POA Network is excited to announce the latest round of funding from the xDai Privacy Fund. The third and newest recipient of a funding grant is… Tornado.cash! The Tornado Mixer is a new Ethereum token mixer that has already received a lot of attention in the Ethereum development community. Tornado.cash recently received a development grant from Moloch DAO, and the xDai privacy fund grant will provide additional support, providing 1.55 million POA tokens to integrate xDai into the mixer. Once this integration is complete, users will have the option to send xDai to one other in a completely private manner.
Why private transactions?
By default, your entire xDai transaction history and balances are public and transparent, and can be viewed on block explorers like BlockScout. This allows anyone who knows or can figure out your address to view your payments, trace the source of your funds, calculate your holdings, and analyze your on-chain activity.
While a transparent transaction history is vital to maintaining an accurate ledger, there are also privacy issues related to address tracing. In order to establish xDai as a true cash alternative, the same transaction advantages afforded to cash should also be afforded to transactions made with xDai. This includes anonymity, and this is where Tornado.cash comes in. The mixer acts as a proxy to ensure that each transaction is 100% anonymous and private with zkSnarks proofs, as well as 100% non-custodial.
How does it work?
The Tornado mixer is used to send xDai to any address in a way that completely obscures the sender’s address. It does this using zero-knowledge proofs. xDai is deposited into a noncustodial smart contract, and a proof is generated that shows the deposit was performed without revealing the original address. The app then sends this proof to an operator which submits it to the smart contract. The contract sends the xDai to the desired recipient, and the operator is reimbursed with a small fee for processing the transaction
See how simple it is to use here: https://www.dappuniversity.com/videos/YgrphOCYAs8
The ZK Fund’s aim is to incentivize participants to integrate zero knowledge protocols into applications and wallets that use xDai. We are very excited to see xDai implemented into Tornado.cash and for users to have an immediate option to privately and anonymously send xDai. We are also looking forward to wallet-based methodologies as our previous two recipients of xDai Privacy Fund grants (Poketto Cash and Burner Wallet) continue to make progress on their own private transaction implementations.