Blockchains are poised to achieve mainstream adoption, but are missing one key feature: confidentiality. This issue could be solved by the development of a token standard with confidentiality at its core.

Leading encryption and onchain infrastructure projects Inco, OpenZeppelin, and Zama have formed the Confidential Token Association to develop the Confidential Token Standard: a framework for empowering token standards such as ERC20 with confidentiality. Leveraging cutting-edge encryption techniques, the confidential token standard allows users to conceal the amounts transferred between addresses, while uniquely preserving the transparency of fund flows onchain.

The association is open to welcoming more members to accelerate the creation of the Confidential Token Standard. If you are interested in joining and contributing, get in touch. 

The Confidential Token Standard will push forward adoption and development in a number of areas. 

Payments and transfers represent a huge adoption opportunity for crypto, but without confidentiality, simple use cases such as sending money to a friend, remittance, or executing payroll onchain will not reach the mainstream.

DeFi is a paradigm-shift for finance, but with every transaction visible onchain, DeFi users require a way to keep transaction details confidential for basic privacy reasons as well as to protect against MEV. Builders need a way to supercharge their apps with confidentiality without sacrificing composability.

Financial institutions are ready to bring their assets onchain, but are limited by confidentiality concerns. The confidential token standard can be deployed to provide programmable privacy, compliance, and transfer rules to RWA tokens, enabling assets to be brought onchain safely.

The association is made up of three founding members with a wealth of experience in developing confidential blockchain technology: Zama, Inco, and OpenZeppelin. ‍

Inco leverages advanced forms of encryption to bring confidentiality to blockchains, providing a universal confidentiality layer to the onchain ecosystem. In collaboration with Circle Research, Inco explored a framework for confidential ERC20 tokens in a recent report.

OpenZeppelin is the world leader in securing blockchain applications and smart contracts. Its bedrock open source Contract Libraries are a public good and industry standard for smart contract development.

Zama is an open source cryptography company building state-of-the-art Fully Homomorphic Encryption (FHE) solutions for blockchain and AI. The company recently put together a proof of concept for a privacy-preserving solution focused on the financial sector with J.P. Morgan’s Kinexys.

If you have any questions about the Confidential Token Standard or would like to become a member of the Confidential Token Association, please get in touch.