The growing interest of Wall Street in the cryptocurrency market could serve as a powerful impetus for the development of privacy within the Ethereum network. This opinion was expressed by Danny Ryan, co-founder and president of Etherealize, emphasizing the increasing demands for confidentiality from traditional financial institutions.
This is reported by Business • Media
The Impact of Institutions on Changing Blockchain Rules
Financial institutions that are actively implementing blockchain technologies in their operations seek to ensure the protection of sensitive information. Danny Ryan highlights that complete market transparency does not allow for the protection of trading strategies or treasury operations of major players. In his view, the institutional demand for privacy could fundamentally change the approach to confidentiality for all participants in the Ethereum ecosystem.
“The market does not function and cannot function completely openly. If we are going to transition the world to blockchains, the approach of ‘everyone sees everything all the time’ simply will not work,” Ryan stated.
Ryan compares this trend to the effect of a “Trojan horse,” where institutional demand for privacy gradually becomes the norm not only for large companies but also for ordinary users. He predicts that as the market develops, institutions will continue to demand enhanced data protection mechanisms, which will accelerate the implementation of practical privacy solutions that comply with regulatory requirements.
Technological Development and Competition in the Privacy Sector
In the crypto industry, a key technology for enhancing privacy and scalability in Ethereum is zero-knowledge proofs (ZK-proofs). Significant investments in recent years have been directed towards the development of solutions based on this technology. One of the latest innovations in this area is the launch of the leanVM virtual machine with ZK-proof support, introduced by Ethereum co-founder Vitalik Buterin. It aims to reduce the costs of scaling the network.
At the same time, competition in the privacy sector is increasing: companies like Tempo (backed by Stripe and Paradigm) and Arc (a Circle initiative) are developing their own blockchains with integrated privacy tools. However, Danny Ryan is convinced that Ethereum, thanks to the emergence of specialized applications, will be able to make private transactions a common occurrence for its users in the coming years.
Recently, Etherealize completed a funding round, raising $40 million, which it plans to direct towards developing infrastructure for trading and settlements with tokenized assets based on ZK-proofs. This is another step towards enhancing privacy in the Ethereum ecosystem.