A lot of projects, like Miden, are building privacy on Ethereum. How are they doing? What problems are they facing?
Last week, the Ethereum Foundation gave us a snapshot. The PSE — a research and development lab delivering privacy on Ethereum — spoke with 38 projects covering technical and non-technical problems.
Here are the three takeaways:
The Leak Is at the Door
Ten teams flagged deposit/withdrawal privacy leakage as a top problem. The shielded pool works fine. The moment you walk in or out, you're visible. That's an architecture problem, and it's the one that regulators and compliance teams are actually watching.
The privacy industry has been selling the middle of the journey, while ignoring the endpoints (a little like how crypto projects don’t like to discuss security problems at the edges of their architectures.)
Privacy for Whom?
Institutions want confidentiality, not anonymity, and that changes everything. A quiet fault line runs through this research. Retail users want anonymity: i.e. don't tell anyone who I am. Institutions want confidentiality: tell the right people, at the right time, nothing more. Those are different products.
Building for institutional demand risks building the wrong thing at scale, and locking in a version of "privacy" that serves compliance first and users second. Some teams, like Miden, know this. Most, you guessed it, are building for whoever will pay.
Built for a Crowd That Hasn't Arrived
The technology is nearly ready but GTM is tough. Six teams reported low demand and no product-market fit. Whales will pay 25–50bps per trade for privacy, but that's a thin slice. Retail won't suffer friction. Institutions say they want it but haven't shown up in size.
My honest read from 38 interviews: the hardest problems in “private transfers” right now (the focus of the research) aren't technical. They're narrative and distribution. This research was supposed to surface engineering bottlenecks. Instead, it raised a go-to-market problem.
Privacy Roundup
Polygon CDK now lets institutions launch private chains where transaction data never touches a public network, via a new validium configuration powered by Succinct that keeps raw data in-house while Ethereum sees only a ZK proof.
TACEO released Confidential x402, a privacy extension to the x402 payment protocol that replaces plain ERC-20 agent-to-agent transfers, over 100M settled to date, with cryptographic commitments hiding amounts and balances.
PSE interviewed 38 teams building private transfers and published the field's biggest blockers: ZK proving cost and speed, DeFi composability, deposit/withdrawal leakage, regulatory uncertainty, and lack of product-market fit.
Starknet launched strkBTC, the first asset built on its STRK20 in-protocol privacy framework — backed 1:1 by BTC, with toggleable public and shielded modes encrypted using STARK proofs.
Galaxy Research published a deep-dive on Ethereum's Strawmap, naming Private L1 as one of five "north stars" guiding development through the end of the decade.
Latest on Miden
Miden co-founder Azeem Khan joined Frank Chaparro on GSR's The Crypto Tape to talk about what Miden is building, the state of the market, and why the old industry playbook is not working anymore.
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Till next time.