Public blockchains lack innate privacy, making all transactions publicly viewable. Although it is not necessarily a bad trait, many users actively seek privacy solutions. Panther Protocol, a project focused on DeFi privacy and interoperability, details how it will achieve this goal in its whitepaper.
The Need For Privacy In DeFi
All decentralized finance transactions take place over public blockchains like Ethereum, EOS, and others in their current form. These ecosystems cater to the needs of those who have no issues with having their financial actions out in public. Blockchain analysis firms constantly monitor these networks for suspicious activity, eroding any degree of pseudonymity and privacy users may think they have access to.
Solving this pressing problem seems simple on paper, yet it is incredibly complex in reality. It is not sufficient to provide optional privacy, as such features need to be enabled at the protocol level first and foremost. Unfortunately, none of the public blockchains mentioned above can default unless the developers revamp the entire code. That option will always be on the table, yet it may require a blockchain hard fork, proving catastrophic if the community remains divided.
Another way to achieve privacy in the DeFi industry is by exploring new projects and protocols coming to market. Panther prioritizes preserving privacy for digital assets, as can be seen in its detailed whitepaper. Bringing confidential transactions to DeFi is just one aspect. The team also aims to enhance overall interoperability, strengthening the mainstream appeal and adoption of decentralized finance solutions.
A Closer Look At The Panther Whitepaper
Achieving privacy on the protocol level is one thing, but expanding this concept to the broader DeFi industry is something else entirely. The team explains how they will use end-to-end on-chain privacy in the Panther whitepaper through zkSNARKs and game theory involving pricing privacy. The concept of zkSNARKs is common in the cryptocurrency world, as various privacy-oriented coins have experimented – or are experimenting – with integrating this technology.
However, it is essential to point out that Panther goes one step further. The protocol lets users mint zAssets – privacy-enabled assets backed by existing cryptocurrencies through its Panther Vaults. These zAssets will be compatible to use across various decentralized finance solutions. The whitepaper also talks about the minting and burnet of zAssets in more detail and covers topics like privacy mining and the Panther DAO. Empowering community members to govern the protocol through quadratic voting establishes the viability of this privacy-oriented solution.
Providing protocol-level privacy is a solid approach, but one cannot lose track of customization. Panther offers a feature for users to determine how much privacy they need for transactions. Returning complete privacy control to the user instead of making it opt-in or preventing community members from making adjustments – is crucial in the decentralized world. More importantly, this approach makes Panther fully future-compatible with compliance, should the need arise.
The whitepaper release marks another crucial milestone for Panther Protocol. Earlier, the team successfully raised $8 million through private funding rounds to work on its interoperable privacy DeFi solution. Over 140 investors contributed to these rounds, confirming the demand for privacy in this space.