The result is a system where transactions remain private while still allowing the network to verify that no changes to the transactions occurred.
Importantly, the proposal does not hide everything.
The total supply of a token would remain publicly visible, allowing anyone to verify that new tokens are not being secretly created. The proposal also includes a compliance mechanism that would allow issuers to freeze specific notes through a cryptographic blacklist without exposing ordinary users’ balances or transaction histories.
The design reflects a broader shift in how privacy is being discussed across crypto.
Rather than treating privacy and compliance as mutually exclusive, many newer projects are attempting to build systems that offer both.
But some developers argue that private payments are only part of the challenge.
Earlier this week, Starknet went live with STRK20, a privacy-focused token framework designed to extend confidentiality beyond simple token transfers and into decentralized finance applications such as lending, staking and token swaps.
According to Eli Ben-Sasson, the co-founder of StarkWare, the main developer firm behind Starknet, the biggest obstacle facing privacy technologies today is not cryptography. “The big problem of dealing with privacy is UX,” Ben-Sasson told CoinDesk.
Historically, privacy-focused cryptocurrencies have struggled with usability. Users often faced slow wallet synchronization, cumbersome transaction flows and limited compatibility with the broader crypto ecosystem. Those limitations made privacy tools difficult to use and, in some cases, undermined the privacy they were designed to provide.