Zero-Knowledge Proofs: The Privacy Layer for DeFi and RWAs
As blockchain adoption grows, one tension continues to dominate the conversation: transparency versus privacy. Public blockchains like Ethereum are transparent by design, allowing anyone to audit transactions. But this transparency can also expose sensitive financial data, especially as decentralized finance (DeFi) and tokenized real-world assets (RWAs) expand. Enter zero-knowledge proofs (ZKPs) a breakthrough cryptographic technology that could preserve privacy while maintaining trust. ZKPs are now being integrated into DeFi protocols and RWA platforms, offering a way to balance regulatory compliance with user confidentiality. What Are Zero-Knowledge Proofs? A zero-knowledge proof is a cryptographic method that allows one party (the prover) to demonstrate to another party (the verifier) that a statement is true without revealing any underlying data. For example: You could prove you’re over 18 without revealing your exact birthdate. A DeFi protocol could prove it holds sufficient collateral without exposing […]
