wrong word here, since it’s healthy for the market to have unique solutions that are optimized for specific use cases.
The following four projects each do things differently, but they’re united by a shared goal: to give web3 users the privacy that is a basic human right. Some are calling it “Privacy Summer”, a season where blockchain innovators are stepping up to rebuild trust in our digital lives.
COTI: Powering Payments With Garbled Circuits
If you’re a crypto native, sending money onchain is a cinch. It’s just that you don’t necessarily want to do so, since the very act of, say, paying a freelancer or splitting a bill with a friend broadcasts your entire digital net worth to the world. That’s the bull case for COTI, the Ethereum Layer 2 whose Garbled Circuits technology ensures that no one can peek at your balance despite the transaction being broadcast across a public network. It’s like whispering in a crowded room without anyone overhearing.
Because Garbled Circuits allows smart contracts to work with encrypted data, they can verify the output is correct without needing to analyze its contents. Needless to say this has applications that extend way beyond crypto payments – think futures trading, healthcare data, and AI agents – but the outcome is the same: the sender gets to choose which pieces of information they share and to whom. This allows for things like compliance to be met while keeping this info hidden from prying eyes.
Unlike computationally heavier methods like zero-knowledge proofs, Garbled Circuits are lightweight and fast, handling thousands of transactions per second without jacking up costs. The tech is already live on COTI’s L2, delivering privacy for everything from perps platforms to enterprise supply chains. In an era of escalating breaches and AI data grabs, COTI’s “compliant privacy” model strikes a smart balance: users control what gets disclosed for audits while keeping the rest locked down.
COTI coined the term “Privacy Summer” in an X post.
Zama: Fully Homomorphic Encryption for the Masses
Fully homomorphic encryption (FHE) is another rising privacy tech that enables you to crunch numbers on encrypted data without ever decrypting it. Zama is the heavyweight here, fresh off a $57 million Series B round in June that catapulted them to unicorn status with a valuation over $1 billion. This funding isn’t just VCs riding the hype train, but a vote of confidence from investors like Blockchange Ventures and Pantera Capital that privacy tech is ready for prime time, especially as stablecoins and tokenized assets explode.
Zama’s edge is that its implementation of FHE lets blockchains handle confidential computations on public ledgers, which is perfect for sensitive stuff like healthcare records or financial trades. They’re launching a Confidential Blockchain Protocol this summer, with a public testnet already live and mainnet slated for later in 2025. As Vitalik Buterin recently observed, we need to avoid over-relying on complex proofs, and Zama delivers by making heavy-duty encryption enterprise-ready without the slowdowns. For everyday users, this means AI agents can collaborate across chains without leaking your data, turning privacy from nice-to-have into a default. It’s also got major applications for bridging web3 with off-chain systems, proving that robust protection doesn’t have to mean isolation.
Privacy Pools: Vitalik-Backed Private Transactions
Its website may be peak web3 minimization, but don’t let the lack of a landing page deter you: Privacy Pools is the real deal. Developed by 0xbow.io, the protocol is designed to enable anonymous transactions on the Ethereum blockchain while ensuring compliance by blocking illicit actors and proving that funds aren’t linked to criminal activities. Zero-knowledge proofs, commitment schemes, and “Association Sets” are used to batch transactions anonymously, with a screening process to exclude links to hackers or scammers.
The project aims to “Make Privacy Normal Again” by balancing user anonymity with regulatory requirements, addressing concerns raised by past privacy tools like Tornado Cash, which faced sanctions for facilitating money laundering. One of Privacy Pools’ first users was Vitalik Buterin, who’s certainly been putting his money where his mouth is when it comes to supporting greater onchain privacy. The protocol started with support for ETH, but stablecoins USDC and USDT were recently added, bringing Ethereum the privacy protections it’s long been lacking.
Midnight Network: ZP-Powered Privacy
Midnight Network specializes in “rational” privacy by using zero-knowledge proofs to support the creation of applications that don’t leak user data. And the case it makes as to why privacy is needed in all spheres of life is pretty rational, it must be said. According to Midnight, “Governments have privileged information. Businesses have trade secrets. Inventors, creators, and researchers have intellectual property that must be protected.” It also cites consumer-facing businesses such as healthcare providers and financial institutions that must take care of customer data.
These are the diverse user groups and domains that Midnight is built for. Its data-protection blockchain has applications that extend far beyond web3. Like many of the other “next-gen” privacy protocols profiled here, Midnight supports optional disclosure for compliance purposes, enabling businesses to keep their data to themselves while satisfying their legal obligations. The ecosystem that’s coalescing around Midnight is vast: assuming its network goes the distance, its ZK proofs could soon be securing everything from your web browsing data to proprietary institutional trading algos.
As Privacy Summer heats up, the projects profiled here are returning control to web3 users in a data-hungry world. They’re doing their bit to build a more equitable digital future where innovation thrives without sacrificing our humanity. They, and numerous protocols following in their wake, are making onchain privacy a working reality while proving that everyone has something to hide – and should be given the tools with which to hide it. Long may privacy season run.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
