The Evolution of the Privacy Track: From Niche to Compliance

— The Rise of Zama and a New Generation of Programmable Privacy

Over the past decade, the "privacy track" in the crypto space has always existed on the fringes: niche technology, niche users, and even more niche adoption.

Early privacy coins relied on strong anonymity, such as Monero’s ring signatures and Zcash’s zk-SNARKs. While these solutions were technologically advanced, they were long considered "the spiritual symbol of crypto punks" due to their computational complexity, high barriers to use, and immense regulatory pressure, making it difficult for them to enter mainstream systems.

The core characteristic of this era was clear: Privacy ≈ Niche, even ≈ Controversy.

From 2014 to 2023, the overall market cap share of privacy coins remained at 1–2%. Most users saw them as "privacy protection tools," not as foundational layers for mainstream financial systems. Exchanges continuously delisted them, and policies tightened, bringing the privacy track to a near standstill.

🌀 2024–2025: Privacy Technology and Regulatory Frameworks Reach an Inflection Point
The real change started brewing in 2024.

1⃣ Technological Breakthroughs: Maturity of ZK and FHE
🔹Vitalik released the Kohaku privacy roadmap, systematically introducing ZK proofs and stealth addresses to Ethereum.
🔹Aztec Network launched a programmable privacy L2, making privacy smart contracts the de facto standard.
🔹More importantly, the practical application of Fully Homomorphic Encryption (FHE) made "computation on encrypted data" no longer just an academic paper.

2⃣ Regulatory Attitude Shift: From Crackdown to Auditable Privacy
🔹Zcash’s viewing key model proved that privacy does not mean unregulatable.
🔹EU MiCA and the US Treasury’s policies are gradually moving towards "compliant privacy" instead of blanket bans.
🔹RWA, payments, and institutional finance scenarios increasingly need privacy layers, making privacy a "functional requirement."

I believe these factors are jointly pushing the privacy field from the margins toward the center.

📈 The Market Is Validating: Privacy Is Returning to Mainstream Narratives
Zcash’s 2025 performance is a bellwether for the "track’s revival":
🔹A 1172% price increase, 24-hour trading volume surpassing $1.27 billion
🔹A significant rise in the proportion of shielded transactions, with daily transactions soaring to 73,000+
🔹Shielded supply grew by 233%, exceeding 4 million ZEC

The overall market cap of the privacy sector surpassed $20 billion. Projects like Monero and Secret Network, focusing on "compliant privacy," also rose in tandem. This scale is no longer just speculative growth but a structural shift brought by a resurgence in utility.

More importantly, the community narrative has fundamentally changed, with 2025 KOL mainstream views being:

"Privacy is not about fighting regulation, but about building a new financial system together with regulators."

🔑 As Privacy Becomes Compliant, Zama Becomes a Key Piece of the Puzzle
Here’s the key: why does any discussion of "privacy compliance" ultimately point to Zama?

Because the essence of FHE is to solve the paradox between "privacy vs compliance."

Past privacy technologies:
🔸Either too anonymous (causing regulatory conflict)
🔸Or too heavy (unable to scale)

FHE offers a third path: encrypted but computable, verifiable but not visible. What @zama is doing is turning this "formerly niche math-world black tech" into a truly usable general-purpose privacy layer on-chain.

In summary, Zama solves three core industry contradictions:
Problem 1: DeFi transparency leads to MEV, strategy leakage, and frontrunning of quotes.
Solution: Zama enables transactions and states to execute "in encrypted state," achieving confidential matching, lending, and position management.

Problem 2: On-chain transparency of institutions conflicts with compliance requirements.
Solution: Zama supports "selective auditing," where the public cannot see but auditors can.

Problem 3: FHE is too complex and hard to implement for developers.
Solution: Zama’s FHE Coprocessors model allows developers to call FHE computations as easily as calling L2.

🌐 The Future of Privacy Is Not Resisting Regulation, but Building with It
With the dual drivers of FHE and ZK, "compliant privacy" is becoming the standard configuration for global on-chain finance, just like when the internet migrated from HTTP to HTTPS:
🔸Initially seen as the dream of tech enthusiasts
🔸Eventually becoming the industry default used by everyone

I believe this is the fundamental reason why the privacy track will truly break out of its niche in 2025. From niche → mainstream → compliance is an irreversible trend.

And Zama is at the center of this trend.

#ZamaCreatorProgram #Zama