While the digital age often treats privacy as an afterthought, at Decent we recognize it as an opportunity to iterate and improve DeFi infrastructure with powerful new features. This has become increasingly urgent as now-ubiquitous AI tools can scrape Ethereum and other public blockchains’ public data and metadata, which makes nearly all activity traceable and identifiable.

But open and transparent DeFi products need privacy solutions to grow potential use cases and bring more capital onchain, and that’s why Decent has made it our mission to help entities protect their privacy by proactively reducing their digital footprint. Decent DAO’s CTO, Adam Gall, lays out the framework for using three approaches for preserving privacy, collectively called the Privacy Trifecta: Minimized Exposure, Enhanced Ambiguity, and Anonymization Aggregation.

1. Minimized Exposure

   Think of Minimized Exposure as walking softly in the sand to avoid making footprints.

   This approach prioritizes only collecting the most essential data in the first place, thereby minimizing the amount of data that can be traced back to an entity.

   Zero Knowledge (ZK) Proofs are the prime example of a technology utilizing this approach. Some popular examples of protocols using ZK Proofs include:

   Electric Coin Company / ZCash : A cryptocurrency that uses zk-SNARKs (a form of Zero-Knowledge Proofs) to ensure transactions remain private.

   qedit : Provides enterprise solutions using ZK Proofs for secure and private data collaboration.

   NuCypher: Uses ZK Proofs for data encryption and sharing in decentralized systems.

2. Enhanced Ambiguity

   Where Minimized Exposure was walking softly in the sand to avoid leaving footprints, Enhanced Ambiguity is like walking randomly to obscure one’s footprints.

   Enhanced Ambiguity occurs through Noise Injection, the process by which random "noise" is added to data sets, making it difficult to identify individual entries. Mix Networks (mixnets) and Homomorphic Encryption are examples of this approach:

   Mixnets use a chain of proxy servers to accept data from multiple sources, shuffle it, and send it to its next destination in random order, making it very difficult to trace data sources. Some well-known mixnets include torproject and Nym.

   Homomorphic Encryption allows for computation to be performed on encrypted data without first having to decrypt it. Some protocols employing this technique include Microsoft SEAL and Fhenix.

3. Anonymization Aggregation

   This final approach is analogous to walking alongside others and sharing footprints.

   Anonymization aggregation is where data is grouped with others in such a way that individual data points cannot be singled out.

   Technologies using this approach include Multi-Party Computation and CoinJoin methods.

   Multi-party computation (MPC) is a form of encryption that allows participants to combine their data before computing a result, thus obscuring the individual pieces of data. Protocols utilizing this include haremind and Partisia blockchain.

   CoinJoin methods work somewhat similarly to MPC. In this case, multiple parties will sign a joint smart contract, mixing their coins in a new transaction. When the transaction finalizes, all participants have the same amount of coins but it's difficult to track their source. Wasabiwallet is a Bitcoin wallet that uses CoinJoin for transactional privacy and Monero uses a similar structure.

   Now more than ever, with AI-powered surveillance technologies supercharging the ability of various actors to track your every move online, it’s important that we continue to fight to protect our digital privacy. As Web3 builders, we think the tools and infrastructure surrounding DeFi are laying the foundation for a more free and fair global economy, but the lack of built-in privacy tools is inhibiting the potential use cases for individuals and institutions.

   In order for our industry to grow, we need to protect the pioneers building, trading and leading in this emergent space with effective privacy tools. Only then can crypto develop to the point where it becomes a widely accessible tool in service of individual sovereignty.

   Decent DAO is a builder collective with a mission to protect the pioneers of the next financial system with practical privacy solutions. Join us on X @decent_dao or check out our website to find out more about the privacy applications we’re building.