Many people do not understand @VitalikButerin's intention behind promoting Kohaku and donating 256 ETH. If you think it is just a charitable donation, you are greatly mistaken: this involves the evolutionary logic of three models: "absolute privacy," "optional privacy," and "privacy as security." Let's discuss:

1) "Absolute privacy" is the functionality originally possessed by Tornado Cash, Railgun, Aztec, and Monero, among others. The core logic is to create a completely black-box "privacy pool." Once funds enter, all transaction information, including sender, receiver, amount, etc., is encrypted, and the outside world cannot see anything, including regulators!

This means that if dirty money and legitimate funds are mixed in this privacy pipeline, it will lead to privacy tools being used for money laundering, which will result in regulatory sanctions. Therefore, currently, the absolute privacy solution can only remain at the tool service level; to grow, it must explore embracing regulatory solutions.

2) "Optional privacy" is a compromise solution that @Zcash has been exploring recently with a dual-track system of transparent addresses and shielded addresses. The core logic is to allow users to actively choose: either use a fully shielded address, which can be likened to absolute privacy, or use a transparent address to meet regulatory needs.

This is certainly progress, as it adds a layer of intention on top of the tools. If the entity is an individual, they can choose absolute privacy; if the entity is a regulatory-compliant organization with an audit process, they will naturally choose optional privacy.

However, advancing such solutions is not easy. Because with optional transparent privacy in place, using a shielded address is akin to labeling oneself as "there's no silver here," effectively stigmatizing privacy and making it a privilege for a very few rather than a standard for the masses.

3) The series of actions by Vitalik and the Ethereum Foundation has one goal: to upgrade optional privacy to a standard feature of "privacy as security." This is what V has always emphasized: Privacy is not a feature; it’s a prerequisite for security!

This concept presents a challenge: how to ensure privacy while not being targeted by regulators? In other words, default privacy + optional disclosure = the realization of decentralized privacy protection and regulatory compliance solutions.

Thus, the design of Kohaku follows the path of Stealth addresses + elliptic curve cryptography + ZK proofs, among other technical solutions, to achieve a balance between privacy protection and optional disclosure. Kohaku is more like a modular privacy embedding layer that can directly serve wallets, promoting privacy through application layer habit migration.

But this is not enough. Vitalik is well aware that the significant challenge of privacy narratives lies in the "off-chain environment." On-chain, there are many decentralized verification infrastructures and technologies like ZK and FHE to achieve balance, but protecting user metadata privacy off-chain and establishing a decentralized messaging layer has become a bottleneck issue.

This is why there have been donations to @session_app and @SimpleXChat; it is actually to explore how to achieve end-to-end encrypted communication in a decentralized environment, thereby completing the full-process privacy pipeline on-chain and off-chain.

The phone number-free registration of Session, along with SimpleX's ability to remove even IDs, reinforces the fact that privacy (off-chain: IP addresses, communication partners, etc.; on-chain: transaction links, interaction details, etc.) is part of the underlying security framework.

Therefore, following Vitalik's directive, the privacy track can also allow many technical narrative projects to align with major players, including the universal ZK aggregation verification layer @boundless_xyz, the embeddable intentional privacy trading layer @anoma, and the cryptographic holy grail-level FHE solution @zama, among others.

Do you understand now?

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