Ethereum recently introduced a groundbreaking on-chain privacy feature known as Privacy Pools, aimed at safeguarding users from illicit funds. This new layer of privacy allows users to make on-chain transactions without the risk of their identity or wallet balance being exposed to unwanted parties.
The concept behind Privacy Pools is to provide users with a high level of privacy while ensuring that illicit funds, such as those associated with groups like Lazarus Group, are kept at bay. Oxbow, the firm behind the Privacy Pools protocol, emphasized the importance of maintaining a balance between privacy and security, stating that it is crucial to “Make Privacy Normal Again.”
One of the key advantages of Privacy Pools is its non-custodial nature, which gives users greater control over their transactions. Initially, the protocol has set deposit limits between 0.1–1 ETH ($186–$1800), with plans to raise these limits after an initial monitoring period.
While Privacy Pools is not the first privacy-enhancing tool on Ethereum, it aims to address the shortcomings of existing solutions like Tornado Cash and Railgun, which have faced scrutiny for enabling money laundering activities. Ethereum co-founder Vitalik Buterin, a strong advocate for privacy technology, has already tested the Privacy Pools platform, highlighting its potential to strike a balance between privacy and compliance.
Despite the positive impact of Privacy Pools, Ethereum’s sentiment has not seen a significant improvement. Since February, the sentiment surrounding ETH has been predominantly negative, reflecting a sense of caution among investors. Social volume for Ethereum also decreased in March compared to February, indicating a lack of market interest in the altcoin.
As a result, Ethereum’s price has remained below $2K, and there is a possibility that it could drop further to $1.6K if demand does not pick up in the coming days. It is essential for Ethereum to attract more market interest and improve its sentiment to regain momentum and potentially reach higher price levels.