Aztec Labs relaunched zk.money, a privacy-focused wallet designed to conceal payment amounts and recipient identities on the Ethereum network. Three years after its initial launch, it offers users a tool to obscure transaction histories.
The wallet functions by moving payments onto the Aztec Network, a Layer 2 solution connected to Ethereum. This architecture allows zk.money to hide balances, transfer amounts and participants involved in transactions, in contrast to Ethereum's inherently public ledger.
On-chain data on Ethereum exposes individual wallet balances and traces past transfers. This transparency can reveal sensitive information, such as a business's payments to suppliers or an individual's spending habits.
Users can deposit dollar-pegged stablecoins DAI, USDC and USDT into zk.money. Upon deposit, USDC and USDT are automatically converted into DAI, making DAI the sole currency used for private transactions within the wallet.
Joe Andrews, CEO of Aztec Labs, said, "Onchain transactions between two individuals shouldn’t mean publishing your financial history to the world." Andrews added that Aztec Labs selected DAI because it is "the most decentralized of the mass-market stablecoins used today on Ethereum," with potential for future asset support.
The wallet operates on a self-custodial model, ensuring that Aztec Labs as the operator cannot spend or freeze user funds. This design provides users direct control over their assets.
Users can initiate payments by sharing a link or sending funds to a readable name like bob.zk.money, eliminating the need to copy complex, lengthy wallet addresses. This simplifies the user experience for private transfers.
Initial limitations apply to the relaunched system. Each deposit, payment and withdrawal must remain below $2,500. Additionally, all users collectively share a $50,000 daily deposit allowance, which replenishes over time.
Andrews explained these caps serve as a safeguard while the system uses "experimental cryptography." Aztec Labs plans to increase these limits as user confidence grows and following the deployment of a later version, which will require a new contract.
Transaction costs include 35 cents plus standard Ethereum network fees for a deposit, and a 20-cent fee for a withdrawal. Users also receive 100 sponsored transactions daily for internal movements within zk.money.
Crucially, while transactions within zk.money remain private, the initial deposit from Ethereum still leaves a public trace. This reveals the sender and the amount transferred, though the recipient on the Aztec Network remains anonymous.
Ethereum's broader ecosystem already features several privacy-enhancing applications. Developers are considering changes for the planned 2027 Hegotá upgrade, which includes 66 proposals aimed at allowing privacy apps to manage transaction approvals and fees with less reliance on external services.
