Original title: Privacy Renaissance: Blockchain's Next Era Original author: Paul Veradittakit, Partner at Pantera Capital Original translation by: Saoirse, Foresight News Since the birth of Bitcoin, the core concept of the blockchain industry has always been rooted in "transparency"—it is an open and immutable ledger that anyone can view; its trust stems from "verification" rather than institutional reputation. It is this transparency that allows decentralized systems to function properly based on integrity and accountability mechanisms. However, as blockchain technology matures and its applications expand, "transparency" alone is no longer sufficient. A new reality is emerging: privacy protection is key to driving blockchain into the mainstream, and the demand for privacy is accelerating at the cultural, institutional, and technological levels. At Pantera Capital, we have believed in this view from the beginning—we invested in Zcash as early as 2015, one of the first projects to attempt to introduce privacy protections to an immutable ledger. We believe the industry is entering a "privacy renaissance" era: an era that deeply integrates the concept of open blockchain with the practical needs of global finance. Against this backdrop, privacy protocols built around the core principle of "confidentiality" (such as Zama, which is about to launch its mainnet) are experiencing a surge in development opportunities. Zama's fully homomorphic encryption (FHE) technology is an "absolute bastion" driving mainstream blockchain applications and can also withstand the threats posed by quantum computing in the coming years. Blockchain applications are just one area where Zama's FHE technology can be applied; it can also be extended to other vertical fields such as artificial intelligence (e.g., Zama's Concrete platform) and cloud computing. Another noteworthy investment target is StarkWare—the inventor of zk-STARKs zero-knowledge proof technology and the Validium solution, providing a "hybrid solution" for blockchain privacy and scalability. StarkWare's cryptographic technology also possesses quantum resistance and focuses on blockchain application scenarios, especially its newly launched "S-Two prover," which further enhances the practicality of the technology. Cultural shift: From "surveillance fatigue" to "digital sovereignty" Globally, people's understanding of data has undergone a fundamental shift. Years of mass surveillance, algorithmic tracking, and data breaches have made "privacy" one of the core cultural issues of the past decade. Today, users are increasingly aware that not only information and transaction records, but even metadata can leak private details such as personal identity, wealth, location, and interpersonal relationships. "Privacy protection + user ownership of sensitive data" has become the new industry norm—a direction that Pantera Capital favors, leading to our investments in projects such as Zama, StarkWare, Transcrypts, and World. As public awareness of privacy continues to rise, the blockchain industry must confront the fact that digital currencies require "confidentiality," not "full traceability." In this environment, privacy is no longer a niche demand but a crucial component driving the development of "digital sovereignty." Institutional Transformation: Lack of Privacy Transparency Cannot Support Large-Scale Applications More and more institutions are entering the blockchain ecosystem: banks, remittance platforms, payment processors, enterprises and fintech companies are conducting pilot programs to process real-world transaction volumes in tokenized assets, cross-border settlements and multi-jurisdictional payment networks. However, these institutions cannot operate on a "completely transparent public ledger"—corporate cash flow, supplier networks, foreign exchange exposure, contract terms, and customer transaction records must never be disclosed to competitors or the public. What companies need is "selective transparency of confidentiality," not "complete exposure." This is precisely the foundation laid by early pioneering projects like Zcash. When Pantera Capital invested in Zcash in 2015, we realized that privacy is not an ideological preference, but a necessary condition for actual economic activity. Zcash's core insight is that privacy protection cannot be "added after the fact" to the system (especially when using zero-knowledge proof technology), but must be embedded in the core of the protocol—otherwise, subsequent use will become extremely difficult, fragile, and inefficient. Launched in 2016 as a Bitcoin fork, Zcash introduced zk-SNARKs technology, which can hide transaction details while ensuring the complete verifiability of transactions. Furthermore, the mixing protocol Tornado Cash is also a significant milestone in the development of on-chain privacy: as people seek ways to break the correlation between public chain transactions, this protocol has seen substantial real-world user activity. Changes in USD inflows to Tornado Cash before and after sanctions (Data source: TRM Labs) However, Tornado Cash's model had a flaw: it emphasized strong privacy protection but lacked a "selective disclosure mechanism," ultimately leading to high-profile legal action by government agencies—forcing a de facto suspension of the project despite it being autonomous code. This outcome confirms a key lesson: privacy protection cannot come at the expense of "auditability" or "compliance pathways." This is precisely the core value of Zama's fully homomorphic encryption technology: fully homomorphic encryption supports direct computation on "encrypted data" while retaining the ability to "selectively verify and disclose information"—a feature that mixing protocols such as Tornado Cash have never had since their inception. The importance of fully homomorphic encryption is evident in the strategies employed by tech giants: Apple, Microsoft, and others are all investing resources in building fully homomorphic encryption frameworks. Their investment conveys a clear consensus: for consumers and institutions, "scalable, compliant, end-to-end encryption" is the future of digital privacy. Privacy demands are rapidly increasing. Data confirms this trend: privacy-focused crypto assets are gaining more attention from users and investors. However, the real shift is not driven by retail speculation, but rather stems from practical applications where privacy and transparency must coexist. • Cross-border payments are increasingly reliant on blockchain, but businesses and banks cannot disclose every payment path. • RWA is required to keep its "holdings" and "investor identities" confidential; • In global supply chain finance, both parties to a transaction need to verify events (such as freight, invoices, and settlements), but must not disclose trade secrets; • Enterprise-level transaction networks require a model that is "visible to auditors and regulators, but not to the public". At the same time, retail users are increasingly dissatisfied with "highly monitored public chains"—on these chains, transaction relationship graphs can be reconstructed with simple tools. Today, "privacy protection" has become one of the core expectations of users for digital currencies. In short, the market is gradually recognizing the fact that blockchains that cannot provide confidentiality will face structural limitations in institutional-scale applications. Canton, Zama, StarkWare, and Next-Generation Privacy Architectures With the advent of the privacy renaissance, a new generation of protocols is emerging to meet the needs of organizations. The Canton blockchain serves as an example, highlighting the growing demand from enterprises for "private transaction execution on a shared settlement layer." Such systems allow participants to conduct private transactions while enjoying the advantages of "global state synchronization" and "shared infrastructure"—Canton's development clearly demonstrates that enterprises want to capture the value of blockchain while avoiding the public exposure of their business data. But the most transformative breakthrough in the field of private computing may come from Zama—which occupies a unique and more scalable position in the privacy technology stack. Zama is building a "confidentiality layer" based on fully homomorphic encryption (FHE), enabling direct computation on encrypted data. This means that the entire smart contract (including inputs, state, and outputs) can remain encrypted while still being verifiable on a public blockchain. Unlike privacy-first Layer 1 public chains, Zama is compatible with the existing ecosystem (especially the Ethereum Virtual Machine, EVM) – meaning that developers and organizations do not need to migrate to a new chain, but can simply integrate privacy features into their existing development environments. Private smart contracts using fully homomorphic encryption (FHE) (Data source: Zama) Zama's architecture represents the next evolution in blockchain privacy protection: moving beyond simply hiding transactions to achieving "scaled private smart contracts." This will unlock entirely new application scenarios—including private DeFi, encrypted order books, confidential real-world asset issuance, institutional-grade settlement and clearing processes, and secure multi-party business logic—all without sacrificing decentralization, with some applications expected to be implemented in the near future. Currently, privacy assets are receiving more attention: institutions are actively evaluating confidentiality layer technologies, developers hope to achieve privacy computing under the premise of "no off-chain system latency and complexity", and regulatory agencies are also beginning to develop frameworks to distinguish between "legitimate confidentiality tools" and "illegal obfuscation methods". Looking to the future The privacy narrative in the blockchain industry is no longer about the "opposition between transparency and confidentiality," but rather an awareness that both are necessary conditions for the next era of DeFi. The convergence of cultural attitudes, institutional needs, and breakthroughs in cryptographic technology is reshaping the evolution of blockchain over the next decade. Zcash demonstrates the necessity of privacy protection at the protocol level; protocols such as Canton reflect the institutional demand for a "confidential transaction network"; and Zama is building infrastructure that is expected to integrate these needs into a "cross-chain general scalable privacy layer". Pantera Capital's early investment in Zcash stemmed from a simple belief: privacy protection is not an "optional" matter. Nearly a decade later, this viewpoint has become increasingly relevant—from tokenized assets to cross-border payments and corporate settlements, the key to the next wave of blockchain applications lies in achieving a "secure, seamless, and private" technological experience. With privacy protection becoming a core theme of this market cycle, protocols that offer "practical, scalable, and compliant confidentiality solutions" will define the future landscape of the industry. Among them, Zama, as a highly promising and timely leader in this "privacy supercycle," is standing out.Original title: Privacy Renaissance: Blockchain's Next Era Original author: Paul Veradittakit, Partner at Pantera Capital Original translation by: Saoirse, Foresight News Since the birth of Bitcoin, the core concept of the blockchain industry has always been rooted in "transparency"—it is an open and immutable ledger that anyone can view; its trust stems from "verification" rather than institutional reputation. It is this transparency that allows decentralized systems to function properly based on integrity and accountability mechanisms. However, as blockchain technology matures and its applications expand, "transparency" alone is no longer sufficient. A new reality is emerging: privacy protection is key to driving blockchain into the mainstream, and the demand for privacy is accelerating at the cultural, institutional, and technological levels. At Pantera Capital, we have believed in this view from the beginning—we invested in Zcash as early as 2015, one of the first projects to attempt to introduce privacy protections to an immutable ledger. We believe the industry is entering a "privacy renaissance" era: an era that deeply integrates the concept of open blockchain with the practical needs of global finance. Against this backdrop, privacy protocols built around the core principle of "confidentiality" (such as Zama, which is about to launch its mainnet) are experiencing a surge in development opportunities. Zama's fully homomorphic encryption (FHE) technology is an "absolute bastion" driving mainstream blockchain applications and can also withstand the threats posed by quantum computing in the coming years. Blockchain applications are just one area where Zama's FHE technology can be applied; it can also be extended to other vertical fields such as artificial intelligence (e.g., Zama's Concrete platform) and cloud computing. Another noteworthy investment target is StarkWare—the inventor of zk-STARKs zero-knowledge proof technology and the Validium solution, providing a "hybrid solution" for blockchain privacy and scalability. StarkWare's cryptographic technology also possesses quantum resistance and focuses on blockchain application scenarios, especially its newly launched "S-Two prover," which further enhances the practicality of the technology. Cultural shift: From "surveillance fatigue" to "digital sovereignty" Globally, people's understanding of data has undergone a fundamental shift. Years of mass surveillance, algorithmic tracking, and data breaches have made "privacy" one of the core cultural issues of the past decade. Today, users are increasingly aware that not only information and transaction records, but even metadata can leak private details such as personal identity, wealth, location, and interpersonal relationships. "Privacy protection + user ownership of sensitive data" has become the new industry norm—a direction that Pantera Capital favors, leading to our investments in projects such as Zama, StarkWare, Transcrypts, and World. As public awareness of privacy continues to rise, the blockchain industry must confront the fact that digital currencies require "confidentiality," not "full traceability." In this environment, privacy is no longer a niche demand but a crucial component driving the development of "digital sovereignty." Institutional Transformation: Lack of Privacy Transparency Cannot Support Large-Scale Applications More and more institutions are entering the blockchain ecosystem: banks, remittance platforms, payment processors, enterprises and fintech companies are conducting pilot programs to process real-world transaction volumes in tokenized assets, cross-border settlements and multi-jurisdictional payment networks. However, these institutions cannot operate on a "completely transparent public ledger"—corporate cash flow, supplier networks, foreign exchange exposure, contract terms, and customer transaction records must never be disclosed to competitors or the public. What companies need is "selective transparency of confidentiality," not "complete exposure." This is precisely the foundation laid by early pioneering projects like Zcash. When Pantera Capital invested in Zcash in 2015, we realized that privacy is not an ideological preference, but a necessary condition for actual economic activity. Zcash's core insight is that privacy protection cannot be "added after the fact" to the system (especially when using zero-knowledge proof technology), but must be embedded in the core of the protocol—otherwise, subsequent use will become extremely difficult, fragile, and inefficient. Launched in 2016 as a Bitcoin fork, Zcash introduced zk-SNARKs technology, which can hide transaction details while ensuring the complete verifiability of transactions. Furthermore, the mixing protocol Tornado Cash is also a significant milestone in the development of on-chain privacy: as people seek ways to break the correlation between public chain transactions, this protocol has seen substantial real-world user activity. Changes in USD inflows to Tornado Cash before and after sanctions (Data source: TRM Labs) However, Tornado Cash's model had a flaw: it emphasized strong privacy protection but lacked a "selective disclosure mechanism," ultimately leading to high-profile legal action by government agencies—forcing a de facto suspension of the project despite it being autonomous code. This outcome confirms a key lesson: privacy protection cannot come at the expense of "auditability" or "compliance pathways." This is precisely the core value of Zama's fully homomorphic encryption technology: fully homomorphic encryption supports direct computation on "encrypted data" while retaining the ability to "selectively verify and disclose information"—a feature that mixing protocols such as Tornado Cash have never had since their inception. The importance of fully homomorphic encryption is evident in the strategies employed by tech giants: Apple, Microsoft, and others are all investing resources in building fully homomorphic encryption frameworks. Their investment conveys a clear consensus: for consumers and institutions, "scalable, compliant, end-to-end encryption" is the future of digital privacy. Privacy demands are rapidly increasing. Data confirms this trend: privacy-focused crypto assets are gaining more attention from users and investors. However, the real shift is not driven by retail speculation, but rather stems from practical applications where privacy and transparency must coexist. • Cross-border payments are increasingly reliant on blockchain, but businesses and banks cannot disclose every payment path. • RWA is required to keep its "holdings" and "investor identities" confidential; • In global supply chain finance, both parties to a transaction need to verify events (such as freight, invoices, and settlements), but must not disclose trade secrets; • Enterprise-level transaction networks require a model that is "visible to auditors and regulators, but not to the public". At the same time, retail users are increasingly dissatisfied with "highly monitored public chains"—on these chains, transaction relationship graphs can be reconstructed with simple tools. Today, "privacy protection" has become one of the core expectations of users for digital currencies. In short, the market is gradually recognizing the fact that blockchains that cannot provide confidentiality will face structural limitations in institutional-scale applications. Canton, Zama, StarkWare, and Next-Generation Privacy Architectures With the advent of the privacy renaissance, a new generation of protocols is emerging to meet the needs of organizations. The Canton blockchain serves as an example, highlighting the growing demand from enterprises for "private transaction execution on a shared settlement layer." Such systems allow participants to conduct private transactions while enjoying the advantages of "global state synchronization" and "shared infrastructure"—Canton's development clearly demonstrates that enterprises want to capture the value of blockchain while avoiding the public exposure of their business data. But the most transformative breakthrough in the field of private computing may come from Zama—which occupies a unique and more scalable position in the privacy technology stack. Zama is building a "confidentiality layer" based on fully homomorphic encryption (FHE), enabling direct computation on encrypted data. This means that the entire smart contract (including inputs, state, and outputs) can remain encrypted while still being verifiable on a public blockchain. Unlike privacy-first Layer 1 public chains, Zama is compatible with the existing ecosystem (especially the Ethereum Virtual Machine, EVM) – meaning that developers and organizations do not need to migrate to a new chain, but can simply integrate privacy features into their existing development environments. Private smart contracts using fully homomorphic encryption (FHE) (Data source: Zama) Zama's architecture represents the next evolution in blockchain privacy protection: moving beyond simply hiding transactions to achieving "scaled private smart contracts." This will unlock entirely new application scenarios—including private DeFi, encrypted order books, confidential real-world asset issuance, institutional-grade settlement and clearing processes, and secure multi-party business logic—all without sacrificing decentralization, with some applications expected to be implemented in the near future. Currently, privacy assets are receiving more attention: institutions are actively evaluating confidentiality layer technologies, developers hope to achieve privacy computing under the premise of "no off-chain system latency and complexity", and regulatory agencies are also beginning to develop frameworks to distinguish between "legitimate confidentiality tools" and "illegal obfuscation methods". Looking to the future The privacy narrative in the blockchain industry is no longer about the "opposition between transparency and confidentiality," but rather an awareness that both are necessary conditions for the next era of DeFi. The convergence of cultural attitudes, institutional needs, and breakthroughs in cryptographic technology is reshaping the evolution of blockchain over the next decade. Zcash demonstrates the necessity of privacy protection at the protocol level; protocols such as Canton reflect the institutional demand for a "confidential transaction network"; and Zama is building infrastructure that is expected to integrate these needs into a "cross-chain general scalable privacy layer". Pantera Capital's early investment in Zcash stemmed from a simple belief: privacy protection is not an "optional" matter. Nearly a decade later, this viewpoint has become increasingly relevant—from tokenized assets to cross-border payments and corporate settlements, the key to the next wave of blockchain applications lies in achieving a "secure, seamless, and private" technological experience. With privacy protection becoming a core theme of this market cycle, protocols that offer "practical, scalable, and compliant confidentiality solutions" will define the future landscape of the industry. Among them, Zama, as a highly promising and timely leader in this "privacy supercycle," is standing out.