Introducing Shielded Accounts; set to transform the DeFi landscape. Driven by cutting-edge zk-SNARKs technology, Redacted is taking a vanguard approach to privacy in DeFi transactions.
At their core, Shielded Accounts leverage zk-SNARKs technology, a kind of zero-knowledge proof that allows one party to prove possession of certain information without revealing it. For blockchain transactions, this means a user can prove they have a valid transaction without revealing the specifics — the sender, receiver, or value transferred. This doesn’t just protect users’ privacy; it also ensures the transaction is valid and free from double-spending.
Imagine being able to perform your DeFi operations without revealing your on-chain activities to the world. With Redacted’s Shielded Accounts, this will soon be a reality.
Users can begin by depositing their assets into the Shielded Account. This account is distinct from their standard wallet, ensuring a separation between their public and private transactions.
Within the shielded environment, users can then perform various DeFi operations — from swapping assets and supplying liquidity to interacting with NFTs. All of these operations are ‘redacted’ — visible only to the user.
Users can withdraw their assets back to their original deposit address at any time. It’s as simple as that. No strings attached, no prying eyes.
One of the major concerns with privacy-enhancing solutions is their potential misuse. Redacted is fully aware of this and has put in place robust compliance measures to ensure legality.
It is crucial to note that the withdrawal of funds can only occur to the originating address of the deposit. This allows for the tracking of asset flow from the perspective of the origin and final destination of the assets. This is crucial in maintaining transparency of fund ownership, a key tenet in various Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.
While transactional privacy is maintained throughout the use of the Shielded Account, the starting and end points of the transaction flow are verifiable on the public blockchain. This inherent transparency provides a balance between user privacy and the necessary compliance with regulatory standards.
In essence, while transactions made via the Shielded Account are masked to the public, they are not entirely anonymous. The originating deposit address serves as a pseudo-identity within the system, allowing for the mapping of asset ownership. This feature is paramount, especially within jurisdictions that mandate transparency of digital asset ownership and flows.
Redacted respects and upholds the autonomy and privacy of its users even while facilitating transparency. With that in mind, they devised a system that allows users, at their discretion, to generate a read-only private key. This read-only key can be shared with i.e. auditors or tax consultants if the user chooses to do so, providing a means for them to examine transactions without compromising the actual control or privacy of the user’s activities. It is exclusively the user’s choice to create and distribute this key, further ensuring user control and privacy. This unique feature balances the need for privacy with the potential requirements of compliance and auditability.
Redacted’s Shielded Accounts are set to bring a new era of privacy to DeFi, offering users the freedom to operate without fear of exposure. But this is just the beginning. Redacted is continually developing and exploring new privacy-preserving solutions for the DeFi space. As we move towards a future where privacy becomes increasingly essential, Redacted is leading the way, one shielded transaction at a time.