Nocturne Labs, a new startup founded in the United States last year, has attracted attention for its focus on establishing anonymous transaction protocols. The company aims to enable users to conduct anonymous transactions in the Ethereum ecosystem and is expected to launch on the Ethereum mainnet next month. Recently, the company completed a $6 million seed round of financing , led by Bain Capital Crypto and Polychain Capital, with participation from Ethereum co-founder Vitalik Buterin, Bankless Ventures, Hack VC and Robot Ventures.
Vitalik Buterin on Cryptocurrency Privacy
Vitalik Buterin said in a recent AMA (Ask Me Anything) that the risk of cryptocurrency stagnation mainly comes from the lack of privacy and open network infrastructure. In a blog article in January this year, he also mentioned that the biggest remaining challenge in the Ethereum ecosystem is privacy. In the article, he introduced in detail what a Stealth Address is .
(Extended reading: Vitalik talks about the three changes needed to increase the popularity of Ethereum )
How Stealth Address works
Stealth Address is actually a system that generates many unlinkable "one-time addresses".
This kind of system can protect the privacy of both parties to the transaction and avoid disclosing the identity of the transaction recipient. For example, if Alice wants to pay 1,000 DAI to Bob, but does not want to disclose that Bob is the recipient, the invisible address allows Alice to generate an address that only Bob can control, and publish some additional encrypted data on the chain to help Bob confirm The address belongs to him. This technology has been implemented in the EIP-5564 standard and can generate confidential externally owned accounts (EOA) in a "non-interactive manner".
Nocturne Labs’ solution
Nocturne Labs combines "account abstraction" and "zero-knowledge proof" technologies to create a private account layer. Through this layer, users can send and receive funds without exposing their addresses. The company also provides user asset custody and private payment services, and is integrated into MetaMask Snap through the SDK, providing a wallet experience with built-in asset privacy. The purpose of this stage of financing is to launch the V1 protocol, support integration with protocols, wallets, payment platforms and other partners, and start product development and distribution.
The generation process of Stealth Address
The generation process of a Stealth Address requires the participation of two participants: the receiver and the sender.
- The receiver generates the Spending Key and Stealth Meta-Address
- The sender generates a temporary private key and the corresponding temporary public key
- Both parties share their public keys to produce the final stealth address
- The receiver can use its own spending key and the sender's temporary public key to create and access a stealth address
Although a stealth address cannot hide the occurrence of a transaction, it can hide the identity of the payee, thereby protecting the privacy of both parties to the transaction.
The future of stealth addresses
Vitalik Buterin has proposed social recovery wallets in the past that would conflict with the use of stealth addresses. Social Recovery Wallet is a mechanism that supports key sharing between institutions and partners. When more than a certain proportion of keys appears, wallet permissions can be restored. However, with the invisible address mechanism, the existence of hidden wallets will affect the operational logic of social recovery, causing costs to increase and privacy to decrease.
However, we have the opportunity to solve this problem through more advanced zero-knowledge proof methods. Overall, if stealth addresses can be implemented quickly today, it will greatly improve user privacy protection on Ethereum. While this requires some work on the wallet side to support stealth addresses, the transition is worth it.
