“Confidential” Crypto Transactions: Solana (SOL) Version 1.16 and Its Many Surprises

Anonymous transactions are becoming a crucial element in the future of the crypto sphere. Considering recent improvements in Solana, this once-regulatory-despised convenience will soon be integrated. Version 1.16 of the protocol will also include other enticing features. Details!

Solana on the Rise with Version 1.16

Solana is experiencing a resurgence. The issuer of the SOL cryptocurrency recently witnessed a 4.15% increase in its total value locked (TVL) from Sunday to Monday. DefiLlama, a data provider, reported a figure close to $340 million just yesterday.

Solana's new 1.16 update includes:

– confidential transfers
– better zk support
– reduced hardware requirements

these are big improvements — I don't think enough people are aware

(we need to get much better at communicating)

we wrote an overview:
https://t.co/IxXdyGvluL

— rpc mert | helius.dev (@0xMert_) October 5, 2023

Helius Labs’ article attached to this tweet complements Solana’s official communication dated September 26. In fact, a day before that, Solana Labs engineers confirmed to validators the imminent deployment of Solana v1.16. Its beta version will soon be integrated into the mainnet.

Before this announcement, the Solana team had to conduct numerous audits and address prior issues. It took about 10 months to reach this stage. Furthermore, the developers behind this v1.16 project acknowledge that it has not yet reached its zenith. They have promised the addition of more features over time.

What are the updated features and performance improvements in this new iteration of Solana? Among other things, you’ll find:

• Improved support for execution for zero-knowledge math
• Support for confidential SPL Token transfers
• Support for 128 operations on elliptic curves (equivalents of EIP-196, EIP-197, and EIP-198)
• Support for resizable program data accounts
• Ledger data cleaning service optimization
• Peer-sampling improvements for Gossip request extraction
• Default migration of account indexes to disk

Privacy over Anonymity for Crypto Traders

Here’s how Helius Labs, a Solana infrastructure provider, described this feature:

“Confidential transfers, a feature introduced by Token2022, use zero-knowledge proofs to encrypt SPL token balances and transaction amounts. The primary goal of this feature is to enhance user privacy with an emphasis on confidentiality rather than anonymity.”

In its development, Helius also highlighted that mathematical operations on encrypted amounts for these so-called “confidential” crypto transactions are based on Twisted EIGamal encryption. In validating these, Sigma protocols will be of great utility. These protocols fall under the category of ZK proofs where the prover can demonstrate to the verifier that they know secret information without revealing it.

To top it off, developers propose the addition of Command Line Interface (CLI) support.

It’s worth noting that the question of privacy and anonymity is Monero’s (XMR) domain. However, financial market regulators and central banks do not approve of this idea. Recently, the BIS has established “Atlas,” a platform that will strictly monitor cryptocurrency transactions.