Encoins, Cardano’s first-ever privacy protocol, is scheduled to have its mainnet launch on Nov. 30, according to a Friday announcement.
Encoins is designed to enhance the privacy and security features of transactions on the popular blockchain, a move that shows the growing demand for confidentiality in digital currency transactions
The protocol’s technical specs
The upcoming Encoins protocol on the Cardano blockchain introduces a mechanism for private transactions using zero-knowledge proofs, a key cryptographic tool.
This protocol allows users to deposit Cardano’s native cryptocurrency, ADA, to mint ENCOINS, a unique form of NFTs representing encrypted value.
These ENCOINS can then be converted back to ADA, but only by the user with the corresponding minting key, ensuring privacy in transactions.
Additionally, the protocol employs a decentralized relay node system, where holders of the ENCS token can stake their tokens to support network operations and earn a portion of transaction fees. In such a way, they can contribute to the network’s security and efficiency.
More demand for privacy
The crypto space is already occupied by other privacy-focused projects such as Zcash and Monero, which also utilize zero-knowledge proofs to maintain transactional privacy.
This technology is pivotal in enabling the authentication of transaction details while preserving the confidentiality of the data involved.
Last November, Input Output, Cardano’s developer arm, launched a new privacy-focused blockchain called Midnight.
According to the Friday announcement, the Encoins team is also “exploring the possibility” of building on top of Midnight.