You Know Zcash, But Railgun Lets You Use Any Asset Privately Across All Ethereum DeFi

Railgun is a Zcash-inspired system of smart contracts that lets users shield assets on Ethereum and make private transfers or use DeFi without exposing ordinary sender-to-recipient movements. Users derive a private address from a seed and transfer funds into it; that initial deposit remains visible on Etherscan, although its destination is open to interpretation. Afterward, internal transfers appear as Ethereum state updates rather than publicly traceable transfers between named addresses.

Unlike Zcash, which Alan said primarily supports ZEC today, Railgun is designed to support a range of assets, including ETH, USDT, DAI, USDC, and NFTs. From a private address, users can make payments, consolidate funds, receive payments through a 0ZK address, and access activities such as swaps, lending, staking, and vaults. The practical reach of those DeFi options depends on wallet integrations, rather than on a single seamless connection to every protocol.

Alan named Railway, Anon, Terminal, and Rail Oxide as wallets offering Railgun integrations, and described Anon as having the broadest selection. Its options include Morpho, swaps through multiple providers, stablecoin minting, farming, and Beefy. Railgun Connect is a research project intended to connect private balances to arbitrary DeFi mechanisms, but Alan said it is not ready for use and that making those connections seamless is technically difficult.

Railgun’s privacy is not uniform across assets: it depends partly on how many users have shielded the same token. An obscure token may have a weak privacy set, and visible pool balances can help observers estimate how many comparable deposits are present. Alan cautioned that a large deposit into a pool with little of that token may be easier to attribute. He contrasted this with fixed-denomination mixers, which he said work poorly for varied tokens and unusual balances. The host cited about $117 million deposited, according to DeFiLlama, while Alan put Railgun’s Ethereum TVL at about $120 million at the time of the discussion.

Alan argued that privacy should be added at the wallet level rather than by making DeFi applications opaque. Users should remain able to inspect matters such as loan-to-value ratios, vault payouts, decentralization, and liquidity. But if verification requires specialized cryptography or advanced mathematics, users may have to rely on experts instead of checking systems themselves. He also framed privacy as a stack of protections chosen for different needs, not a simple choice between always-on privacy and opting in: a user could maintain a public persona while keeping a balance private.

Railgun also operates on Base, Arbitrum, Polygon, and BSC. Alan said its state-machine design differs from an L2, including in its censorship-resistance and immutability properties. The project is decentralized, with contributors including Chainway, which wrote its private proof-of-innocence mechanism, and ZK Knox, which built hardware-support features. The Ethereum Foundation’s Kohaku SDK includes Railgun in its Privacy SDK, and projects using Kohaku are beginning to integrate Railgun contracts. Alan sees that work as complementary, with the Foundation building around Ethereum primitives rather than trying to build dapps, and said he expects Ambire to release a Railgun-integrated wallet soon.

Privacy also extends beyond asset shielding. Alan said a public mempool can expose users to front-running and other transaction-ordering attacks; encrypting the mempool without private RPCs still leaves users exposed to RPC-level monitoring. He predicted that privacy against the mempool will become standard, and said better research and tooling should make RPC privacy easier as latency falls. He added that institutions want and need this protection. More than 70% of Rail supply is held in staking contracts, according to Alan; stakers participate in security reviews and vote on proposals, including whether to deploy on Base. Treasury transaction fees fund rewards distributed every two weeks, and Alan expects active staker rewards to exceed $2 million for the year.