Compiler: Baihua Blockchain

As Bitcoin soars and institutions accelerate on-chain, a long-ignored fatal weakness finally erupts: The naked ledger is pushing everyone’s assets and trade secrets towards a full-network public execution.

In this bull market, Zcash, which has been silent for years, has experienced a violent resurgence, while Near has forcefully made its breakthrough with a disruptive cross-chain intent architecture. When the “crypto version of Bitcoin” meets the “universal liquidity layer,” privacy is no longer a fringe self-indulgence of geeks, but an absolute necessity for physical businesses, hedging whales, and autonomous AI agents to enter the field.

How will zero-knowledge proofs and programmable confidential finance spark? How do cross-chain intent transactions resolve security crises in the background? How will quantum resistance and hundred-fold expansion reshape the landscape? This conversation deeply dismantles the foundational thinking of two top architects—the ultimate moat of the next crypto cycle lies within this quietly profound privacy revolution.

1. Market Explosion and Narrative Evolution: Cross-Chain Interconnection, Real Adoption, and Complete Value Capture

Host Laura Shen: Hello everyone, welcome to Unchained. Today's topic is on-chain privacy, confidential computing, and the latest ecological developments surrounding Zcash. We have invited two heavyweight guests: Illia Polosukhin, co-founder of Near Protocol, and Mert Mumtaz, co-founder and CEO of Helius and opinion leader in the Zcash community. Illia is also one of the co-inventors of the foundational architecture of modern large language models, Transformer.

The current crypto market is exhibiting a strong upward momentum. Bitcoin has recently shown robust performance, but the rise of Zcash and Near is especially eye-catching. Zcash has surged significantly in a short period, nearing its historical high, with a rapid rise in market capitalization; Near has similarly entered a strong market. Zcash is advancing key foundational upgrades, and Near has recently launched a series of highly disruptive architectural features, with significant synergistic effects between the two. Could you both analyze deeply what the core fundamental logic behind this round of asset explosion is? Illia, please start.

Illia Polosukhin: For Near, over the past few years, we have devoted ourselves to tackling a core infrastructure issue: breaking the artificially divided blockchain ecological islands to achieve true cross-chain interconnection. Zcash is one of the core ecosystems we have deeply integrated, and at the same time, we have also interconnected multiple networks including Solana, Ethereum, Telegram, and Tron. Our ultimate goal has always been to eliminate ecological barriers and truly fulfill the long-standing promise of the crypto industry which users have rarely managed to fully experience—unified liquidity and a unified global market.

As users begin to scale the use of our first-party native applications, the market gradually realizes that this is the form of blockchain interaction that should exist. More significantly, Zcash and Near have for the first time made true on-chain privacy highly usable in a production environment. Looking back, the lack of privacy has always been the biggest pain point in my daily use of blockchain. Previously, I maintained a complex spreadsheet on Ethereum and Near containing hundreds of wallet addresses to meticulously track the flow of funds, counterparties, and residual gas fees, always worried about identity exposure due to address association, being unable to pass strict compliance checks, or suffering from malicious attacks based on on-chain amounts and timestamps.

Now, with the confidential transaction capabilities delivered by the Zcash cryptographic engineering team and the interaction with Near, these underlying concerns have been completely resolved. These technological breakthroughs, combined with the macro trend of the global financial system accelerating on-chain, have led to exponential growth in real users and business scale, which is the key driving force reshaping asset fundamentals and valuation logic.

Mert Mumtaz: Regarding the price increase, frankly, I tend to remain relatively calm when the market is on the upswing; in contrast, I feel more motivated during market downturns or engineering challenges because that’s when the moat is built. From the perspective of market liquidity, the overall improvement in risk appetite benefits the entire industry, but the key lies in exploring who can beat the market Beta and achieve excess Alpha. Zcash and Near have indeed managed to do so.

The logic behind market participants buying assets varies. For Zcash, the most intuitive narrative is a crypto and quantum-resistant version of Bitcoin. For those who understand the decentralized underlying logic, this positioning is already persuasive enough. However, it is important to clarify that Near significantly benefits from the liquidity input of Zcash, but without Near providing substantial cross-chain interactivity at the wallet and infrastructure layer, Zcash’s liquidity might still be trapped within centralized trading platforms’ ledgers. While most retail investors tend to leave their assets on trading platforms, hardcore believers holding significant funds must rely on on-chain native features to construct strategies.

I believe the mere “privacy” label alone is insufficient to support such a scale of explosion. Privacy may bring about a differentiation barrier for a period, but in the long run, all underlying public chains will gradually integrate different forms of privacy solutions. From first principles, assets without privacy protection cannot become the ultimate store of value. Real value storage requires minimizing unexpected risks, and the regulatory penetration, targeted attacks, and commercial liabilities caused by on-chain information leakage are the core sources of risk. Thus, privacy is merely a key link in the complete puzzle; what truly drives the market's re-evaluation is a whole narrative closed-loop that includes privacy, quantum resistance, absolute value storage, and ultra-large-scale throughput, which is why traditional concepts cannot replicate similar price increases.

2. Reshaping the Decentralized Finance Paradigm: Zcash Value Storage and Near Intent Architecture Synergy

Host Laura Shen: From market dynamics and on-chain movements, this synergy seems to show us that the Bitcoin DeFi concept has become a reality in another form—it was not born on Bitcoin’s mainnet, nor was it implemented through Bitcoin Layer 2, but rather by combining Zcash’s native properties with Near’s programmability. Zcash has a deflationary hard currency model similar to Bitcoin, while also possessing native zero-knowledge proof capabilities for shielded transactions; Near plays the role of the infrastructure that allows top value storage assets to enter the core of decentralized finance. How do you assess this analogy?

Mert Mumtaz: This analogy captures the essence of the architecture. We previously promoted the practice of seamlessly introducing ZEC assets into the Solana ecosystem through the Near infrastructure. You can view Zcash as an evolutionary alternative to Bitcoin, or a hardcore vehicle provided for specific capital with different security tradeoff needs.

At the same time, Near is fulfilling the vision of Ethereum’s initial design that was not fully realized. Looking back at the early blockchain scaling roadmap, sharding technology was recognized as the ultimate solution, and Near is one of the few Layer 1s that has completely implemented the sharding mechanism in a production network. Not only that, but Near has also become the universal liquidity hub across the network through Near Intents. This has formed two highly complementary evolutionary paths: one reshaping the most robust value storage asset, the other reshaping the most extensible high-concurrency clearing hub.

Illia Polosukhin: Our system design philosophy has always been based on non-zero-sum games, with the core proposition being how to enable underlying cryptographic innovations to seamlessly reach the terminal gauge and translate into a smooth user experience. Bitcoin has long been trapped in ecological isolation, partly due to a lack of native privacy support at the early layers, and partly because it is widely seen as a static reserve asset, lacking the motivation to interact deeply with external multi-chain ecosystems.

Zcash is fundamentally different. With its complete on-chain anonymity, holders not only wish to store value but also want to participate securely in the global economic cycle and commercial payments. The external public chain ecosystem has now matured significantly, and traders from other networks urgently need to allocate highly liquid privacy value reserves without friction. This bilateral demand converges here, and what Near has built is a Universal Liquidity Layer that establishes a trustless routing network for cross-ecosystem capital.

Host Laura Shen: This combination is particularly crucial for high-net-worth whales and institutions. From on-chain analysis and journalistic research perspectives, the reduction in transaction transparency indeed increases tracking difficulty; however, for deep market funds, public addresses mean exposing all financial positions to network monitoring, even leading to follow-up arbitrage, targeted liquidation, or malicious on-chain public opinion censorship. This anonymity clearly provides refuge for large-scale funds.

Illia Polosukhin: Speculative trading was indeed the main driving force of blockchain early on, but over the past year+, a profound paradigm shift is taking place at the industry’s foundation: real businesses, multinational new financial institutions, and autonomous AI agents are beginning to deeply adopt blockchain as the underlying clearing track, with leading cloud service providers also accelerating integration of on-chain proxy payment interfaces.

In speculative scenarios, the transparency of on-chain data, while presenting risks of sandwich attacks (MEV) and tracking, is still bearable for some retail investors. However, once it cuts into physical business operations, a completely open and transparent ledger mechanism becomes a fatal flaw. Suppose you buy a cup of coffee during daily consumption; not only can the merchant see the payment amount, but they can also trace your entire asset balance, historical counterparties, and funding paths; for multinational corporations, if all supplier payments, supply chain settlement costs, and revenue transfers are publicly disclosed around the clock, the core commercial secrets of enterprises will be completely lost.

In the past, people often questioned why privacy became the core narrative only after Zcash had been born for years; the fundamental reason is that the industry has finally transitioned from closed-chain games to real commercial implementations. In the process of global financial pipelines accessing decentralized networks, privacy technologies have transformed from optional configurations to core enabling tools for eliminating operational compliance barriers for businesses.

Mert Mumtaz: This security distinction is vividly reflected in international travel and high-end business consumption. Currently, many people use USDT on the Tron network for high-frequency payments, but when booking international flights, high-end hotels, and private concierge services, using ZEC through Near Intents for the entire process can create an extremely tight operational security barrier (OpSec). Especially in certain specific regions of Europe, offline kidnapping and extortion incidents targeting publicly wealthy individuals are frequent; strictly limiting on-chain financial exposure is a basic security bottom line.

In practical scenarios, merchants typically do not need to have a native understanding or settlement of Zcash. Users only need to initiate intents in a Zcash native wallet capable of payment, and Near Intents can complete the optimal liquidity routing in the background, automatically converting and completing payments on the target chain, such as settling USDC on Solana, Ethereum ecosystem assets, or even connecting with compliant brokers. Unlike traditional centralized cross-chain bridges or transparent transfers, the counterparties cannot trace the underlying vault address and net asset size of the payer, thus eliminating targeted pricing and information resale behaviors aimed at high-net-worth clients.

3. Underlying Architecture Showdown: User-Side Zero-Knowledge Privacy and Network-Side Programmable Confidential Computing

Host Laura Shen: The academic and engineering communities often distinguish between “privacy” and “confidentiality.” As the new technology cycle unfolds, understanding the differences between these two is crucial. Could you both detail their essential distinctions in terms of cryptographic constructs, system state processing, and application scenarios?

Illia Polosukhin: In engineering implementation, the two represent entirely different technical evolution paths and state models. The reason we specifically emphasize confidentiality is to accurately distinguish its technical differences from traditional privacy.

Privacy networks represented by Zcash are based on pure user-side zero-knowledge proof architectures. Proofs for each transaction are generated independently by the client locally and submitted to consensus nodes. In this mechanism, only users holding private keys know their account balances and have decryption capabilities; users only need to prove to the entire network the status credential of having the legal right to transfer funds. The advantage of this model is extreme user autonomy, but its underlying limitation is that there is no shared state across the network. Since collaborative multi-party computations cannot be executed on a shared state, such architectures struggle to support the complex general logic found in traditional smart contracts, with applications mostly limited to peer-to-peer fund transfers and basic operations.

To break this limitation and achieve fully programmable decentralized confidential finance (Programmable Confidential DeFi), the system must possess a confidential computing environment capable of processing shared states. Near employs a fused architecture, integrating multi-party secure computation (MPC), trusted execution environments (TEE), and zero-knowledge proofs (ZKP) in a multilayer nested collaboration:

1. Execution Environment Isolation: Our validator nodes are directly deployed within a hardware-isolated secure enclave, ensuring that even physical access to the server hardware cannot extract internal running memory data and state change information.

2. Communication Transmission Protection: Data flow between the enclave and the external network is dynamically encrypted using multi-party computation throughout, ensuring communication cannot be eavesdropped or tampered with.

3. External Verifiability: The final states submitted by the nodes to the mainnet come with zero-knowledge validity proofs, meaning network validators do not need to peek into internal computation details to confirm the mathematical correctness of state transitions.

Based on this confidential computing foundation, developers are able to create confidential automated market makers (AMM) with global liquidity pools, confidential lending protocols, and confidential perpetual contract trading platforms. Funds can reside in confidential balances without needing to be decrypted for exposure, allowing for direct opening or closing of positions or obtaining liquidity yield, thus meeting the needs of security-conscious retail investors while clearing core barriers for regulatory institutions to enter decentralized finance.

Mert Mumtaz: For extreme value storage assets, the primary goal of the system is to provide absolute physical security and irrefutable mathematical certainty, reducing the risk of unknown external interference to zero. It needs to provide end-to-end absolute anonymity and resistance to quantum cracking, ensuring that for ultra-long periods of five or even ten years, no external third party can initiate compliance blockades or judicial offensives against holders through historical on-chain evidence. However, this pursuit of extreme privacy architecture entails inevitable engineering trade-offs—you cannot directly build a high-throughput on-chain order book on the native Zcash network.

Conversely, when the architecture shifts toward programmable finance for complex ecosystems, the system must serve entirely different participants: decentralized application teams, hedge funds, asset custodians, and even compliant ETF issuers. Such scenarios require the system to possess state scalability and programmability, not simply adopting the end-to-end isolated onion routing logic. In most commercial financial scenarios, the confidentiality of transaction amounts and asset types is often more practical than complete isolation of addresses. For example, in Solana's confidential transfer standard, the account addresses of the sender and receiver retain necessary traceability to adapt to some anti-money laundering (AML) monitoring, but the specific transaction amounts and asset details are strictly encrypted, thus satisfying the protection of institutional business secrets while avoiding triggering compliance checks from regulatory bodies.

4. Near Intents Operation Mechanism: Cross-Chain Decentralized Settlement, System Risks, and Multilayer Security Defenses

Host Laura Shen: Next, let’s delve into the actual operating logic of Near Intents. Illia, please outline the entire internal lifecycle of an end-to-end cross-chain transaction: for example, a user wishing to exchange a specific asset from Solana for another asset on Ethereum—what does the entire backend scheduling process look like? How is user experience and confidentiality maintained?

Illia Polosukhin: From user interaction to final settlement at the underlying layer, the entire process is decoupled into four core stages:

The first stage is Intent Broadcasting. The user initiates a transaction request on the frontend without needing to manually plan complex cross-chain paths and multiple signature authorizations—just broadcasting their expected outcome to the intent network, for instance, promising to pay a certain amount of SOL and requesting an equivalent swap for BTC or ZEC on the target network.

The second stage is Solver Competition and Matching. Professional market makers and off-chain solvers distributed around the world begin to listen to the intent pool, using their respective off-chain algorithms and market-making liquidity for real-time millisecond bidding. Solvers evaluate the optimal exchange paths, slippage, and gas costs, returning the best quotes to the user. Once the user selects and signs the confirmation, an irrevocable “Signed Intent” is immediately generated.

The third stage is Chain Abstraction via MPC. Near's validator set includes a highly distributed threshold multi-party computation (MPC) network. This network can independently deduce and sign transactions on external heterogeneous blockchains (such as Ethereum, Solana, Bitcoin, or Zcash), essentially establishing a set of decentralized threshold addresses fully controlled by Near's underlying smart contracts. Users only need to transfer funds to the dedicated address held by Near; the contract can perceive external asset deposits under a zero-trust premise.

The fourth stage is Private Sharded Verification Contract Execution. Verification contracts deployed on Near’s private sharding act as the decentralized final settlement ledger. They are responsible for verifying the legitimacy of the intent signatures, calibrating the status of external asset arrivals, and atomically updating internal account balances. The system then drives the MPC network to release native assets on the target chain, which can be directly deposited into the recipient's regular wallet or seamlessly into Zcash’s shielded address, achieving an experience similar to centralized trading platforms while retaining complete control under the on-chain smart contracts.

Host Laura Shen: Currently, DefiLlama has detected that the total value locked (TVL) of Near Intents has reached a significant scale, with ZEC assets accounting for a substantial portion. However, in an environment of complete chain privacy, the system's transparency decreases, and the difficulty of discovering potential security vulnerabilities significantly increases. The industry has previously experienced severe cases due to hidden pool layer defects that could potentially lead to unlimited issuance behind the scenes. Under the current complex architecture, how should users assess risks when participating in interactions? What engineering defenses has the development team deployed?

Mert Mumtaz: Looking back at history, the risks of increased issuance in Zcash fundamentally stemmed from specific cryptographic constraints in the early Orchard shielded pool, which made it difficult for the external consensus to perceive direct token proliferation within the pool. To mathematically eliminate this problem, the engineering team introduced the Turnstile mechanism, which strictly enforces that funds exiting the pool cannot exceed the total historical funds that entered the pool, thus blocking the outflow path for hidden issuance.

Currently, the entire network has steadily progressed to a new Ironwood funding pool phase, with over 90% of the deposited funds completing hard migration. Any interactions with the old pool will be automatically routed and triggered for mandatory aggregation into the new pool. More critically, the new cryptographic circuit has undergone independent formal verification by three top institutions, with mathematical proof indicating that detectable issuance vulnerabilities cannot be established under the current structure.

For general smart contract platforms, due to possessing richer high-dimensional state statistical indicators, protocol layers usually have dynamic responsiveness capabilities when anomalies occur; however, for extremely anonymous underlying public chains, once a disastrous mathematical failure occurs, the difficulty of investigation and hot repair indeed increases exponentially, which is the engineering cost that high-intensity privacy development must bear.

Illia Polosukhin: Based on this architectural difference, Near chose a centralized security engineering strategy. In a model based on complete client proof, no single point can hold the entire network state, making it difficult for anomalous transactions to be detected by the system in milliseconds. However, within Near’s private sharding architecture, although external observers cannot peek into state details, the consensus node array within the secure enclave has complete state verification and alert capabilities.

At the level of code security, the era of relying on manual audits to provide static reports is coming to an end. Even if several senior architects work together in review, it is difficult to exhaustively identify all hidden logical boundary errors. We have fully introduced an AI-assisted efficient formal verification pipeline, capable of conducting full-path mathematical deduction on code during engineering development and continuous integration stages at a computational cost hundreds of times lower than traditional solutions, strictly proving that the contract does not have any logical vulnerabilities such as arbitrary minting, state rollback conflicts, or unauthorized liquidity extraction.

In terms of operational defense during system runtime, Near has deployed an on-chain active risk control net called Shield. This system conducts all-weather dynamic monitoring of the entire chain liquidity infrastructure, cross-chain solver quote deviations, and sudden on-chain states. Taking the recent malicious chain reorganization and node cooperative denial-of-service attack on the Litecoin network as an example, attackers attempted to initiate double-spending attacks by leveraging cross-chain lags; the Shield system automatically severed the routing handshake with that network at the first instant it detected the distortion of the external network state, pausing the acceptance of anomalous settlements until the external mainnet stabilized. This proactive adaptive defense is more robust than passive off-chain investigations.

5. Evolutionary Outlook: Zcash NU7, Lightning-Level Quantum-Resistant Upgrades, and a New Landscape in Privacy Finance

Host Laura Shen: To conclude the program, let’s look ahead to the future roadmap. Zcash is about to undergo a crucial protocol upgrade codenamed NU7, which the community is focusing on significantly. Mert, please systematically elaborate on the essential technological leaps contained in this upgrade and its subsequent plans.

Mert Mumtaz: NU7 and its subsequent iterations will release several significant improvements in the next year or so, focusing on three key dimensions: performance throughput, cryptographic minimalism, and quantum resistance.

First is the leap in block efficiency and confirmation delay. The basic block time of the network will be significantly reduced from the traditional 75 seconds to 25 seconds. This optimization will directly enhance the interoperability performance between Zcash and Near and other cross-chain intent networks, greatly shortening the finality confirmation window after solver matching, allowing hidden settlements to truly achieve response speeds on par with modern high-concurrency public chains.

More critically, the underlying leap lies in the core project plan codenamed Project Tachyon. The mission of this plan is to achieve two to three orders of magnitude of network scaling, while smoothly evolving the underlying cryptographic system to a fully quantum-resistant state. Currently, many systems' protective strategies can only achieve “quantum recoverability”—meaning that in the event of a quantum computing impact resulting in key breaches, assets can be remedied through off-chain interventions or hard forks; while Tachyon's goal is to immunize underlying algorithms against quantum attacks from the ground up, eliminating all post-event intervention risks.

Additionally, new shielded pools are pushing for simplified zero-knowledge proof circuit designs. In the cryptographic world, the more complex the circuit, the more components and constraints it has, the wider the potential mathematical defects and attack surfaces; conversely, the lighter and more minimalistic the circuit, the higher the theoretical determinacy and safety of the system. More simplified proof structures not only eliminate potential hidden risks but can also significantly lower the hardware threshold for generating proofs from mobile lightweight wallets.

In terms of decentralized governance mechanisms, the community is also steadily advancing the design of the underlying architecture based on fully private on-chain voting primitives. This allows network stakeholders to express governance intentions anonymously and separately while genuinely staking their interests, completely avoiding common risks of bribery and coercion in on-chain voting. This series of breakthroughs is turning Zcash from a single early privacy coin into an indestructible new type of global base currency model.

Host Laura Shen: The outline of technological evolution is already very clear. With Zcash fortifying its underlying quantum-resistant hidden reserves, Near Intents fulfilling cross-ecosystem seamless scheduling, and a high-performance decentralized derivatives layer including Hyperliquid deeply nested, a new DeFi paradigm driven by programmable confidential settlements is rapidly taking shape. Thank you very much to Illia and Mert for their detailed sharing and in-depth dialogue.

Illia Polosukhin / Mert Mumtaz: Thank you for the invitation.

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Source: https://www.youtube.com/watch?v=fqWH5fMA8zE