Using privacy cryptography to bring trillions of institutional assets on-chain.

Source: Bankless

Translation: Blockchain Simplified

The "complete transparency" of public chains was once the proud banner of Ethereum, but has now become a deadly shackle that hinders the entry of trillions of traditional capital— on-chain, a large transfer can even cause an entire institution's trading strategy to be instantly hunted by the entire network.

How can Wall Street giants embrace Ethereum without exposing their commercial secrets and while meeting strict regulatory requirements?

The ETH Systems, which officially split from the Ethereum Foundation, is providing the ultimate answer to the decentralized world. In this article, two founders who span top investment banks and the forefront of core cryptography will deeply reveal how they break the paradox of "privacy and transparency cannot coexist" through modern zero-knowledge proofs, paving the way for the entire industry to project a future blueprint for trillions of institutional assets to compliantly go on-chain.

Origin and Mission: Why Ethereum Needs Institutional-Level Privacy

David: Welcome to Bankless. Today I am joined by Mo Jalil and Oscar Thorne. They are co-founders of ETH Systems. This is a new team that has officially split from the Ethereum Foundation, focusing on three key areas: Ethereum, institutions, and privacy. I believe this is extremely urgent for the entire crypto industry, and Ethereum is no exception, as this is a key piece that will truly elevate the Ethereum ecosystem to the next level. Oscar, Mo, welcome to Bankless.

Oscar: David, thank you for the invitation.

Mo: Thank you, David.

David: Let's get straight to the point: Why does Ethereum need privacy so urgently? Oscar, I’ll throw this question to you first.

Oscar: Ethereum is excellent as a foundational technology and operates incredibly stably as a trusted, neutral decentralized base layer. However, it does not have built-in privacy protection mechanisms at the protocol level. Therefore, many are attempting to fill this gap, whether through exploration at the foundational level or through the development of various solutions at the application layer. It can be said that privacy is the most critical missing puzzle piece in both Ethereum and the broader public chain landscape. And this is where we come in.

For us, the core focus of the team is on institutions. Large institutions typically care about two main things: first, the continuity and security of their core business; second, strict compliance requirements. Because of these two constraints, traditional institutions have tended to choose private networks or consortium chains that they can fully control for a long time.

At the same time, the public chain Ethereum possesses deep global liquidity, new business collaboration opportunities, and the potential to optimize its existing business models. Without modern cryptography as a bridge, institutions cannot meet the requirements for compliance and commercial confidentiality while enjoying the liquidity of public chains. They must have these privacy computing capabilities to truly embrace the enormous benefits that public chain Ethereum brings.

David: Can you talk about your backgrounds? For you, ETH Systems might be a new entity that has just been established for a month, but this is clearly a natural extension of your long-term deep involvement in the technology space. We need to understand what experiences you have accumulated in Ethereum, cryptographic privacy, and traditional financial institutions, and how those experiences converge in ETH Systems. Mo, please start.

Mo: I started in the traditional financial sector, building quantitative trading systems at leading investment banks like Goldman Sachs for about five years. That experience gave me a deep understanding of the true needs and pain points of large investment banks in system architecture, matching and clearing, and risk control compliance. I then worked in the hedge fund sector for a few years. To me, that cross-sector experience was very interesting.

I had been tracking frontier technology and remember being deeply shocked the first time I read the Bitcoin white paper, but at that time, using public chains in core financial business was clearly too early. Years later, I joined the Ethereum Foundation, responsible for a large amount of business development work at the application layer, when Tomas served as the co-executive director. During that work, one thing became incredibly clear: any large traditional organization wanting to truly use the public chain Ethereum must have privacy protection and modern cryptographic solutions as non-negotiable prerequisites. I had been acquainted with Oscar for many years and called him directly: Oscar, there’s a significant matter concerning the future of the entire ecosystem that is extremely suitable for your background. We must sit down to discuss it in depth.

Oscar: I’ve been deeply involved in the crypto field for about ten years. Early on, I focused on privacy technology when it was still far from a hot topic in the community. I previously worked at Status, and later created a research and development lab. During that time, we led the development of various peer-to-peer communication protocols, focusing on censorship resistance, data availability, and communication privacy among other underlying infrastructures. Therefore, I accumulated a lengthy engineering experience in protocol design, cryptographic privacy, and censorship-resistant network architecture.

In the last five to six years, I have delved into the field of zero-knowledge proofs, developing various development tools and infrastructures, including deep collaborations with early members of the Ethereum Foundation's PSC (Privacy & Scaling Explorations). I have also written a small book on proof systems, researched polynomial commitment schemes, and led the development of tools to reduce the complexity of client proofs. In recent years, I have served as a privacy strategy advisor at the Ethereum Foundation, mainly working on the architecture of the new access layer. As Mo mentioned, we initiated the institutional privacy working group during our time at the Foundation.

Personally, my focus has mainly been on personal sovereignty and user-level privacy, which remains a principle I hold dear. However, in recent years I have clearly observed that the demand for privacy from institutions not only genuinely exists but is often more urgent in many business scenarios than for individual users. This is directly related to the increasingly clear global regulatory framework in recent years. Many leading institutions are very concerned about the business backlash caused by on-chain data exposure. We have been openly building this solution internally at the Foundation over the past year and formally split it into an independent entity about a month ago.

Mo: Let me add one point. When we split to establish ETH Systems, we did not start from scratch but inherited a whole year of solid research, development, and delivery results: including multiple closed-door workshops, operational collaborations with numerous financial entities, already published public products (such as mapping various real financial use cases to the market landscape of Ethereum privacy solutions), and deep technical architecture analyses on private distribution, public chain ledgers compared to private execution tracks. Although the independent brand ETH Systems is very young, it encompasses years of cryptography and financial engineering accumulation.

Strategy and Current Status: Transition from Theoretical Research to Engineering Implementation

David: Oscar just mentioned two very critical points: first is the Foundation's privacy strategy, and second is the essential differences between institutional privacy and personal privacy. Let's start with the privacy strategy. What exactly is a privacy strategy? How do you define it in your implementation?

Oscar: This relates to the research environment of the PSC team within the Ethereum Foundation at the time. We were trying to bring cutting-edge cryptographic work deeper into the Foundation's macro vision, systematically thinking about which privacy research and development directions the Foundation should prioritize. Of course, many teams in the ecosystem are advancing now, and I do not want to represent the Foundation too much.

As the head of the institutional privacy working group at that time, our core mission was to connect two long-sundered worlds: one being traditional large institutions, and the other being the native Ethereum ecosystem. When we communicated with financial institutions in the early stages, they often had a huge information asymmetry regarding Ethereum, generally believing that “this is just a completely transparent public chain with no commercial privacy whatsoever.” But in reality, the Ethereum ecosystem has accumulated an extremely rich set of solutions regarding underlying cryptographic primitives, professional security vendors, and various layered privacy protocols.

What we were doing was systematically dismantling the entire picture of Ethereum's privacy technology stack for institutions; on the other hand, we clearly translated for the crypto teams and protocol engineers within the ecosystem: what these genuine trillion-level commercial users are actually looking for. Therefore, we mapped out a segmented privacy market map, systematically sorting the specific needs of traditional institutions in specific business processes, legal compliance constraints, and trading scenarios, and precisely mapping them to existing technology solutions such as zero-knowledge proofs, secure multiparty computation, or homomorphic encryption, indicating the missing components in the industry through proof of concept and architectural white papers and how to piece these cryptographic blocks together.

Mo: Let me quickly add a note. Oscar just mentioned the PSC, and some listeners might not be familiar with this organization. Ethereum’s ecosystem has been deepening in privacy and scalability technology for many years. While privacy protocols have become capital and technology hotspots again in recent years, the Ethereum Foundation had already established a laboratory focused on cryptographic research internally, which is the PSC. They can be seen as Ethereum's privacy stewards, gathering a group of core builders focused on cryptographic theory and the implementation of privacy protocols for a long time.

David: Based on your observations, does the industry currently have ready-made code solutions that institutions can directly use if they know of their existence, or are there still many underlying gaps in building enterprise-level confidential systems on Ethereum? At what stage are we on this technological evolution curve: do we still need to break through the underlying cryptographic theories, or is the infrastructure basically complete, primarily lacking standard development and module assembly?

Oscar: This is a very profound question. I believe the current reality is a mix of both. Over the past decade, the Ethereum Foundation, Zcash ecosystem, and many independent cryptographic teams have successfully engineered a lot of cutting-edge cryptographic primitives, evolving them from pure theory into highly usable code. Surrounding these underlying breakthroughs, a bunch of technology service providers dedicated to lowering integration barriers has emerged in the market. In many standard scenarios, we indeed already know how the technology path should proceed.

However, there are still significant engineering gaps when facing the complex constraints of specific institutions. Many traditional institutions have extremely stringent and counterintuitive business constraints, and general standardized solutions often cannot be directly adapted. The outside may simplistically assume that “deploying a privacy Layer 2 for institutions can solve everything,” but once you delve into real trading processes, general rollups often come with trade-offs regarding latency, liquidity fragmentation, or compliance permissions that institutions cannot accept.

When we engage with these institutions, we find that the digital maturity between parties varies enormously: leading institutions may have built R&D labs with dozens of people, equipped with top cryptography PhDs, and have tracked zero-knowledge proofs for years; while on the other end, traditional institutions have no Web3 R&D capabilities at all and only hope to procure off-the-shelf white-label compliance infrastructures. Different clients have vastly different requirements regarding performance throughput, deterministic settlement times, and security guarantees, which dictates that we cannot adopt a one-size-fits-all approach.

Mo: From the institutional cases we have been closely following, the current bottleneck is essentially no longer purely a cryptographic theory research issue, but rather an extremely complex system engineering implementation and architecture adaptation problem. The Ethereum ecosystem has already run ahead in terms of research, and the hardest task left is to securely embed these blocks into the modern financial infrastructure.

Real Battlefield: Pain Points of Investment Banks and the Path to Custom Solutions

David: Since the core challenge lies in engineering, can you break down for us one of the most typical real-world cases you have encountered? What are the most common privacy demands of large institutions when integrating Ethereum? Is it the confidentiality of corporate stablecoin account balances, protection against asset penetration during real-world asset (RWA) issuance, or confidential settlements in B2B scenarios? What kind of demands do you most often deal with in practice?

Mo: The institutional use cases we come into contact with are extremely diverse. To be frank, our team typically focuses on those hard-to-crack problems that haven't yet been addressed by the existing market solutions. Use cases like the basic confidential transfers and tokenized deposits you mentioned already have some preliminary solutions in the market and have seen phased resolutions in some compliance-friendly countries and organizations. We are more focused on those systemic pain points that are huge in the traditional finance world but have not been seriously addressed in the public chain space.

To give a representative real-case example: we once had an in-depth discussion with a top-tier global investment bank about the "inter-dealer compression" business. In the traditional derivatives and forex markets, massive bilateral exposures are generated between major banks every day. At the end of daily trading, in order to reduce capital occupation and default risks, all participating banks send their vast trading data to a trusted centralized clearing service provider. For this, these top financial institutions need to pay tens of millions or even hundreds of millions of dollars each year for expensive service fees.

This centralized third party will review each bank’s sensitive trading details and real-time positions and complete the netting and position compression of multiple parties in the background. Although none of the major banks are willing to completely expose their underlying trading cards to a third party, the position compression can significantly reduce the capital adequacy ratio occupation and decrease the number of transactions that require actual clearing, forcing the entire industry to compromise.

Senior executives of this investment bank reached out to us with a request: Is it possible to eliminate this centralized intermediary using cryptographic technology? The decentralized network built by Ethereum, which is immutable and shares a global state, is the ideal foundation to solve this problem. But the core obstacle is: if these sensitive data are directly submitted to the publicly transparent Ethereum mainnet, all the world's competitors would have an unobstructed view of each bank's real positions. This is a typical scenario with hundreds of billions of dollars in potential value that had previously received little attention from native crypto teams.

In the field of private payments and settlement, we have also conducted multiple rounds of architectural proofing with large institutions from several sovereign jurisdictions. As Oscar said, although the concept of private payments sounds standardized, the specific regulations in different countries regarding financial regulation, anti-money laundering penetration, and foreign exchange controls add multidimensional complex constraints to what would originally be a simple cryptographic model.

Oscar: Building an enterprise-level confidential system is by no means as simple as just introducing a zero-knowledge proof. Besides data privacy, institutions are also extremely concerned about the high availability of the systems, deterministic security boundaries, censorship resistance, and compatibility with existing settlement systems. Often our work involves enhancing the rigor of engineering specifications and system delivery across the entire Web3 industry.

These traditional giants have already validated the product-market fit (PMF) in their existing businesses, with their internal systems handling billions of dollars in fund transfers every day. When they consider migrating their business to the Ethereum ecosystem, their primary demand is to obtain 100% system determinism. This is fundamentally different from the experimental development logic based on intuition and rapid iteration early in the industry. Privacy is one of the most technically challenging aspects of this, but it is merely one core attribute within the overall high-availability distributed system. We must provide strictly formally verified technical specifications that comprehensively cover various boundary conditions.

David: Is there a case that has completed the entire process from demand communication, technical validation, to actual implementation? Can you share the complete journey of an institution successfully linking into Ethereum using your privacy solution?

Mo: Under strict confidentiality agreements, I can share a real case involving a national-level financial infrastructure. In many mature economies, the logic of peer-to-peer payments is quite direct, but in some specific jurisdictions, regulatory logic is entirely different. A large financial institution in that country seeks to promote a blockchain-based underlying payment network nationwide. They fully recognize the efficiency of public chains in inter-institutional settlement, but the system must support high-concurrency transactions for a population of millions while meeting the country's unique compliance auditing structure.

In a standard cryptographic privacy payment model, it is usually only necessary to ensure bilateral confidentiality and verification between the sending and receiving parties. However, the financial regulatory regulations in that country explicitly state that each transaction must inherently support the collaborative interaction of four entities at the cryptographic level: the fund sender, the fund receiver, the licensed compliance auditing agency, and the national regulator.

This institution has tried almost all mainstream privacy protocols and scaling networks available in the market over the past two to three years, but none has been able to meet the requirement of controlled disclosure for all four parties while balancing throughput, deterministic delays, and manageable on-chain computing costs. They even drafted a detailed technical evaluation report several dozen pages long arguing why it was impossible to achieve this goal within the existing public chain systems.

The turning point was that our team publicly released a series of research articles and proof of concept codes on multi-party confidential state transitions during our time at the Ethereum Foundation. The technology supervisor of that institution saw these open-source outcomes and proactively reached out to us, stating that the Foundation's breakthrough helped them see the technical feasibility of building a nationwide clearing network based on Ethereum. They are currently advancing their deployment based on our open-source architectural blueprint. This case not only broke the external bias that public chains cannot meet complex sovereign compliance but also prevented that country from regressing to a completely closed and fragmented traditional private chain system.

Oscar: The business and technical verification cycles of this type of institutional collaboration are extremely lengthy, typically requiring prolonged compliance reviews, legal assessments, and security audits. During my time at the Foundation, many deeply collaborative institutions often expressed a willingness to acquire our deeper architectural support through commercial procurement. However, the Foundation, as a neutral non-profit organization, could not accept commercial contracts, resulting in many projects that could have been implemented stalling at the last mile. This is precisely why we chose to split our team into an independent profit-making entity: to connect traditional institutions with mature commercial contract structures while continuing to give back to the public chain ecosystem through open source.

Scalability Paradox: Balancing Deep Customization and Universal Standards

David: Hearing this raises a core concern: If you have to do a lot of highly customized development for every jurisdiction and every unique compliance requirement, how will the entire business achieve network effects and scale? It is often said in the industry that a perfect glove fits only one hand.

Another evolutionary path is: what if we directly integrate native privacy into Ethereum's core infrastructure—such as allowing Uniswap, Aave, basic EOA account systems, and Ledger hardware wallets to inherently possess high-fidelity, out-of-the-box privacy protection capabilities? Would institutions be able to directly adapt to this unified standard? If everyone operates under the same generalized standard, the overall privacy liquidity of the Ethereum ecosystem can experience explosive growth. In balancing deep customization and universal standards, how do you navigate this scalability contradiction?

Mo: This is a very profound industry proposition. First, the implementation of customized solutions and the promotion of underlying general standards are not mutually exclusive; the strength of the Ethereum ecosystem lies precisely in its flexibility for multi-layer coordinated evolution. Secondly, what is usually considered a “specific customized market” in the traditional finance world is often a sizable, independent industry with volumes reaching hundreds of billions of dollars.

We certainly do not advocate for endless pure outsourcing customization, which is not a healthy business model. The core strategy of ETH Systems is: first to root at the frontline and thoroughly understand the most challenging vertical scenarios, because only by completely grasping the business details can we design truly usable cryptographic architectures; thereafter, we immediately abstract highly generalizable underlying cryptographic building blocks and protocol standards from these high-barrier scenarios.

For example, once the aforementioned "inter-dealer compression" protocol runs smoothly in a leading investment bank, its underlying cryptographic state machine can be directly reused globally across all major investment banks; the "multi-party controlled compliance disclosure protocol" developed for sovereign-level payments can also be abstracted into a standard module serving compliant stablecoins globally.

Our long-term path is very clear: all core algorithms and universal interfaces that have been validated in practice will be contributed to the Ethereum community under the most permissive open-source protocols, thereby completely dispelling institutions' concerns about proprietary technology lock-in; at the same time, we will package these audited components into high-performance, plug-and-play modular suites. This approach is akin to the "navigating the cognitive maze" methodology found in Silicon Valley entrepreneurship: in the early stages, the team must personally engage in seemingly unscalable, tedious tasks that can accumulate the highest cognitive barriers.

Faced with traditional financial giants that have been operating steadily for over a hundred years, the public chain ecosystem cannot arrogantly demand that they completely overhaul their systems to adapt to Web3, but must build technological bridges for a smooth transition based on their existing business interfaces and legal frameworks.

Oscar: I completely agree with Mo’s viewpoint. The crypto industry has historically adhered to the idealistic logic of “as long as we build the foundational infrastructure, applications and users will come naturally.” But experience has shown that this logic often fails when dealing with institutions that face strict regulations and complex business operations.

First tackling extremely complex specific scenarios and then refining them into general standards is a path of significant engineering value. We are achieving this goal through the release of open-source codebases, modular protocol blueprints, and highly scalable technical specifications. Of course, we eagerly look forward to the Ethereum base layer (L1) supporting more privacy primitives natively in the future, which would greatly expand the application boundaries of the entire decentralized world. But for now, our primary strategic focus remains clearing all obstacles to smoothly and safely bring trillion-level real institutional assets into the Ethereum ecosystem.

David: In positioning your business model, does ETH Systems lean more towards being a consulting studio providing customized technical delivery for traditional financial institutions, or is it closer to product tech companies like Uniswap Labs or Aave Companies which gain scaled value through building standardized products on-chain?

Mo: Our self-positioning is very clear; we are always a pure product company. I served as Chief Technology Officer in my last job and have been focused on building scalable software products throughout my career; Oscar also has a long background in product architecture and protocol development. We understand that only standardized products can bring about exponential network effects.

However, the road to excellent products exists on a necessary evolutionary spectrum. At the intersection of Ethereum and traditional finance, you cannot sit in an ivory tower and abstract demands. The team must function as frontline deployment engineers, immersing themselves in trading desks and compliance offices on Wall Street, directly observing the interaction details between traders and clearing systems. The ultimate goal of all customization explorations is to distill standard infrastructure products capable of large-scale distribution.

Oscar: The procurement and decision-making cycles of traditional institutions are inherently lengthy. Through early deep technical collaborations, proofs of concept, and joint architectural reviews, we are able to gain unprecedented depths of insight into the rigid demands of the real world, ensuring that we possess high competitive barriers when deciding to place bets on core products. This depth of feedback loop is unattainable for pure external teams.

Endgame Projections and Future Ecology: Redefining the Boundaries of Transparency and Trust

David: Looking at the entire macro cycle, how has traditional institutions' willingness to decentralize accounting on public chains changed? In your daily business interactions, are you more often in the position of promoting Ethereum, or are institutions actively looking for solutions to go on-chain compliantly?

Mo: In fact, the vast majority of the demand is initiated by the institutions. First, global mainstream financial institutions have fully recognized the immense value of decentralized shared ledgers in eliminating reconciliation costs and achieving real-time atomic settlements over the past few years. Secondly, we must objectively credit the entire native DeFi ecosystem: When traditional institutions see the remarkable resilience and capital efficiency demonstrated by decentralized lending and trading protocols like Aave, Uniswap, and MakerDAO in extreme market fluctuations over the years, they are motivated to participate. Their core demand simply lies in how to enter compliantly under current laws and regulations.

Especially as the relevant regulatory frameworks for digital assets in Europe and America gradually become clearer, the internal drivers within traditional institutions have undergone a fundamental shift. In recent years, most institutions had relied on marginal “innovation laboratories” for low-risk proof-of-concept validation; whereas in the past year, we have frequently seen CEOs or business line leaders of large institutions directly instructing their technical teams to stop the mere development of laboratory toys and to begin building real business closed loops on public chains.

David: Does this mean that the future evolution might first experience a transitional phase where compliant institutional sandbox networks protected by cryptography are created on-chain to allow financial institutions to operate their business logic in a controlled environment; as liquidity and infrastructure mature, they then access deeper native DeFi protocols such as Morpho and Uniswap through cross-chain and zero-knowledge bridge technologies?

Oscar: This is precisely the pathway we foresee and are currently promoting for implementation. Many forward-looking large asset management institutions are already deep in planning how to achieve composable integration between tokenized funds and on-chain lending protocols.

However, there exists a "cognitive and legal translation period" of several years in between. Many multinational banks have histories exceeding a century, and their internal risk control manuals and legal compliance systems are entirely written based on traditional central counterparty settlement systems. Accurately mapping these compliance frameworks to the smart contract logic of Ethereum requires collaboration among technical experts, legal advisors, and policymakers. Those capital institutions that exhibit deeper understanding and more decisive actions are currently striving to seize this historic transition period.

David: Let’s turn our attention to the future seven years from now. Assuming by 2033, ETH Systems has achieved all of its initially set strategic goals, and traditional institutions' migration to on-chain becomes a full-blown reality. In your most ambitious vision, what will the future on-chain financial system look like?

Mo: I believe the top technology should be completely "invisible" in its final form. Ordinary users should be able to enjoy the underlying security and free circulatory capabilities it offers without even perceiving the existence of blockchain, cryptographic algorithms, or decentralized ledgers.

Through decentralized identity (DID) and zero-knowledge proof systems, an ordinary investor can compliantly invest in top global assets and receive real-time settlements while fully controlling their sovereign data without submitting sensitive privacy to centralized intermediaries. What we look forward to seeing is not just tens of trillions of traditional assets minted onto Ethereum, but more importantly, allowing global assets to retain the permissionless composability advantages of DeFi while eliminating the data nakedness risks faced by innocent individuals and commercial entities. In the next seven years, the migration of global mainstream financial infrastructure to decentralized public chains like Ethereum will become a certain reality.

David: This raises a very classic and sharp native philosophical divide: the core pillar that the crypto community has long been most proud of is "data is completely public, verifiable across the network, and auditable on-chain." If future asset flows, liquidity pool sizes (TVL), and institutional holdings are all hidden by zero-knowledge cryptography, how does the community ensure that the underlying systems are not secretly over-issuing or generating bad debts? How do we balance privacy protection and public trust?

Mo: Many industry observers easily equate privacy with completely unknowable data hiding. The precise definition of privacy in modern cryptography is: under strictly controlled conditions, clearly defining who can access which specific dimensions of information at what time and through which mathematical proof methods.

In real life, when you make a routine transfer at a bank, only you, the payee, and the bank know the transaction details. This kind of data isolation at the business level is the foundational order that ensures the normal operation of the commercial society. The public demands complete transparency essentially to gain certainty that the system is not acting maliciously. But if modern cryptography allows us to provide verifiable proof of solvency to the entire network without exposing the counterparty and commercial secrets of a single transaction, this is clearly a more advanced and elegant paradigm of trust—namely, selectively verifiable disclosure.

David: This is exactly the ideal state I look forward to. The on-chain auditability we wish to retain encompasses macro-level total transaction volumes, aggregated fund pool sizes, total locked amounts across the network, and the thresholds for triggering orderly settlements.

When institutions deposit large confidential assets into borrowing protocols like Morpho, the system should still be able to output real-time verifiable total asset volumes across the network; when large orders are traded on decentralized trading platforms, the public can confirm that the transactions occur and have been settled while not exposing specific holdings and real-time strategies of particular institutions to front-running arbitrage bots (MEV).

On traditional mainnets, when top whales make large token exchanges, the whole network will almost ruthlessly front-run them within seconds; this is not a proper operational mechanism for a serious modern financial system. Institutions cannot afford to have their entire transaction footprints endlessly monitored. As long as we can mathematically prove the authenticity and compliance of the ledger, we can fully balance transparency and commercial privacy.

Oscar: Absolutely correct; there is no irreconcilable conflict between the two in the dimension of cryptography. By leveraging modern zero-knowledge proofs and homomorphic commitment schemes, we can design an elegant layered system: allowing macro-indicators that concern public safety and system stability to remain globally transparent while granting robust privacy protection at the micro-level for specific account subjects, transaction details, and commercial strategies. Ethereum's Turing-complete programmability provides the best soil for such a system that accommodates optimal characteristics of both ends.

David: How should developers and core protocols within the ecosystem collaborate to accelerate this process? Whether it’s native DeFi blue chips like Morpho or Uniswap or researchers from the Ethereum Foundation, how can they better remove obstacles for institutional-level privacy?

Mo: For the broader DeFi ecosystem protocols, our call is very direct: if you are building innovative borrowing, trading, or asset management infrastructure, we welcome your contact with ETH Systems at any time. We are eager to explore with native teams how to adapt battle-tested DeFi protocols to institutional-level compliant privacy use cases.

At the same time, our team systematically opens our latest technical specifications and codebases every three to four weeks. Many executives and architects from international financial institutions are closely following these technical outputs. If the native community builds innovative privacy or scalability tools, we welcome direct submissions to our open-source repository for collaborative evolution.

Oscar: Participants in the Ethereum ecosystem need to adopt a more open mindset when considering our potential user base. We hope to encourage developers not only to focus on the experience of native retail users but also to think deeply about what technical interfaces large entities constrained by compliance need. Breaking down the cognitive barriers between the Ethereum ecosystem and traditional institutions is a long-term coordinated system engineering effort that requires the entire ecosystem.

Mo: Ultimately, our core mission can be summarized in one sentence: to be the translator and bridge between top boards and cyberpunk. These two groups have often misunderstood and even opposed each other in the past, but we firmly believe that only by embedding the truly protective decentralized technology of individual rights and commercial freedom into the underlying system standards of the highest decision-making level can we truly reshape the future of global financial infrastructure.

David: This reminds me of an insight shared by Ethereum core researcher Danny Ryan. As a staunch believer in decentralization, when he sits with architects from top Wall Street banks, although they use completely different specialized vocabularies, their underlying demands are highly aligned: cyberpunks call for decentralization and censorship resistance, while traditional bank executives discuss how to eliminate counterparty default risks. This is akin to the horseshoe theory; the ultimate demands at both ends are structurally isomorphic at a deeper level.

Oscar: That is absolutely the case. Whether for individuals or institutions, everyone fundamentally cares about the same core attributes: security, censorship resistance, rule transparency, and privacy sovereignty.

The most enchanting feature of Ethereum is its enormous inclusivity: it supports completely decentralized, identity-agnostic native crypto experiments while also constructing the next-generation financial systems for trillion-level entities under strict legal and commercial constraints that incorporate both privacy and compliance. Understanding this deeply allows us to realize that these two aspects have never been disparate.

David: Mo, Oscar, you are advancing a pioneering work that is crucial for the entire Web3 industry. Thank you for your profound insights shared here on Bankless, and I wish ETH Systems every success in your journey to drive institutions onto the blockchain.

Oscar: Thank you very much for the invitation, David.

Mo: Thank you, David, it’s a pleasure to be here.