Ethereum Developers Explore New Token Standards with Focus on User Privacy

Ethereum developers are turning their attention back to user privacy with the emergence of new token standards that prioritize anonymity. The proposed pERC-20 standard would allow users to hold and transfer tokens without revealing their balances, transaction amounts or counterparties.

Unlike traditional ERC-20 tokens, which display sensitive details on-chain for anyone to inspect, pERC-20 would keep these details private while still allowing the network to verify that no changes have occurred. The total supply of a token would remain publicly visible, and issuers could freeze specific notes through a cryptographic blacklist without exposing users' balances or transaction histories.

However, some developers argue that private payments are only part of the challenge. Eli Ben-Sasson, co-founder of StarkWare, notes that the biggest obstacle facing privacy technologies is user experience (UX). He believes that if the UX is bad, few users will adopt a privacy network, undermining its effectiveness.

Starknet has launched its STRK20 framework, which aims to extend confidentiality beyond simple token transfers into decentralized finance applications. The framework uses post-quantum secure cryptography and allows users to manage multiple assets under a unified privacy layer, interacting with decentralized applications while maintaining confidentiality.