Ethereum co-founder Vitalik Buterin on Wednesday outlined near-term steps the network is taking to bring privacy onchain, a feature institutions highlighted at Consensus Hong Kong as necessary for widespread institutional adoption of the blockchain technology.
Buterin’s X post was technically dense but pointed to a simple fact: the world’s largest smart contract blockchain is moving to make private transactions a feature of the network, not a workaround provided by third-party tools.
The post comes as the Ethereum Foundation, the non-profit organization that supports the blockchain’s network and ecosystem, faces a wave of high-profile departures amid an internal transition tied to a new organizational mandate to redefine its role within Ethereum.
The three new short-term initiatives are: Account abstraction (AA) and FOCIL, Keyed nonces and access layer work. Each of the three adds a different layer of privacy to Ethereum.
Here is what each one actually does:
Uncensorable private transactions
As of now, if a user sends a private transaction on Ethereum via crypto mixers such as Tornado Cash, it first goes into the public memory pool (mempool), a sort of waiting area visible to everyone on the network. Imagine dropping a letter into a post office where every worker can read the address before finalizing which one to move for delivery.
Similarly, Ethereum entities that decide which transactions make it into each block can see those transactions and exclude them, which amounts to censorship.
FOCIL, or fork-choice enforced inclusion lists, makes censorship harder by allowing a committee of validators to propose a list of transactions that block builders are expected to include. Ignoring these transactions can lead to the block being rejected by the network. This way, it becomes difficult to censor transactions.
Meanwhile, account abstraction upgrades how Ethereum accounts work. Today, most Ethereum users rely on externally owned accounts (EOAs) via apps like a basic MetaMask, Trust Wallet, or Coinbase Wallet, each controlled by a single private key. If a user loses that key, they lose access to their funds.
Account abstraction enables all accounts to behave like programmable smart contracts, providing features such as multi-signature approvals and social recovery. It also lets apps or friends pay a user’s transaction fees.
Keyed ‘nonces’
Every Ethereum account has a nonce, a number used once. It acts as a running tally of all proposed transactions, increasing by 1 with each new transaction sent. This setup helps prevent the same transaction from being repeated on the network.
It’s like getting a sequentially numbered ticket at a food counter. But it comes with a problem. Even if an order is private, anyone watching can see that ticket #5 and ticket #6 came from the same person. On Ethereum, this sequential nonce allows observers to link transactions to the same account, even if the transactions are private and their contents are hidden.
The fix for that is Vitalik Buterin outlines Ethereum’s privacy measures. Here is what it
