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The Problem And The Solution

Privacy is a notoriously hard problem to solve on public blockchains. Over the years there have been many attempts at solving this significant issue, largely through privacy coins and mixers. Mirage takes a fundamentally different approach to address this issue on Ethereum, though Mirage can adapt the design for other networks such as L2s like Arbitrum and Base, or L1s like Solana.

The Privacy Problem

Free market economies rely on privacy rights to function. Internet capital markets are powerful today, but their current significance is nothing compared to what they could be with privacy enabled. Many businesses and individuals still rely on centralized, permissioned, and outdated setups that are inefficient and expensive, but offer basic privacy guarantees that public blockchains can't. Banks and centralized exchanges are where even crypto companies process private transactions like payroll and treasury management, despite higher costs and worse user experience.

On Privacy Coins

Privacy coins such as ZCash ($ZEC) and Monero ($XMR) offer transactional privacy through their own volatile assets. While crypto circles generally accept their privacy guarantees, they have failed to capture the larger crypto market for several reasons:

  • Different networks and trust assumptions make interoperability harder and add another loop users must navigate. This challenges the UX and turns off users who don't trust the isolated blockchains behind these coins. Users typically purchase these coins from sketchy websites with opaque processes, or from centralized exchanges.
  • Volatile prices bring instability for real world payments and are less reliable than stablecoins.
  • No built-in forced exclusion and compliance is a good trait for a blockchain network, but combined with a privacy protocol, these networks become ideal spaces for money laundering by criminals and sanctioned entities. This taints everyone who interacts with the network. Even CEXs that don't require KYC specifically restrict purchases of these tokens to KYCed users.
  • The UX is difficult to navigate for non-technical and non-crypto-native users.

These concerns make privacy coins unattractive to users who simply want easier payments and financial sovereignty. It's unrealistic to expect a remote business owner to buy these coins and take on these challenges for payroll or daily transactions, even if they're already familiar with blockchains and comfortable on Ethereum. Privacy coins don't serve normal people who prefer regulated exchanges or banks over jumping through hoops.

On Mixers

Mixers such as Tornado Cash offer unlinkability, which is an upgrade over the transparent nature of public blockchains. However, the user experience and risks far outweigh the benefits for most users, who can simply use CEXs to achieve better privacy guarantees.

  • The sanctioning of Tornado Cash set a bad precedent for mixers and introduced legitimate compliance concerns for innocent users worried about having their funds tainted because they benefit from and help maintain an anonymity set that includes bad actors.
  • Funds typically wait for days in smart contracts, and there must be enough users who have deposited the same asset in amounts equal to or higher than what the user deposited, depending on the implementation. This makes scaling difficult and introduces serious UX issues.
  • Interacting with mixers typically means high gas costs as there are large data structures being manipulated and altered (depending on implementation).
  • As soon as you interact with a mixer, your funds are tagged and scrutinized by CEXs, on/off-ramp solutions, and other protocols.

For these reasons, although mixers remain the best current privacy solution on Ethereum, they haven't generated enough trust or proper UX to achieve adoption by everyday users and businesses.

The Solution

We're building Mirage on the belief that privacy should be easy to use, fast, cheap, and headache-free. Your money shouldn't mix with others. You shouldn't have to wait more than a minute or two. And no one should know you used a privacy solution to begin with. The next generation being onboarded to stablecoins will turn their backs when they discover the lack of privacy, or won't onboard at all, or will just use a centralized solution with worse UX. Here are features Mirage brings that no other privacy solution does:

Speed, Affordability, and Flexibility

Mirage is cheap and fast. On Ethereum mainnet, transactions are processed in less than 90 seconds. On L2s such as Base and Arbitrum, this drops to under 6 seconds. Compare that to parking your funds in a mixer contract for days while spending both time and gas.

Moreover, Mirage is not a blockchain, making upgrades easier. New features are simpler to add, and the network can be adjusted to suit different needs as they appear. We don't believe in one size fits all. Privacy can be tailored for each user.

Self-Sovereignty and Compliance

Instead of using obvious mixer contracts, Mirage creates different unique smart contracts for each transaction. To outside observers, these look like normal, unverified contracts that appear on Ethereum every day. There's no obvious "privacy contract" to monitor, like Tornado Cash's pools. And if you're concerned about interacting with unverified contracts, both Mirage's escrow contract and the tool used to make these different versions (Azoth) are completely open source and auditable. Since Azoth's outputs are deterministic, you can perform an integrity check to ensure the contract you're interacting with hasn't been tampered with. This is exactly what the executors do to verify the contract is healthy before committing the bond.

The Undetectability Challenge

Traditional privacy tools fail because you interact directly with obvious privacy contracts on the blockchain, essentially announcing to everyone that you want privacy. Mirage solves this by moving all coordination off-chain. When you want to make a private transaction, your wallet broadcasts an encrypted message (called a 'signal') to a network of independent executors. Each signal is locked behind a cryptographic puzzle that must be solved before its contents can be read. Your actual intentions are only revealed to the node that picks up your transaction. Importantly, while we coordinate off-chain, everything is validated and verified immediately and trustlessly onchain, without a trusted party.

This means your funds are never revealed to be handled by a privacy protocol, which itself would bring unwanted attention. Since Mirage transactions are designed to be indistinguishable from normal Ethereum activity, no external observer can definitively prove someone used a privacy protocol. When you use Mirage, your on-chain footprint consists entirely of routine-looking interactions: depositing tokens into what appears to be an ordinary contract, and someone else later making a standard transfer to your intended recipient. These actions could have countless legitimate explanations: business escrow agreements, freelance payments, automated trading strategies, or any number of everyday DeFi activities.

Integrations & UX

To use Mirage, you only need to submit at most two transactions, a user experience unparalleled in the privacy market. Similarly, integrating Mirage into your protocol and wallets is an easy, high-reward task for development teams. It's essentially a simple API call that leaks no information. All data is encrypted locally on users' devices.

Who Uses Mirage

Mirage serves users and institutions that need financial privacy without the stigma or regulatory exposure of traditional privacy tools. Businesses can use it to protect sensitive financial information from competitors who monitor blockchain activity for strategic intelligence, including payroll. Individual users can rely on Mirage to keep their personal finances private from data brokers, surveillance companies, and malicious actors who build profiles from public transaction data. DAOs can use the protocol to make confidential payments without telegraphing their strategies to the market, while developers integrate Mirage into applications that require built-in privacy without asking users to take on regulatory risk.

The protocol serves anyone who believes financial privacy shouldn't come with a target on your back. Mirage recognizes that true privacy means no one should even know you're trying to be private. This makes it practical for legitimate users who simply want the same level of financial confidentiality they expect from traditional banking, without the legal and social risks of using obviously detectable privacy protocols.