Authored by: Castle Labs(@castle_labs)
Compiled by: AididiaoJP, Foresight News
The Solana Privacy Ecosystem is Still in Its Early Stages
We once discussed Solana privacy with Helius CEO @mert. In his own words, Solana is "a bit behind" on privacy.
So, what should a mature privacy ecosystem look like?
Essential elements include:
- Formal verification
- No committees
- Immutability
- Open-source code
Solana's unique architecture also brings different privacy priorities compared to EVM chains. Mert specifically mentioned ZK Compression: "On Solana, we can achieve large-scale and composable privacy protocols without persistent rollups, at least when based rollups are possible."
In Solana's specific context, the two most relevant verticals for privacy development are Neobanks and Private DeFi. However, in terms of tools and user experience, Solana still has a significant gap to a fully functional, composable privacy ecosystem.
We also asked Mert about his view on the privacy tech stack. As the report highlights, privacy should not be seen as a single technology, but as an "ultimate privacy stack" where all primitives eventually work together. For Mert, the endgame will be a combination of FHE (Fully Homomorphic Encryption) and ZK (Zero-Knowledge Proofs). TEE and MPC are practical for certain use cases but cannot provide sufficient guarantees in adversarial systems.
Finally, we asked him about Helius Privacy.
Helius Privacy will be developed as a ZK-based UTXO privacy layer on Solana. It will utilize "Zones," allowing individual companies to choose their own trade-offs.
It will also provide a public Zone for all regular users, offering full anonymity in an immutable, formally verified manner. More details will be announced soon.
Against this backdrop, this article focuses on how the Solana privacy ecosystem is addressing various privacy challenges.
Private Compute
Currently, there are mainly two providers in this space: @Arcium and @magicblock.
Both are addressing a similar problem: private computation.
Arcium processes arbitrary data through MPC (Multi-Party Computation). It splits the data and distributes it across independent node clusters that collectively compute a result without seeing individual inputs. Meanwhile, Arcium operates as an independent compute network, with final settlement occurring on Solana, which handles task ordering, network security, and fee payment.
All this private computation happens within Multi-Party eXecution Environments (MXEs) – customizable, parallelizable execution environments.
Beyond solving computation problems, Arcium's product also serves Solana's broader privacy ecosystem. They are building the Confidential SPL (C-SPL) token standard, enabling confidential tokens, transfers, and transactions on Solana.
We asked the Arcium team about the demand sources. As expected, the main sources are payments and crypto data analytics, while institutional demand is also growing, especially in healthcare – enabling the training of models on encrypted datasets. C-SPL also enables seamless private transfers, further attracting institutional interest.
Regarding data, since its Alpha mainnet launch in early February 2026, Arcium has processed over 900,000 computations and 3.5 million transactions, with most growth occurring in early May.
Currently, most demand comes from early applications like Umbra. In the coming weeks, applications like ZINC and Crafts will also go live, and we expect demand to increase further.
ZINC is working on encrypted Proof of Work mining, while Crafts uses Arcium for sealed-bid auction fundraising, allowing startups to tokenize part of their equity through fair price discovery.
"Some exciting new things being built on Arcium include: capital formation using sealed bids, opportunity markets, encrypted settlement in prediction markets, and other financial privacy applications."
Many of these use cases are creating new or improved markets where users may not even be aware of the privacy aspects.
Magic Block, on the other hand, tackles private computation via TEE (Trusted Execution Environment), while Arcium relies on the cryptographic guarantees of MPC. Its product works by Intel TDX creating a hardware-verified black box – a Private Ephemeral Rollup (PER) – where transactions are aggregated and processed before being submitted back to Solana.
MagicBlock helps developers retain these properties throughout the stack, including: confidentiality (protected state), scalability (high throughput), composability (still interoperable with other Solana programs), and compliance (an access control layer).
While the two take different paths to solve the problem, both can generate deployable private order books, dark pools, and private DeFi rails with minimal code changes. This is already evident in the ecosystem built on Arcium, spanning DeFi, prediction markets, Neobanks, and more.
Private Transfers and Balances
As privacy compute infrastructure like Arcium and MagicBlock gradually improves, use cases built on top of this infrastructure are also growing, including private transfers.
@UmbraPrivacy is the first, built on Arcium's MPC infrastructure. Umbra introduces Encrypted Token Accounts (ETAs), which are direct counterparts to Solana's standard Associated Token Accounts but store balances in encrypted form, providing:
- Amount privacy: Transaction amounts are encrypted using Rescue cryptography
- Balance privacy: Balances are stored as ciphertext
- Association privacy: Complete on-chain dissociation between sender and receiver via mixing pools + ZK proofs
Additionally, Umbra offers compliance features, allowing users to grant selective viewing access to auditors and compliance systems without exposing the full transaction history. This is crucial for institutional workflows and for users who want to prove fund holdings without revealing detailed transaction histories.
In the privacy wallet space, @theprivacycash and Hush are two others.
Privacy Cash uses Tornado-style mixing pools for SOL: Users deposit SOL to generate a commitment added to a Merkle tree, then use ZK proofs to withdraw to any recipient, completely severing the on-chain link between deposit and withdrawal addresses.
Hush is inspired by Zcash but adds DeFi utility. Users deposit SOL into Hush's mixing pool, which is automatically converted to jitoSOL, passively earning staking rewards and MEV revenue while remaining private. Inside the pool, users can transfer to other Hush participants, receive funds, and conduct multiple transactions without touching Solana's public ledger. Upon exiting, withdrawals are untied from the original deposit via mixing. Pool transfers cost 0.01 jitoSOL, and withdrawals incur a 50 bps fee. Hush also integrates with Jupiter for private swaps and implements geoblocking for sanctioned regions, giving it a good compliance profile among institutional users.
No Onchain Trail
Private transfers solve the problem for companies and institutions paying employees or conducting private transactions on-chain. But to go further, we need to embed privacy into everyday on-chain behavior, especially trading.
Every order placed on a public AMM is a signal that front-runners, copy traders, and MEV bots can read and exploit. Currently, some protocols on Solana are addressing this issue.
@encifherio is a privacy-first DeFi interface that routes trades through Jupiter while keeping trade details private. The team states: "Execution quality remains the same because we don't add custom routing; we use the same routes and liquidity provided by Jupiter."
It wraps the tokens a user wants to swap and encrypts swap details using ElGamal encryption. The on-chain record only shows state changes of the wrapped asset type, enough for Jupiter to know it's routing the correct token. The number of trades, counterparties, participants, and even whether a trade was executed are all handled within a TEE environment (AWS Nitro Enclaves) and never broadcast publicly. This enables private swaps at scale.
@VanishTrade approaches it from a different level. They are building private trading infrastructure using shielded transaction routing to protect trading strategies from leaving an on-chain trail. Unlike encifherio wrapping tokens, Vanish routes trades through shielded liquidity. Additionally, Vanish launched the Vanish Integrity Framework (VIF), powered by Elliptic and Range, embedding safeguards to prevent routing any illicit transactions.
Darklake is another contender in this category, building ZK-native liquidity infrastructure and dark pools. Its zk-AMM, called the "blind slippage pool," is a commit layer added on top of an AMM to hide slippage data before execution. Searchers cannot read order intent before a trade lands but can verify the outcome afterward. This delay asymmetry prevents sandwich attacks while preserving verifiability. They have extended this model to private perpetuals (zk-Perps) using Arcium's compute layer, and an inference framework called Zyga, which abstracts proof complexity, providing builders with a foundation for secure logic and coordination. Recently, they also expanded into an infrastructure protocol, allowing apps and users to verify, connect, and compute privately using a "Proof as Intelligence" model.
Private Prediction Markets
Private prediction markets are a more advanced privacy application, as users' strategies can easily be copied, losing their edge. To solve this, protocols are using Arcium's infrastructure to build specialized dark pools for prediction markets.
@meleemarkets is building prediction markets supporting private order flow. They encrypt the order book through Arcium's MPC infrastructure. Participants can place orders without exposing their direction in the public market until settlement.
The Private AI
As AI agents increasingly operate on-chain, will every query they make and every piece of PII they consume be permanently public?
Loyal answers this with its decentralized, censorship-resistant smart agreements protocol. This protocol is built using Magic Block's ephemeral rollup execution and Arcium's encrypted compute. They are building on-chain AI that protects user data: conversations, queries, preferences, and activities—all encrypted and stored on Solana with strict access rules. Users own and can export their encrypted conversation history and can self-host the frontend without losing any data. Furthermore, Loyal supports private trading and fund management, allowing depositors to earn yield in a private state.
