Wholesale capital has a hard limit on what it will do over a transparent chain. Allocators have been hitting that limit for years.
A retail user moving a few hundred dollars typically doesn’t care who is watching, but a pension allocator rebalancing a multi-billion-dollar book does. A treasury team at a stablecoin issuer cannot run reserve management on rails where every counterparty and position is legible to the open internet. So they don't.
Circle moves USDC on-chain and runs almost everything behind USDC off-chain. Other institutions do the same. The technology was close, and the capital was ready, but privacy was missing.
"Privacy is actually a fundamental thing. It's a human right. It's a business need."
— Shaul Kfir, Co-founder, Digital Asset.
That gap is the subject of Episode 3 of Quadrillions. For the full discussion, click here.
Episode three pairs two of the most qualified privacy researchers in the industry.
Eli Ben-Sasson is co-founder and CEO of StarkWare, a founding scientist of Zcash, and a co-inventor of the ZK-STARK. Shaul Kfir co-founded Digital Asset, co-architected the Canton Network, and was a co-author of libsnark, the seminal zkSNARK library.
Kfir was Ben-Sasson's research assistant at the Technion in the early 2010s, working on the cryptography that would later power both Zcash and StarkWare.
Eric Saraniecki, back as host, anchors the discussion on a thesis that the two guests share. Privacy in crypto is a structural property of any chain that institutions can use at scale. Without it, allocators steer clear.
The public often considers on-chain privacy through two misconceptions.
First, "ZK rollups." Most use zero-knowledge proofs for integrity and scale, not privacy. Transaction data on Optimism, Arbitrum, and similar systems stays public. The privacy capability of zkSNARKs is optional, and most ZK rollups don't use it.
Ben-Sasson and Vitalik Buterin spent years pushing the industry to call these validity rollups and lost the naming war.
"Getting privacy is easy. The hard part is integrity." — Eli Ben-Sasson, CEO, StarkWare.
It’s relatively easy to encrypt a transaction. The hard part is proving that the encrypted operation was honest, used funds the sender owned, and ran where no central party gets to verify.
Second, privacy can't be bolted on later. It reaches into the data model and consensus, changing how oracles work, how exchanges see collateral, how wallets render information. Wrap an Ethereum payment in a ZK proof and the statement still names sender, recipient, and amount.
Ben-Sasson's CFO flagged that paying StarkWare's 200 employees in stablecoins on a transparent chain would put the full payroll on a public block explorer—a clear non-starter.
"We keep bumping up into this artificial low ceiling on the adoption of these networks because the wholesale capital markets are not willing to adopt it." — Eric Saraniecki, Co-founder, Digital Asset.
Canton makes each transaction visible to the parties entitled to see it, and no one else.
Saraniecki's analogy: opening a browser doesn't show you every account at chase.com; holding a Chase account doesn't give you a window into Bank of America. The internet has run on asymmetric visibility for decades. Canton applies the same pattern to value.
Underneath sits what Kfir calls a data distribution layer.
"The data itself is sent encrypted only to whoever is allowed to see it." — Shaul Kfir, Co-founder, Digital Asset.
Here's how it looks when broken down for each party in a transaction:
A stablecoin issuer on Canton sees every holding, transfer, and reserve movement of its asset, as regulators require. A wallet holder sees their own activity. Only the validators that are party to a given transaction see and validate it (see technical primer). Everyone else, including any synchronizer that orders and routes the encrypted messages, sees nothing.
Saraniecki's framing for the next two years inverts the privacy story. The headline asset class is real-world assets, but privacy is the precondition.
"It's not the big moment for privacy. It's a big moment for real-world assets. And the thing that unlocks that is privacy." — Eric Saraniecki, Co-founder, Digital Asset.
Institutional RWAs should start moving on-chain at the scale the last cycle promised. Chains that get asymmetric visibility right will absorb that flow.
Ben-Sasson is making the same bet from the other end, building Bitcoin financialisation on Starknet for individuals and smaller companies that need privacy with usable UX.
Next in the series: Episode 4 (Part 1) on the asset class likely to put privacy-preserving rails into production first, and the regulatory and reserve-management questions that come with scale.
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Quadrillions is a miniseries produced by Blockworks and sponsored by Canton Network. Listen to the full episode at quadrillionspod.com or click one of the links below.
Disclaimer: Nothing on this show is a recommendation to buy or sell securities or tokens. Views expressed are solely those of the guests.