L2BEAT has launched a new evaluation section for privacy protocols based on five adversary profiles: the passive chain observer, the transaction counterparty, the infrastructure operator, the protocol team, and the state adversary. No existing protocol protects against all five adversaries, with each solution making different trade-offs between on-chain resistance and network surveillance. Zcash shielded pool, Privacy Pools, and Railgun each assume distinct compromises and can no longer be compared using a single metric such as TVL. L2BEAT’s approach, already applied to Ethereum rollups through its Stages system, aims to compel each team to publicly document the exact limits of their privacy guarantees. On the regulatory front, the European anti-money laundering regulation will ban privacy cryptocurrencies from July 2027, while in the United States, OFAC removed Tornado Cash from its blacklist in spring 2025, although legal risks for developers persist.
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