DeFi Privacy Protocols: How Suterusu Stands Out

If you think crypto transactions are anonymous and blockchain networks protect your privacy, then you definitely have the wrong idea. As it turns out, crypto transactions on various blockchain networks are not anonymous but pseudonymous. Lets look at Bitcoin for instance.

Bitcoin was the first cryptocurrency to hit the market and by far the largest by value. People use Bitcoin to send and receive money, to make payments, and to buy goods online. Recently, leading automaker Tesla has started accepting Bitcoin as a mode of payment. With such diverse use-cases, youd naturally expect Bitcoin transactions to be anonymous.

But, they‘re not. All the transactions ever made using Bitcoin are recorded and stored on a public ledger. If anyone gets hold of your private blockchain address, they can see all the transactions you’ve made and how much account balance you have. This is akin to someone being able to monitor all your bank transactions with your account number.

As DeFi picks up steam, this problem of privacy could be a roadblock for the mainstream adoption of cryptocurrencies. So, whats the solution？ To circumvent this problem, a variety of privacy protocols have surfaced in recent years. But, they too come with certain shortcomings of their own.

The Problem With Present Day Privacy Protocols

To protect users privacy and shield transactions on blockchain networks, developers came up with a variety of privacy protocols. Some noted ones being ZCash and Tornado Cash. Both of these protocols use an underlying technology called zk-SNARKS (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge). This is a technology using which one can prove the possession of certain information without actually revealing the information.

What these protocols basically do is, using zk-SNARKS, they create Zero-Knowledge Proofs (ZKPs) to verify transactions on the network without actually revealing the information within these transactions. This ensures anonymity and makes sure that the transaction is not traced back to the original user.

But, this method comes with plenty of problems. Blockchain networks are still quite skeptical about adopting these protocols. This is because verifying ZKPs requires high computational power and can reduce the throughput of the entire network. In addition to this, zk-SNARKS requires a trusted set-up to keep data private. Not only is this process highly inconvenient but, it contradicts the concept of decentralization.

Even after all this effort, these protocols provide only partial anonymity. Only the identity of the user is hidden and not the transactional amount.

Apart from this, other core technologies like ring signatures and Mimblewimble used by Monero and BEAM are either not scalable or do not support smart contracts.

How Suterusu Solves These Problems

Suterusu is a layer-2 privacy protocol that claims to have the answer to all these problems and bring true privacy into the world of DeFi. So, how does it achieve this？

Suterusu aims to convert various tokens issued on blockchain networks into anonymous tokens that cannot be detected. It ditches the old zk-SNARKS technology for the new and updated zk-ConSNARKS technology.

Just like zk-SNARKS, zk-ConSNARKS also generated ZKPs. But, the difference is that here the ZKPs generated are small and constant sized. This reduces the computational load on the network and maintains efficiency. This also bypasses the problem of creating a trusted setup for transaction privacy. zk-ConSNARKS encrypts data in such a way that both the identity and transactional amount are protected from view.

To add to the levels of privacy, Suterusu has also developed a few privacy-focused products like Suter Virtual Machine (SuterVM) and Suter Shield.

（1）SuterVM

SuterVM is like a lifeline for the entire Suter network. All the advanced functionalities of the network including smart contract support, require SuterVM. It is also the very tool that allows Suterusu to be deployed on other blockchain networks.

（2）Suter Shield

Suter Shield is a cutting-edge product developed by Suterusu. It is a private payments app that allows users to transfer crypto assets anonymously. It accepts deposits from any ERC-20 tokens and allows the owner to withdraw from a different address. The underlying protocol ensures that these two addresses are unlinkable, ensuring full privacy.

（3）Smart Contracts on Suterusu

Suterusu makes use of three smart contracts called Fund, Transfer, and Burn to maintain its operations. These smart contracts are responsible for creating, transferring, and burning anonymous tokens. In this way, Suterusu solves the problem of privacy, scalability, and efficiency.

The Scope For Suterusu

With zk-ConSNARKS technology and SuterVM, the possibilities for Suterusu are limitless. Developers can use this core technology to build privacy-first dApps and digital assets. Crypto exchanges and trading platforms adopting this technology could provide full transactional privacy to their users. But, that‘s just the beginning. The applications of Suterusu could extend way beyond DeFi. This technology could be extended to build anonymous web browsers, large-scale firms could use this technology to protect their users’ private information, and day-to-day payment platforms could also shield transactions from view.

However, theres also a downside. Even though Suterusu is quite promising for the world of DeFi, it has a drawback. It could provide a means for fraudsters, smugglers, and other malicious actors to conduct fully private transactions without being detected. But users and their wallet addresses can surely be marked depending on malicious activities and prevent them from transacting on the platform.

Final Thoughts

When we look past this single drawback, the future for Suterusu is bright. As DeFi gains mainstream adoption, Suterusu could be the go-to privacy protocol for blockchains in the near future.