The developers of the cryptocurrency Firo, formerly known as Zcoin, have launched the Lelantus protocol on the project's main network, which provides "default" transaction confidentiality.
The protocol invites users to anonymize their crypto-assets to ensure the privacy of transactions sent through Firo wallets. Transparent transactions have moved to opt-in options. The update gives users the option to use Firo's partial redemption and burn model.
Lelantus was launched on Firo's test network last October. At the time, project manager Reuben Yap compared Firo's redemption and burn model to buying a ticket for a ride - walking up to the turnstile, just showing the ticket. Yap explained:
"The ticket acts like a receipt for payment, but it doesn't reveal information about who paid for it or how. The same principle applies to the Zcoin burning and redemption model. If the receipt can be verified, I can redeem it and get new coins."
After the launch of the Lelantus protocol on the main network, it became possible to use this "ticket" in installments rather than at once. A Firo executive said:
"With previous burn and redemption systems like Zerocoin and Sigma, if I burned $100 worth of assets, I had to redeem them in full. The main innovation of Lelantus is that I can burn those assets in full and redeem any lesser amount without disclosing that it came from $100."
This mechanism prevents third parties from tracing the source of the transaction by the number of coins burned. The next step for Lelantus is to allow users to "transfer the right to redeem to someone else without disclosing the source or amount." The developers plan to roll out this update in 2021.
"As a result of the activation of the update on the main network, we are seeing an increase in the number of transactions using Lelantus, which is very encouraging. Mass adoption of cryptocurrencies cannot happen without meaningful privacy protection, especially since no one wants to make their financial history available to the public. Protocols like Lelantus open up new possibilities for understanding how cryptocurrencies approach transaction privacy, making these protection mechanisms even more accessible and their adoption more achievable," Yap said.
Other cryptocurrency developers are also working to improve transaction privacy. In the fall, Litecoin founder Charlie Lee announced plans to incorporate enhanced transaction privacy into the blockchain. In addition, in October, Taproot and Schnorr signatures were introduced into the Bitcoin Core code, updates to improve the privacy and scalability of the Bitcoin network.