Josh Swihart, CEO of the Zcash Open Development Lab, built surveillance systems earlier in his career and now sees private money as the only defense. He argues that without built-in privacy, AI agents can map a citizen’s entire life from a public ledger.
His project is undergoing a structural reset. Backed by a $25 million raise from Paradigm and a16z, ZODL is shifting from a non-profit foundation to a for-profit, product-led startup. The key adoption metric isn't price, but the shielded pool - the amount of ZEC held in private addresses. It grew from 11% to over 30% of supply in two years, indicating a move toward self-custody and real utility.
"Privacy in internet money is existential to prevent dystopia."
- Josh Swihart, Bankless
Yet Zcash faces a fundamental trust crisis. According to Rabbit Hole Recap, developers found an undetectable infinite inflation bug in the newest privacy pool. Instead of a public disclosure, they performed a quiet soft fork to freeze the pool by coordinating with a handful of dominant miners. This level of centralization, argue hosts Marty Bent and Matt Odell, proves the project’s fragility.
Ethereum, meanwhile, is a transparency trap. On Bitcoin Takeover, Kieran Mesquka notes that buying coffee with ETH can let a waiter see your entire trading history on Etherscan. His project, Railgun, uses ZK-Snarks to bring Zcash-style privacy to DeFi, allowing users to swap on Uniswap or supply liquidity from shielded balances.
Mesquka defends Railgun’s Private Proof of Innocence system, which lets users prove their funds aren’t linked to illicit actors without doxxing themselves to a central authority. This pragmatic approach, he argues, is necessary to maintain access to the broader financial system, even if it means accepting some screening.
"Ethereum’s transparency is valuable for auditing lending protocols. Total privacy in every layer would break the visibility that makes decentralized finance safer than shadow banking."
- Kieran Mesquka, Bitcoin Takeover Podcast
The push comes amid a legislative threat. Rabbit Hole Recap highlights the Digital Asset Market Clarity Act, backed by 160 former intelligence officials, which aims to apply Bank Secrecy Act requirements to non-custodial protocols. The hosts frame it as a surveillance expansion disguised as regulatory clarity.
While Bitcoin’s culture of ossification, as Mesquka calls it, keeps advanced privacy on the periphery, Ethereum-based projects are betting that opt-in, product-led privacy is the viable path forward - flaws and all.
