๐ก๏ธ Privacy Pools v2 is live: Privacy isnโt just about hiding your fundsโyou can earn yield, too?
Yesterday, we were watching hackers funnel stolen funds into Tornado Cash in batches. Today, Ethereum has a new upgrade to a different privacy solution: Privacy Pools v2, officially launched by the 0xbow team.
First, some background: Since v1 launched in March 2025, it has processed more than $26 million in total.
Whatโs new in v2:
๐น Private transfers and payment requests, so even everyday payments can stay private
๐น Private swaps through partners such as LI.FI
๐น Funds in the privacy pool can automatically be put to work on Aave to earn yield
๐น Available on seven chains, including Ethereum, Arbitrum, and Base
๐น Fully self-custodial: depositing breaks the public link, and you can withdraw to any address
The key feature: it screens funds to keep illicit money out of the pool, while the team stresses that there are no backdoors. CEO Nathaniel Fried says that in v2, privacy doesnโt just protect youโit can also earn you yield.
My take:
The age-old dilemma of crypto privacy is that โgood actors want privacy, and bad actors do, too.โ Tornadoโs approach was to have no restrictions at all, which ultimately left it caught between regulators and hackers. Privacy Pools takes the โscreen first, then go privateโ approach. It sacrifices some purity in exchange for the possibility that ordinary users and institutions will feel comfortable using it.
But keep two things in mind: Who sets the screening criteria, and could they wrongly flag legitimate users? These are questions to watch over the long term. And adding Aave yield means taking on another layer of protocol riskโitโs not free money.
Which kind of privacy do you prefer: completely permissionless, or with compliance screening? Letโs discuss in the comments ๐
#้็ง #ไปฅๅคชๅ #DeFi #PrivacyPools