In brief
- Privacy-focused platform Incognito will soon roll out support for major Ethereum DeFi platforms.
- The sidechain allows users to anonymize their transactions.
- Kyber Network, 0x, Uniswap and Compound will be the first supported platforms.
Incognito, a privacy-focused blockchain platform that allows users to anonymize—or “shield”—their Ethereum transactions, will soon expand its functionality to decentralized finance (DeFi) platforms, starting with Kyber Network’s mainnet in May.
After launching on Kyber, the platform also plans to gradually roll out support for DeFi platforms including 0x, Uniswap and Compound, Incognito’s ecosystem lead and researcher Andrey Bugaevski told Decrypt.
How does Incognito shield Ethereum transactions?
Currently, Incognito allows users to anonymize their ether by creating a shielded “copy” of it on the sidechain using zero-knowledge proofs and locking the corresponding amount of the “original” tokens on Ethereum. After that, all transactions that involve shielded ether—so-called pETH—will be executed on Incognito and become fully anonymous.
Simultaneously, pETH always have the same value and can be used just as normal ether. Users can send shielded tokens to other Incognito wallet addresses or to “normal” Ethereum balances—in this case, pETH will be unshielded before arriving on regular ETH wallets.
To achieve this, when tokens become deanonymized, a specified amount of pETH is burned on Incognito while an equal amount of ETH unlocks on Ethereum. The sidechain will hide all internal transactions and only deposits and withdrawals to and from Incognito’s smart contract will be publicly visible.
A similar method will be used for DeFi transactions, except it will include an extra “anonymity buffer”—Incognito’s smart contract that will act as a medium and transact with the aforementioned platforms. The resulting shielded tokens will be dubbed pKyber, p0x, pCompound and pUniswap, respectively.
The platform plans to roll out support for Kyber mainnet and 0x on May 7 and 17, respectively, with Uniswap and Compound scheduled for June.
According to Bugaevski, being a sidechain, Incognito doesn’t place additional load on the Ethereum blockchain, requiring close to zero transaction fees at the same time. The platform also offers cross-chain functionality.
As Decrypt reported previously, Zilliqa and Binance took their initial steps towards complete anonymity in January as the firms entered into partnerships with Incognito. The platform was also awarded the Binance X fellowship—a program developed to support researchers in creating open-source software for the crypto ecosystem.