gm, readers.

At Automata we work on protecting privacy and fairness. And in this newsletter, we find more reasons to talk about it. Explore headlines and catch up on the biggest crypto news in Web3 privacy.

This week:

• China announces launch of privacy-focused blockchain for identity verification

• Nym, Protocol Labs, Oasis, and Aztec form Web3 'Universal Privacy Alliance'

• Ocean Mining refutes accusations of censorship on privacy-focused Bitcoin transactions raised by Samourai Wallet

• Companies are cautioned by the UK watchdog to prioritize privacy rights in AI implementation or potentially face consequences

• Tether announced a new voluntary wallet-freezing policy targeting sanctioned individuals on the OFAC SDN List

• Worldcoin unveils integrations with Minecraft, Reddit, Telegram and Shopify

• Layer-1 blockchain COTI unveils plans to become the "first privacy-preserving Ethereum layer-2”

• Crypto hacking losses plunge by nearly 50% in 2023

• OKX DEX suffers $2.7 million exploit after proxy admin contract upgrade

Zooming into ZK:

• Polyhedra unveils Bitcoin Messaging Protocol with zkBridge, enabling blockchain networks to retrieve Bitcoin data in a trustless manner

• Pudgy Penguins to launch Pudgy World, a Web3 interactive game, on zkSync in 2024

• ZK infrastructure platform Sindri secures $5 million in funding

• Nil Foundation innovates a novel type-1 zkEVM compiler to mitigate security concerns

• Polygon 2.0 set to witness growing interconnectivity of ZK-powered Layer-2 chains within its ecosystem in 2024

• Chainlink Price Feeds for Matter Labs and Chainlink Labs now live on zkSync Era

• Bitget invests in Layer-2 blockchain Morph, which combines optimistic and ZK rollups for scalable transactions

• Celestia announces its plan to integrate its data availability layer with Polygon Labs’ CDK for zk-rollups built on top of it

• Starknet Foundation plans to distribute 10% of network fees to developers in a pilot program coined ‘Devonomics’

• Immutable’s zkEVM to eliminate Web3 gaming gas fees

Op-Ed:

• S&P Global launches stablecoin ratings, ranks GUSD, USDP, USDC highest

• Google updates crypto ads policy amid January spot bitcoin ETF anticipation

Conversations you might have missed:

• Pundi X Labs discusses Web3 payment scaling through the implementation of ZK-rollups with Polygon Labs

We dive into the details, so you don’t have to:

China is set to launch RealDID, a national privacy-focused digital identity chain using blockchain technology to verify the real-name identities of its 1.4 billion citizens. The RealDID platform allows users to register and log into online portals anonymously through Decentralized Identity (DID) addresses, ensuring private transactions and data exchanges. This initiative represents a significant advancement in digital identity management in China, aiming to give users control over their personal information and enhance privacy and data security.

Privacy-centric web3 projects, such as Nym, Protocol Labs, Filecoin Foundation, Oasis, and Aztec, have united to form the "Universal Privacy Alliance" (UPA), with an initial fund of $150,000. Inspired by Edward Snowden's call to action at the ZK-House event and aligned with the UN's stance on digital privacy, the UPA aims to promote user privacy and security by default in digital interactions. Each founding member has contributed $15,000 to the alliance, with additional funding expected to support ongoing advocacy efforts in the future.

Celestia’s modular data availability (DA) network will be integrated with the Polygon Chain Development Kit, a toolkit facilitating the creation of Ethereum Layer 2 chains using zero-knowledge technology.

In the move coined by Polygon co-founder Sandeep Nailwal as the “broadband moment for Web3”, Celestia’s DA layer is expected to slash gas fees by over 100 times. Data availability remains a significant challenge in scaling Ethereum, largely due to the inefficient requirement for nodes to validate and store every piece of data in a block.

Nil Foundation has introduced a security-focused zkEVM to address security issues identified in other ZK-powered Ethereum scaling solutions. Powered by zkLLVM, the new type-1 zkEVM compiler prioritizes security, automatically compiling high-level programming code into zk-SNARKS circuits. Unlike manual circuit definition approaches, Nil’s automated compiler aims to eliminate the risks associated with complexity and human error, as seen in the discovery of a soundness bug in Matter Labs’ zkSync Era mainnet.

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This newsletter is for informational purposes only. It is not intended to be a substitute for professional financial advice or interpreted as investment advice. Cryptocurrencies are volatile assets and you should always do your own research before making any informed decisions when investing or trading.