Bankless
Ethereum Privacy for Institutions | Mo Jalil and Oskar Thoren
- ETH Systems, a new for-profit spinout from the Ethereum Foundation, focuses on bringing institutions onchain through privacy solutions tailored to their specific regulatory and business constraints.
- Institutional privacy differs fundamentally from individual privacy; banks and asset managers need confidentiality around positions, trades, and business operations to comply with existing legal frameworks and competitive concerns.
- The team is pursuing both bespoke solutions for high-value institutional use cases (e.g., inter-dealer compressions, multi-party payment schemes) and open-source generalized building blocks that can scale across industries.
- Privacy on Ethereum is largely an engineering problem rather than a research problem; the cryptographic tools exist but require careful integration with institutional workflows and compliance requirements.
- A parallel institutional ecosystem will likely develop on Ethereum before deep integration with core DeFi (Uniswap, Aave, Morpho); institutions will learn the system, build confidence, then seek interoperability with mainstream protocols.
- The path forward requires bridging cypherpunk values (decentralization, privacy, open-source security) with institutional needs (compliance, counterparty reduction, capital efficiency)—showing these goals often align.