In the latest @a16zcrypto post about privacy, I read the following: "...And with U.S. stablecoin legislation recently signed into law, the need for blockchain privacy is now more urgent than ever. Stablecoins represent an opportunity to onboard a billion people into crypto. But for users to be comfortable using crypto to pay for everything from their coffee to their medical bills, they will need to be certain that the activities they undertake onchain are private." I totally agree. The passing of the GENIUS act is going to bring billions of dollars onchain and privacy is going to be a requirement for much of this in a way it hasn’t been for early crypto activity. One thing I haven’t seen a lot of discussion about is how the intersection of real time ZK proofs + production grade validiums are going to be a massive unlock for financial and enterprise teams moving onchain, given what they can facilitate both when it comes to “privacy” but also functionality. Firstly - ICYMI, we’ve seen a huge amount of progress in ZK proving performance this year, from a lot of teams in the space. @zksync Airbender is now delivering sub-second ZK proofs and with incredible hardware utilization (using commodity GPUs). Provers are getting blazing fast. We also now have production grade validiums, and financial institutions can deploy private, enterprise-grade chains that are fully interoperable w/ the rest of the Ethereum ecosystem. This is “privacy” in the web2 sense though: user Alice can see her txs and account balance but not those of user Bob, but the chain operator can see everything. Much like I can read my X messages but I can’t read yours, but X as a company have access to the data for all users. With the GENIUS act passing we’re going to see more financial institutions bringing assets onchain. This is already happening, and we can see why - these v. high performance ZK based systems look super compelling in a bunch of different ways: • Banks can deploy their own private ZK chain and transact with other systems almost instantly. A transfer from a private bank network in Europe to a public network in the US could be confirmed via ZK proof in seconds, enabling true real-time cross-border settlement. This could massively improve the UX for foreign exchange or remittances, with users no longer having to wait days for wires to clear. • As the execution performance of these systems improves, DEXes and trading platforms can begin to handle increasing throughput and load. A dedicated, interoperable DEX ZK appchain could soon be doing ~10K TPS, with users seamlessly initiating swaps from their account on their bank’s Prividum chain (the UX could be clean - you could do everything from your regular banking app). • These exchanges could match trades and publish ZK proofs for every 200ms block, giving participants confidence in finality almost immediately. The more we improve the performance of these systems, the more institutional activity can be supported too, given their need to be able to enter and exit positions quickly. Obviously onchain performance is still nowhere near what is needed by HFT, but the progress we’re making as an industry is incredible and for many use-cases, sub second ZK proofs is all that is required. • As these systems gain adoption, the line between TradFi and DeFi will blur. Already it is possible to build systems that have user-level privacy and could support trading 24/7 between tokenized assets, ERC20s, ETH, NFTs etc. With increasing tokenization we’ll see many assets becoming tradable on these platforms. • Super fast ZK proofs are also going to be a requirement for general interoperablity IMO. We’re entering a world in which a central bank’s public/private chain, a commercial bank’s private chain, and a public DeFi platform will all need to transact with each other. With low latency ZK proofs there is no need to rely on trusted third parties or slow bridging through L1. Its been said a lot, but ZK based interop really can be the HTTPS moment for web3 (”HTTPZ” 🔥). • A network of configurable and interoperable ZK chains can scale to support global financial infrastructure, with async execution across a mix of public and private state, and cryptographic guarantees for correctness at every step. The credible neutrality and vast economic security provided by Ethereum as the settlement layer seems like a massive improvement over some of the private interbank networks that have been developed so far. • Very high performance ZK systems we can also allow for new functionality to be enabled. Take compliance for example - financial institutions spend a ton of resources on this today (incl. trade reports, compliance checks, audits etc). Prividiums could be setup such that every tx had an attached proof of compliance (e.g. a trade did not exceed some risk limits, or that the customer had been KYC’d). As this technology matures, regulators could just run nodes in relevant networks and verify proofs of compliance. Banks could also publish proofs of liquidity or reserves without exposing anything at the customer level. This is already starting to happen for CEXs. All of this appears to offer huge efficiency benefits for financial institutions and enterprise teams, and this is how some of the recent announcements from @zksync come together. Airbender brings performance and fast finality. Prividum brings user-privacy, web2-UX, and compliance. Ethereum brings the trust and security.