Vitalik Buterin Proposes New Privacy Protocol for Ethereum Blockchain

Vitalik Buterin has unveiled a fresh privacy roadmap for Ethereum, proposing a suite of wallet- and application-level enhancements that aim to make privacy seamless and default—not an optional extra. This includes embedding tools like Privacy Pools and Railgun into mainstream wallets, introducing shielded balances for private transactions, promoting a “one address per app” model to unlink on-chain activity, and implementing technologies like EIP‑7701, FOCIL, Trusted Execution Environments, and Private Information Retrieval to protect user privacy across the network.

Why This Privacy Upgrade Matters

What makes this proposal compelling is that it shifts privacy from being a difficult, opt-in feature to something baked into everyday use. Most people shouldn’t have to hunt down special wallets or struggle with complex settings just to keep transactions private. Instead, privacy becomes the default.

By weaving privacy tools into familiar interfaces and enforcing separation across applications, Buterin’s roadmap addresses many privacy loopholes without upending Ethereum’s core protocol. This makes the model practical — and scalable.

Key Privacy Enhancements Explained

Privacy Pools and Railgun in Mainstream Wallets

Mainstream wallets could soon include built-in privacy tools like Privacy Pools and Railgun. Users would get private sending abilities right inside their usual wallets, with transactions drawn from a “shielded balance” by default — no separate privacy wallets needed.

One Address per Application

Buterin suggests using different ETH addresses for each application to avoid revealing a user’s broader activity footprint. Though it sacrifices some convenience, it’s a straightforward way to break on-chain links between apps.

Protocol-Level Enhancements

EIP‑7701 allows transactions to split into phases so that senders can pay fees without revealing their identities. FOCIL enforces inclusion in blocks, bolstering censorship resistance for private transactions.

Infrastructure-Level Privacy

Buterin sees short‑term gains via Trusted Execution Environments (TEEs) for RPC privacy and long-term benefits from Private Information Retrieval (PIR) to prevent RPC nodes from knowing what’s being accessed. RPC calls can also be separated per dApp, limiting metadata exposure.

Real‑World Example: The Privacy Pools Test

A tangible example of Buterin’s privacy ambitions is Privacy Pools by 0xbow.io. Launched on March 31, 2025, this tool created anonymous pools where users deposit ETH anonymously, with mechanisms to filter out illicit funds. Buterin himself made early use of the feature. It demonstrates how privacy tools can be practical and integrated, even amid concerns about regulatory scrutiny.

Expert Insight

“Privacy must be the default state, not an exception.”

This reflects the ethos behind the new roadmap. By integrating privacy tools into everyday wallets and infrastructure, the Ethereum ecosystem can better align with user expectations—without asking them to take extra steps. It’s a shift toward privacy as a baseline, not a luxury.

Benefits and Trade‑Offs

Benefits

• Privacy by default improves accessibility and adoption.
• Protection of metadata and unlinking of on-chain activity.
• Maintains decentralization by avoiding protocol-level overhauls.

Trade‑Offs

• Multiple addresses per user can hinder usability.
• Adoption depends on wallet and dApp developer buy-in.
• Some EIP and infrastructure changes may face long debates or slow adoption.

Roadmap Summary

| Phase | Focus |
|—————|————————————————————————|
| Wallet Layer | Privacy Pools, Railgun, shielded balances, default integration |
| App Layer | One address per app, separating activity metadata |
| Protocol Layer| EIP‑7701, FOCIL for anonymous fees and censorship resistance |
| Infrastructure| TEEs for RPC, PIR for long-term privacy, per-dApp RPC separation |

Concluding Thoughts

This is strategy, not speculation. By making privacy standard, integrated, and layered, Ethereum stands to become a more user-centric, trustworthy, and resilient network. Developers, wallet providers, and dApp creators all have a role in turning this vision into reality. If they commit, everyday users could soon enjoy privacy with less friction than ever.

FAQs

What is a shielded balance?

A shielded balance is a secure portion of your wallet where private funds are stored and managed. Transactions from this balance don’t reveal your identity or balances.

Why use a separate address per application?

Using a unique address for each app makes it harder to connect your activity across services. It increases privacy by reducing linkability across your on-chain behavior.

What are EIP‑7701 and FOCIL?

EIP‑7701 splits transaction steps to keep sender identity hidden. FOCIL ensures private transactions are included in blocks without censorship. Both strengthen on-chain privacy with protocol-level tools.

How do TEEs and PIR help with privacy?

TEEs secure data in transit to RPC servers, while PIR hides what data you’re accessing. Together, they prevent intermediaries from tracking your blockchain activity.

What is the biggest challenge to adoption?

The main hurdle is ecosystem alignment. Wallets, dApps, infrastructure providers—all need to embed these tools. The trade-off between usability and privacy also needs thoughtful design.

Can privacy be integrated without a full protocol rewrite?

Yes. This roadmap avoids deep consensus changes by layering privacy enhancements at wallet and infrastructure levels, making adoption more feasible and less disruptive.