# The Full-Stack Privacy Ecosystem

> Privacy as Infrastructure for User Protection and Institutional Adoption

- Source: https://castlelabs.io/research/reports/full-stack-privacy
- Published: June 2026, 64 pages; data as of June 2026
- Authors: Francesco, Noveleader
- Publisher: Castle Labs (https://castlelabs.io)
- Full PDF (free, email required): https://docsend.com/v/sjv2g/thefullstackprivacyecosystem

## Thesis

Public ledgers expose balances, counterparties and transaction history by default. The report maps privacy infrastructure across L1s, Ethereum, L2s, application layers and Solana, then assesses how selective disclosure can protect users while allowing institutions, auditors and regulators to verify specific facts when required.

## Key findings

- About 4.9 million ZEC, slightly less than 30% of supply, was held in shielded pools at publication.
- Railgun had processed more than $5 billion in shielded volume, while Arcium had processed more than 3.5 million transactions after its alpha launch.
- Selective disclosure offers a practical route to confidential onchain activity without removing auditability where proof is legally or operationally required.

## Key numbers

- ~30%: Of ZEC supply locked in shielded pools (4.9M ZEC)
- $5B+: Railgun cumulative shielded volume
- $410M+: Tornado Cash TVL despite sanctions
- 3.5M+: Transactions on Arcium since February Alpha
- 20 TPS: Zama FHE throughput, with ASICs targeting 1,000+
- $12.4M+: Railgun fees generated by publication

## ZK vs FHE vs MPC vs TEE: Which Privacy Technology Does What?

Onchain privacy rests on four main technologies, and most serious protocols combine several of them. ZK proofs show that a statement is true without revealing the data behind it. Fully homomorphic encryption (FHE) lets a network compute on encrypted data without decrypting it. Multi-party computation (MPC) lets parties who do not trust each other compute a shared result without seeing each other's inputs. Trusted execution environments (TEEs) run code inside a hardware enclave that even the machine's operator cannot read.

The trade-off is between guarantees and speed. ZK and FHE rely on cryptography; TEEs rely on the hardware maker not being compromised, and MPC relies on participants being online and not colluding, which is hard to detect.

**The four privacy technologies compared**

| Technology | What it does | Main limitation | Who uses it |
| --- | --- | --- | --- |
| ZK proofs | Prove a computation or statement is correct without revealing inputs | Proving is expensive, especially client-side | Zcash, Railgun, Privacy Pools, Aztec, Starknet STRK20 |
| FHE | Compute directly on encrypted data | Slow and costly, though new schemes are closing the gap | Zama, Fhenix, Octra |
| MPC | Split keys or data across nodes so no single node sees everything | Needs participants online; latency grows with participants; collusion is hard to detect | Arcium, Near Chain Signatures, Nillion |
| TEE | Execute on plaintext inside an isolated hardware enclave | Trust in the hardware vendor (for example Intel SGX keys) | Secret Network, Oasis, MagicBlock, Near Confidential Intents |

Source: Castle Labs, The Full-Stack Privacy Ecosystem (June 2026)

Zama shows how the pieces combine: FHE for computing on encrypted data, MPC to decentralise its network, and ZK only to verify that encrypted user inputs are valid.

## Monero vs Zcash: How the Two Privacy Coins Differ

Monero is private by default. It hides senders with ring signatures, receivers with one-time stealth addresses, and amounts with Ring Confidential Transactions. Zcash is private by choice: users opt in to shielded z-addresses that use zk-SNARKs, which allows selective disclosure but leaves a smaller anonymity set.

Monero's share of the privacy coin market hit an all-time high of over 80% in September 2025 and has since fallen to about 40%, largely because of the rise of Zcash.

**Monero and Zcash side by side, June 2026**

|  | Monero (XMR) | Zcash (ZEC) |
| --- | --- | --- |
| Privacy model | On by default for every transaction | Opt-in shielded pools |
| Core tech | Ring signatures, stealth addresses, RingCT | zk-SNARKs |
| Adoption of privacy | All transactions | About 4.9M ZEC shielded, slightly under 30% of supply |
| Main weakness | Probabilistic privacy that AI-assisted chain analysis could erode | Small shielded set can be de-anonymised through entry and exit timing |

Source: Castle Labs, The Full-Stack Privacy Ecosystem (June 2026)

In late May 2026 a researcher found a bug that could have let anyone inside Zcash's Orchard pool mint counterfeit ZEC. It was found on 29 May and fixed by 1 June, but because the pool is private there was no way to prove cryptographically whether it had been exploited, and ZEC fell about 50%. The Ironwood upgrade, expected in late July 2026, moves funds to a new pool through a turnstile so anyone can verify total supply.

## The Solana Privacy Ecosystem in 2026

Solana's privacy stack is young but moving fast. Helius CEO Mert told us Solana is lagging on privacy, and that a mature ecosystem needs at least two very large privacy pools or one clearly decentralised pool, with formal verification, no committees, immutability and open-source code as non-negotiables.

Two compute layers sit underneath most apps: Arcium, which uses MPC, and MagicBlock, which uses Intel TDX enclaves in Private Ephemeral Rollups. Arcium's alpha mainnet launched in early February 2026 and has processed over 900,000 computations and 3.5 million transactions.

**Solana privacy projects by category**

| Category | Projects | How they work |
| --- | --- | --- |
| Private compute | Arcium, MagicBlock | MPC clusters (Arcium) or TEE-based Private Ephemeral Rollups (MagicBlock), settling on Solana |
| Private transfers and balances | Umbra, Privacy Cash, Hush | Encrypted token accounts on Arcium (Umbra); Tornado-style SOL pool (Privacy Cash); shielded jitoSOL pool earning staking yield (Hush) |
| Private trading | encrypt.trade, Vanish, Darklake | Encrypted swaps routed through Jupiter inside AWS Nitro enclaves; shielded routing; ZK blind-slippage AMM and zk-Perps |
| Private prediction markets | Melee | Order book encrypted with Arcium MPC until settlement |
| Private AI | Loyal | Encrypted conversations and queries stored on Solana, using MagicBlock and Arcium |
| Coming | Helius Privacy | ZK-based UTXO privacy layer with configurable Zones and a public zone |

Source: Castle Labs, The Full-Stack Privacy Ecosystem (June 2026)

## Data tables

**Privacy protocols by the numbers, June 2026**

| Protocol | Type | Key figures |
| --- | --- | --- |
| Railgun | Privacy layer for Ethereum DeFi | Over $5B transaction volume; over $80M TVL; over $12.4M total fees; 15-20K transfers a month |
| Privacy Pools | Compliant mixer on Ethereum | About $8M TVL (over $4.4M USDT, $1.5M ETH, $1.5M USDC) |
| Tornado Cash | Immutable mixer on Ethereum | Over $410M TVL despite US sanctions |
| Zcash | Privacy L1 | About 4.9M ZEC shielded, slightly under 30% of supply |
| Aztec | Privacy L2 | Alpha mainnet March 2026; over 23 active prover nodes |
| Arcium | MPC compute on Solana | Over 900K computations and 3.5M transactions since February 2026 |
| Zama | FHE infrastructure | About 20 TPS today, targeting over 1,000 TPS with dedicated hardware |

Source: Castle Labs, The Full-Stack Privacy Ecosystem (June 2026)

## Charts

- Zcash shielded pool supply (PDF page 20): A privacy set is only as strong as its adoption. With a small shielded set, the timing of entries and exits and links to transparent addresses can still de-anonymise users.
- How assets move through Railgun (PDF page 25): Once tokens are shielded in Railgun's contract they look like every other shielded token, without mixing. Users can send, swap and use DeFi privately, then withdraw to a public address.
- Railgun shielded volume by month (PDF page 26): Every Railgun transfer, swap and loan adds noise to the privacy set. Railgun has processed over $5 billion in volume, 15,000 to 20,000 transfers a month recently, and over $12.4 million in fees.
- Public vs private data in Aztec (PDF page 31): Aztec, live in alpha since March 2026, runs private functions on the user's device and proves them onchain. A nullifier proves a note exists without revealing which one.
- How EVM apps use Secret Network (PDF page 35): Secret has run private smart contracts since 2020. An EVM app requests data, a Secret contract computes it privately inside a hardware enclave, and sends the result back.
- Near Confidential Intents TVL (PDF page 39): Confidential Intents run on a private Near shard secured by permissioned validators. Token pairs, order sizes and counterparties stay hidden; only settlements are public.

## Questions

### What is full-stack privacy in crypto?

The idea that privacy has to be solved at every layer where users leak data, not just in the token. Public transactions reveal what you trade, RPC nodes see every query and your IP, network timing can de-anonymise encrypted traffic, and wallet interfaces can fingerprint devices across fresh addresses. Full-stack privacy combines L1s, Ethereum privacy layers, L2s, app-layer compute and wallet tooling.

### What is the difference between ZK, FHE, MPC and TEE?

ZK proofs prove something is true without revealing the data. FHE computes on encrypted data without decrypting it. MPC splits a key or computation across parties so no single party sees the inputs. TEEs run code on plaintext inside a hardware enclave, so they depend on trusting the chip maker. Most production systems combine two or more.

### Is Monero or Zcash more private?

Monero is private by default for every transaction, while Zcash privacy is opt-in, with about 4.9 million ZEC, slightly under 30% of supply, in shielded pools. A smaller shielded set is easier to de-anonymise through timing. Monero's guarantees are probabilistic, though, and could be weakened by AI-assisted chain analysis.

### What happened with the Zcash Orchard bug in 2026?

A researcher found a bug that could have let anyone inside the shielded Orchard pool mint counterfeit ZEC. It was found on 29 May 2026 and fixed by 1 June, but the pool's privacy meant there was no way to prove whether it had been exploited, and ZEC fell about 50%. The Ironwood upgrade forces funds out of the old pool through a turnstile so the supply can be verified.

### How does Railgun stay compliant?

Through Proof of Innocence: when tokens are shielded, a ZK proof is created showing they are not linked to a preset list of illicit wallets and interactions, without revealing user data. The contract can be upgraded by the RAIL DAO but only with a 7-day delay, giving users time to exit. Railgun has processed over $5 billion of volume and holds over $80 million of TVL.

### Can onchain privacy be compliant?

Yes, through selective disclosure. Railgun's Proof of Innocence, Privacy Pools' Association Set Provider, Umbra's auditor viewing keys and Starknet STRK20's threshold-controlled integrity council all hide data from the public while letting users prove specific facts to auditors or regulators. We think selective disclosure, not total anonymity, is the path to adoption.

### What privacy projects are building on Solana?

Arcium (MPC compute) and MagicBlock (TEE rollups) at the base; Umbra, Privacy Cash and Hush for private transfers; encrypt.trade, Vanish and Darklake for private trading; Melee for private prediction markets; Loyal for private AI; and Helius Privacy, a ZK-based UTXO privacy layer, coming next.

## Method

Castle maps privacy systems by execution layer and technology, including ZK proofs, FHE, MPC and TEEs. The report combines protocol documentation, public dashboards, onchain usage data and interviews to compare privacy guarantees, composability, compliance controls and adoption.

## Sources

- [L2Beat privacy overview](https://l2beat.com/privacy/summary)
- [Railgun protocol data](https://dune.com/railgun_project/railgun)
- [Ethereum Kohaku repository](https://github.com/ethereum/kohaku)
- [Zama protocol litepaper](https://docs.zama.org/protocol/zama-protocol-litepaper)
- [Arcium network explorer](https://explorer.arcium.com/)