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Railgun: privacy on Ethereum only through smart contracts

3 min read



Privacy is a major issue for users of decentralized finance (DeFi) and cryptocurrencies in general. The widespread belief in anonymity has led many to use currencies such as BTC and ETH in the past, but it is rapidly disappearing as cases of increased surveillance become apparent. A group of scientists is working to solve this problem through a project known as the Railgun Project.

What is Railgun?

Railgun is a collection of smart contracts (computer code that enforces rules and performs the function of fulfilling transactional obligations in DeFi applications) that uses evidence of zero knowledge (which are ways to prove certain things about entities without revealing what they are, or sensitive details about them). Their interaction allows Railgun users to exchange currencies and use applications in the DeFi space without linking to their original address or other activity. Their finances will remain private.

According to the project’s lead researcher, Emmanuel Goldstein, the system will be fully operational in the ETH network in July. Users will be able to enter ETH, USDC, renBTC, renZEC and other tokens into the system. These tokens become anonymous, allowing them to perform private actions on embedded tokens.

The project team also announced a private DEX that will be part of the private system, and the ability for third-party wallet applications to automatically include Railgun’s privacy as one of the features. By creating an ecosystem where privacy, anonymity, transfers, business and other activities take place in one place, all participants benefit from an ever-increasing fund of anonymity. All users of the system can use the activities of others.

What makes Railgun different?

Previous iterations of privacy protocols have failed to achieve the flexibility, security and privacy that Railgun guarantees. Existing solutions, such as mixers, have little function and convenience. For example, they do not allow internal shielded transfers, cannot communicate with smart contracts, and users must operate with fixed denominations, which means that users cannot efficiently perform transactions using their protocol.

Technology behind Railgun

The basic component that brings privacy and anonymity in Railgun is the use of Zero-Knowledge Proofs. Like Zcash, Railgun uses zk-SNARKS to prove the validity of shielded transactions without revealing any information about the sender, recipient, or amount of the transaction.

Once the proof is verified by a smart contract, the Merkle tree is updated, which accumulates all generated banknotes (ie the encrypted balance owned by the public key controlled by the recipient) and invalidates the consumed banknotes (ie owned by the sender). This prevents users from spending twice or making money from the air. Simply put, zksnarks is a system of proof and “zero-knowledge” means that the verifier does not obtain any information about the sender, recipient or amounts of the transaction, which gives users complete privacy and anonymity.


If you have used MetaMask, you will find it familiar with using Railgun. Basically, you won’t be in charge. At the same time, it is open-source, which gives you the freedom to edit.

MetaMask: complete guide

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.
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