Vitalik Buterin Transfers $1M Ether to Privacy Protocol Railgun

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Last updated:

August 19, 2024 02:41 EDT

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Ethereum co-founder Vitalik Buterin on Monday transferred Ether worth $1m into privacy protocol Railgun, further demonstrating his support for the privacy-first interface.

According to on-chain analytics service Spot On Chain, Buterin has sent 662 Ether in total, or $1.91m, to the Railgun protocol in the last 10 months.

How Railgun Uses Zero-Knowledge Proofs to Conceal Blockchain Transactions

Railgun operates on Ethereum and similar blockchain networks. It uses Zero-Knowledge proofs, specifically zk-SNARKs, to ensure privacy. This allows users to interact discreetly with decentralized finance platforms. Details such as who sends or receives funds, the amounts involved, and the tokens used are kept hidden from the public ledger.

Each transaction Railgun processes — whether a token swap or a private transfer — enhances privacy. It does this through introducing randomness into the transaction details. This makes it harder to trace funds from their origin to their destination, or to link them to specific individuals.

Buterin has described Railgun as a strong tool for protecting users’ privacy. He noted that it “makes it much harder for bad actors to join the pool without compromising users’ privacy.”

Buterin’s Railgun Transfer Fuels Privacy Debate Amid Allegations of Misuse

Buterin’s use of Railgun indicates a prominent approval of its privacy capabilities. At the same time, it has ignited conversations about the wider consequences of privacy within blockchain transactions.

Blockchain analysis firm Elliptic has earlier claimed that the North Korean hacking outfit, Lazarus Group, used Railgun to launder over $60m in Ethereum that was pilfered in June 2022.

In response, Railgun refuted any involvement with Lazarus, rejecting the accusations as baseless. The protocol asserted that it is designed to block sanctioned or nefarious users from engaging with their services.