Building confidential systems for institutional Ethereum
Ethereum
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Today we're launching EthSystems.
We build confidential systems for institutional Ethereum.
Institutions want to use Ethereum, but one of the biggest problems is the lack of built-in, modular privacy tools.
We were the Ethereum Foundation's Institutional Privacy Task Force (IPTF) for the past year. We had hundreds of conversations with central banks, regulators, tier-one banks, and asset managers, shipping open source work the whole time.
Wall Street has found crypto as an asset class, but not yet as commercial infrastructure. Institutions want to run real flows on Ethereum: stablecoins, tokenized assets, settlement. These are businesses with billions of dollars on the line, and no bank will operate in full public view. On a public ledger, confidentiality is the hard part: each party to a transaction should see what it has a right to see, and nothing more.
We have a year of proof of work: private bonds, confidential stablecoin transfers, private settlement across chains, the Ethereum Privacy Map, and more. All with protocol specs and security properties, at our website.
We've spent a decade working on privacy in crypto. We know there's no silver bullet. Different use cases need different systems, each designed, specified, and hardened properly, and someone has to do that work. That's why EthSystems exists.
We're an independent, for-profit company, backed by long-term Ethereum-aligned investors. This is a decade-long transition, and we aren't going anywhere.
If you're an institution that wants to build on Ethereum, talk to us. We're hiring: BD in New York, protocol engineers, ops: join@ethsystems.org
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Another building block we use: chainfold
chainfold is a Rust library to deal with some of the inconveniences that come with handling on-chain events, especially reconciling after encountering a reorg.
Instead of forcing you to use a specific runtime, a storage backend, or an arbitrary "safe" block height that can be considered finalized, chainfold puts these batteries in your hands, that you can tune according to your specific usecase.
The design is simple enough: process an event, fold it into your local state, and when the block is finalized, persist the fold to storage, all while being able to roll back to a point that the data was known to be canonical.
We built this library to enable easier legacy system integration, where codebases cannot use modern languages / libraries that are well maintained, and the developers end up having to rebuild most of these components themselves.
More on the design, links and long-form writeup below 👇
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In the long-form writeup, we cover how we dogfooded the library in our proofs of concepts, and the ways that developers can compose and use chainfold with other libraries in our suite.
FFI bindings and Formally verified invariants coming soon!
Writeup: ethsystems.org/writeups/buil…
Crate: github.com/ethsystems/works/…
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EthSystems has joined LF Decentralized Trust (@lfdecentralized), the Linux Foundation organization where much of the open source identity and cryptography work in this field is maintained.
We are there for the part institutions cannot buy off the shelf: confidentiality, auditability and policy controls holding together in one system.
Those three usually get solved separately, and the seams between them are where the compliance problems appear. Holding them together without giving up the openness that made the platform worth using is the actual engineering problem.
LFDT is a neutral place to do that in the open.
Full announcement in the thread 👇🏻
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LF Decentralized Trust Adds Swift, Wells Fargo, EthSystems, and 12 Additional New Members
lfdecentralizedtrust.org/ann…
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The convergence of AI agents and onchain finance creates a new class of economic actor.
For that world to scale, agents will need financial rails with programmable settlement, identity, privacy, policy and auditability built in.
Important thesis from @SharpLink on where this is heading.
AI agents are creating a new financial universe.
They will rewire $4 trillion of finance fees by 2035 according to a new estimate from @Sharplink.
The biggest winners will be consumers.
🧵
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When we launched EthSystems we said each use case needs its own system, designed, specified, and hardened properly, and that someone has to do that work.
Our specs site is now public: specs.ethsystems.org
Starting small: a shielded pool for confidential payments, an attestation-gated profile of it, and the process behind both. Each spec states what the protocol does, what it assumes, and what it guarantees. This means engineers, auditors, and regulators can work from the same document.
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We’re glad to welcome Kaushal (@liftlines) to EthSystems as Managing Director.
Kaushal brings 20+ years across financial services, technology strategy and product, followed by five years working directly in Ethereum.
Since 2021, he has led commercial and ecosystem growth for @ethnimbus, alongside privacy-focused infrastructure including Waku and Keycard, driving multi-fold growth in adoption, and helping establish Develp GmbH as an institutional-grade staking infrastructure provider.
At EthSystems, he’ll lead our work with banks, asset managers and financial market infrastructure providers as they move from digital asset experimentation into production.
Our focus is on how institutions can use Ethereum while meeting requirements around confidentiality, selective disclosure, interoperability, compliance and operational control. Kaushal joins as we build on the open-source research, reference architectures and implementation starter kits developed through our work at the Ethereum Foundation.
Welcome, Kaushal.
Let’s build confidential systems for institutional Ethereum 🤝🏻
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Next up in our suite of building blocks: `sealring`.
sealring is a Rust library for note encryption. Notes are the unit of value in a confidential system: private records of who holds what. A wallet redeems its notes by trying its key against a public list of envelopes, and sealring covers both halves of that, the sealing and the scanning.
Bring your own curve and note structure. The envelope format and the scan path come with the crate. Adapters for k256, x25519 and grumpkin ship with it, and it's no_std, so you can throw it into a zkVM if that's where you're working.
Five of our PoCs already use it: private transfers, hardened shielded pools, in-pool compliance, private bonds, and disbursement rails.
More on the design, and links to the writeup and the crate, in the thread below. 👇
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Why we made the curve configurable: NIST's transition draft has 2035 as the end date for curves like k256 and grumpkin.
If you're on sealring and decide to switch curves, that's just a change in the feature flag and a Kem trait implementation. Your keys and your note format carry over.
How fast a scan runs is set by the crate the curve implementation comes from. sealring's job is to batch the calls into it.
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One thing we left undone: grumpkin has a GLV endomorphism, which would split each decapsulation into two half-size multiplications. We discovered this in our benchmarks and plan to look into it further.
For now though,
`cargo add sealring`
Writeup: ethsystems.org/writeups/buil…
Crate: github.com/ethsystems/works/…
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We shared a glimpse from the event earlier. Now, catch the full conversation between @motypes and @henrychen_cy of @snzholding on institutional privacy, public Ethereum, and what it will take to bring more financial activity on-chain.
Thanks again to SNZ and @ethereumhkhub for the conversation and continued support 🤝🏻
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Institutional privacy has to work in the real world: confidentiality, auditability, and policy controls all need to fit together.
Excited to work with @0xMiden to explore what that looks like across payments, settlement, stablecoins, and tokenized assets on Ethereum.
Looking forward to what we build together 🤝🏻
Miden has signed an MOU with @eth_systems to explore privacy-preserving infrastructure that helps institutions bring financial activity onchain while meeting compliance requirements.
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Our first community update covers what we've been building since July, starting with rotortree: the Merkle tree behind our shielded pools. We've now released it for others to use, and it's about 450x faster than the library most of the ecosystem runs on.
Also in the window: Bankless, the EEA, and two new collaborations.
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10/ Summing up since launch: three write-ups, four crates, a compliant shielded pool proof of concept, a Bankless episode, the EEA, and collaborations with Gateway and Undefined Labs, plus coverage in CoinDesk and elsewhere.
By the way! We are still hiring: ethsystems.org/join
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11/ The Ethereum Privacy Map is how we track this whole space, and we use it constantly. If you build privacy tech, let’s contribute, it takes pull requests. Five use cases (private stocks, commodities, FX, repo, treasuries) still need approach write-ups. If you are inside an institution, use it.
ethsystems.org/map
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