0xbow has launched a new blockchain privacy tool called "Privacy Pools," inspired by the research of Vitalik Buterin. The system aims to facilitate private transactions on public blockchains such as Ethereum through zero-knowledge proofs, while ensuring compliance. Privacy Pools allow users to publicly isolate illicit funds without exposing specific deposits. Unlike previous mixers, Privacy Pools introduce consortium providers to prevent bad funds from entering the mixing pool. The protocol is based on a paper co-authored by Buterin and other researchers in 2023.

The system was developed by 0xbow, which built the infrastructure and wallets necessary to enable private transactions on a public blockchain like Ethereum. 0xbow has received funding from Bankless, Number Group, Public Works and a number of angels, including Ethereum co-founder Vitalik Buterin."Privacy Pools, our new onchain privacy product from 0xbow, is how we reclaim privacy from the terrorists," Soleimani told The Block in a direct message. "Privacy Pools builds on the work that the Tornado Cash team did with their compliance tool and iterates on it, now allowing users to publicly dissociate from and isolate illicit funds, without revealing their specific deposits. Privacy for the good guys."Users can deposit and withdraw ERC-20 tokens privately using zero-knowledge proofs, while an ASP ensures compliance by vetting funds. The process involves connecting through a compatible wallet on networks like Ethereum or Layer 2 Gnosis, creating a dedicated 0xbow Wallet, depositing funds into the pool and withdrawing to a new shielded address.Unlike previous mixers like Tornado Cash, Privacy Pools can feature Association Set Providers that maintain lists of sanctioned or sketchy accounts. 0xbow, or another entity, can act like a gatekeeper to prevent dirty funds from entering the mixing pool.0xbow’s protocol has its roots in a paper Buterin co-wrote in 2023 with Chainalysis researcher Jacob Illum as well as academics Matthias Nadler and Fabian Schar, among others. The ideas in that paper have been adopted by several projects, including Railgun, which was instrumental in preventing the zKLend attacker from laundering stolen funds in February.“This is only the beginning The road to making privacy normal again is long and exciting, and we can’t do it alone!” 0xbow wrote in its announcement.

0xbow launches "Privacy Pools," a blockchain privacy tool based on Buterin's research.