The Advent of Modular Privacy in Decentralized Systems
Historically, the architecture of decentralized systems compelled users to commit to particular cryptocurrencies, chains, or dApps to access privacy features.
While functional, this siloed structure inherently limited the scalability and extensibility of privacy solutions. Namada disrupts this status quo by introducing the concept of "modular privacy," a bold reconfiguration designed to broaden the applicability of privacy features across decentralized systems.
Recap of Namada's Architecture:
The Namada Protocol operates as a Layer 1 solution comprising multiple components, yet the cornerstones that make modular privacy achievable are two key features: the Unified Shielded Set (USS) and Shielded Actions (SA). Far from being mere incremental upgrades, these elements represent a reimagining of privacy implementation across the interchain and broader cryptographic domains.
Namada's Unified Shielded Set (USS)
Traditionally in the privacy space, shielded sets were asset-specific, as evidenced by Zcash’s Sapling architecture supporting only ZEC. The larger the shielded set of an individual asset, the stronger the privacy guarantees for every user, but a fragmentation of privacy in the manner of single asset pools reduces the efficacy of privacy guarantees for low-volume assets such as NFTs, due to limiting inputs and outputs.
Namada surmounts these limitations with its Multi-Asset Shielded Pool (MASP), an evolved form of Zcash's Sapling technology. This births the USS, an asset-agnostic unified shielded set accommodating a multitude of assets. Users can thus retrofit privacy onto assets from non-private chains like Cosmos Hub, Osmosis, Stargaze, or Noble.
To optimize user experience, particularly for those engaging via Cosmos and IBC, Namada has engineered a browser extension and a web interface. These platforms are fully compatible with Keplr for key management, and feature Namada-specific functionalities.
The USS thereby confers Zcash-like privacy on all IBC tokens. Furthermore, unlike traditional privacy models where tokens are often locked, the USS enables tokens to be fluidly transferred within the shielded set.
To foster contributions to the shielded set and hence augment privacy for its users, the USS incorporates the shielded set rewards feature, a unique feature of the of the MASP/CC circuit. Namada governance determines what tokens are eligible for shielded set rewards and their target volumes.
Shielded Actions
The second cornerstone of Namada’s modular privacy is Shielded Actions (SA). This feature not only empowers users to execute transactions but enables complex, orchestrated actions across multiple blockchains, app-chains, and dApps—maintaining a privacy layer through the USS. The purpose is to give users the ability to do a lot more than what Namada inherently offers through a privacy-preserving unified interface.
SA has been meticulously designed to offer a new layer of automation in user interfaces. The feature allows users to perform multiple interactions in parallel, substantially reducing the complexity for end-users. This design finds resonance with the innovations around Interchain Accounts (ICS-27) within the IBC and Cosmos realms.
Figure 2: Privacy-enabled interactions on transparent chains through Namada’s USS and SA
The starting point of any shielded action is in the Unified Shielded Set. This ensures that user identities remain shielded, making it a herculean task for external observers to pinpoint the origin of a shielded action. All they can see is that an action was initiated from the Namada USS. The rule of thumb is clear: the larger the USS, the stronger the privacy mechanisms.
To interact with applications on other chains, users don’t sign a simple transfer, but instead they sign a sequence of instructions from Namada. This opens up a realm of applications, such as:
- Shielded Staking on Cosmos: Users would unshield ATOM, transfer it to the Cosmos Hub, and proceed to stake.
- Shielded Swaps on Osmosis: The SA allows users to unshield OSMO tokens, transfer these to Osmosis, conduct a token swap for ATOMs, then move these newly acquired ATOMs to the Cosmos Hub, and finally, return them to Namada where they are re-shielded. A single action, completed in a matter of seconds.
- Shielded Data Publication on Celestia: Users can unshield TIA tokens, followed by a transfer of TIA and specific data to Celestia, where the data is published and fees are handled, all under the veil of privacy.
- etc.
While SA leverages IBC for more than just transfers, it is important to note that any interactions on IBC are transparent (they reveal a transaction graph). To maximize privacy across Cosmos and IBC, it’s best to always keep assets shielded in the USS unless they’re needed for an action and to avoid easy-to-correlate amounts over IBC.
SA is the key to modular privacy, as it allows the user to continue interacting with the tokens, apps and chains that they’re currently with privately, without requiring the chains or application to make any changes.
Conclusion
In closing, Namada's modular privacy is not constrained to the Cosmos and Interchain ecosystems. The protocol is architected for extensibility, poised to integrate seamlessly across diverse blockchain domains.
The implementation of the Namada trustless two-way Ethereum bridge serves as concrete evidence of its adaptability, facilitating the extension of Namada's modular privacy to other tokens and dApps beyond its foundational ecosystems.
As blockchain technology matures, the need for robust, scalable, and private interactions becomes increasingly critical. Namada is not merely accommodating this future; it is helping craft it.
🛠️ Want to Get Involved?
The developments detailed above invite a natural query: How can one become a part of Namada's journey?
To truly comprehend the breadth and depth of the Namada ecosystem, one must engage with its vibrant community.
Strengthen Namada's decentralized environment by becoming a node operator. Your participation in running a full node adds to the network's resiliency.
As a validator, you become a vital participant, responsible for voting on state-transitions and proposing new blocks, reinforcing the integrity and security of the Namada network.
Explore Namada's architecture and possibilities by setting up a local network. Experiment, innovate, and understand.
Namada is a Proof-of-Stake Layer 1 blockchain protocol that delivers multichain, asset-agnostic privacy. Utilizing advanced zk-SNARKs technology, Namada facilitates indistinguishable transactions for various assets in its unique Multi-Asset Shielded Pool (MASP). Developed by Heliax in the Anoma ecosystem, Namada is working toward a future where digital asset privacy becomes the norm, not the exception.