CoinDesk
Ethereum developers are reviving a years-old conversation about on-chain privacy with pERC-20, a proposed token standard that would let users hold and transfer tokens without exposing balances, transaction amounts or counterparties. Under the design, tokens exist as encrypted cryptographic "notes" rather than publicly readable ledger entries, while the total supply stays visible so anyone can verify no new units are being minted. Issuers also retain a compliance hook — a cryptographic blacklist to freeze specific notes without exposing ordinary users' activity.
Why it matters
Privacy on public chains has lived in a narrow corner since regulators moved against mixers like Tornado Cash and developer attention pivoted to scaling. The new framing is different: rather than framing privacy and compliance as opposites, pERC-20 bakes both into the same standard. StarkWare co-founder Eli Ben-Sasson told CoinDesk the real bottleneck for privacy tech is no longer cryptography but UX — bad wallet flows and small anonymity sets have historically made private tools unusable. His view is that "if the UX is bad, very few users are going to be using it, and only for a very small number of things, they don't really get a lot of anonymity."
Market impact
Starknet answered its own UX critique this week by going live with STRK20, a privacy framework that extends confidentiality beyond simple transfers into lending, staking and token swaps under a single layer. STRK20 also uses post-quantum secure cryptography, a bet that future-proofing matters before quantum threats materialise. Whether pERC-20 becomes an Ethereum standard still depends on the full EIP review process, but the parallel launches signal that privacy is shifting from niche infrastructure back into mainstream protocol design.
Frequently asked questions
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What is pERC-20 and how does it differ from a standard ERC-20 token?
pERC-20 is a proposed Ethereum token standard that keeps balances, transaction amounts and counterparties private by representing tokens as encrypted cryptographic notes. Unlike today's default ERC-20, where any wallet's holdings and history are publicly visible, pERC-20 preserves confidentiality while still allowing…
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Does pERC-20 break supply transparency or regulator visibility?
No. The total supply of a pERC-20 token remains publicly visible so anyone can confirm no new units are being secretly minted. The proposal also includes a compliance mechanism — a cryptographic blacklist that lets issuers freeze specific notes without exposing ordinary users' balances or histories.
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What is Starknet's STRK20 and how does it extend beyond pERC-20?
STRK20 is a privacy-focused token framework that went live on Starknet this week. It extends confidentiality beyond simple transfers into DeFi use cases like lending, staking and token swaps under a unified privacy layer, and it uses post-quantum secure cryptography.
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What is the biggest obstacle to on-chain privacy right now?
According to StarkWare co-founder Eli Ben-Sasson, the obstacle is no longer cryptography but UX. Privacy systems need large user pools to provide meaningful anonymity, and bad wallet flows, slow syncing and limited compatibility have historically kept adoption — and therefore anonymity sets — too small.
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Will pERC-20 actually become an Ethereum standard?
Not yet. Like every Ethereum Improvement Proposal, pERC-20 must clear a lengthy review process before it could see widespread adoption. Its emergence alongside STRK20 signals a shift in developer attention, not a confirmed standard.
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