Chad's Lounge w/ Redacted

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THORChain
@THORChainNov 6, 2025

The Spaces covers THORChain’s non‑KYC, native L1 swap capabilities and segues into an in‑depth discussion with Finn (founder of Redacted) about bringing opt‑in, zero‑knowledge privacy to Rigera (THORChain’s app layer). Finn explains the architecture: users deposit assets, optionally toggle privacy to create a private sub‑account, while a pooled proxy account and ZK proofs decouple on‑chain activity from public identity; custody remains with users. Privacy strengthens as the anonymity set grows, with action‑based fees (~15 bps) and an internal gas tank funded by any supported token. Transactions remain visible but unlinkable, with viewing keys/export for compliance and OFAC screening to block sanctioned addresses. Redacted targets a year‑end launch pending audit, starting with swaps and easy hooks for app‑wide integration; future features include dark pools. Tokenomics include a revenue‑sharing token and NFTs; Pragmatic Monkey shares Rigera’s $100k investment, staking and reinvestment plans, and clarifies users pay Rigera’s base fee plus Redacted’s privacy fee. The session closes with THORChain swap interface updates and a call for self‑custody.

Space Title: Privacy on Thorchain’s App Layer via Redacted (Rijira)

Participants and Roles

  • Patriot (host; Thorchain community advocate): Moderated the discussion, framed the privacy narrative and Thorchain context.
  • Kenton Ralph Toes (co-host; fund manager): Runs User Rune Fund, operates Thorchain nodes; initiated detailed technical and market questions.
  • Finn (founder of Redacted): Presented Redacted’s privacy layer architecture, economics, integration plan, and roadmap.
  • Pragmatic Monkey (Rijira representative): Clarified fee split, Rijira’s investment/staking plan, and how protocol revenue is utilized.
  • Crypto Vigilante (audience): Briefly mentioned external privacy projects; discussion refocused on Redacted/Rijira.

Market Context and Narrative

  • Privacy has re-emerged as a dominant narrative (e.g., recent Zcash momentum, concerns over centralized exchanges freezing funds).
  • Thorchain’s ethos aligns with privacy, self-custody, and permissionlessness, positioning the ecosystem to benefit from a privacy-first DeFi trend.
  • Redacted’s approach potentially makes ZK-powered privacy broadly accessible across many L1-native assets via Thorchain’s app layer (Rijira), without requiring users to adopt a single privacy coin.

Thorchain Fundamentals (Host’s Overview)

  • Thorchain is a decentralized exchange facilitating swaps of native L1 assets (no bridges/wrapped tokens), self-custody, and no KYC.
  • RUNE is the protocol token; users do not need to hold RUNE to swap.
  • Swap fees are used to buy RUNE, funding yield for liquidity providers (LPs) and nodes; no block rewards; Thorchain is currently deflationary (5% of rewards swapped to RUNE and burned).
  • TSY token: Like a preferred equity instrument—10% of protocol revenue goes to TSY holders. Savers/borrowers should claim TSY to receive yield.
  • Strong emphasis on withdrawing RUNE from centralized exchanges to self-custody and bonding, and participation in Thorchain community channels.

Redacted’s Privacy Layer for Rijira: Design and User Experience

  • Scope: Redacted is building a zero-knowledge (ZK) privacy layer for the Thorchain app layer (Rijira), enabling private interaction with DeFi primitives while maintaining self-custody.
  • Opt-in privacy: Users deposit assets (e.g., XRP) via the Rijira front end, then toggle a “privacy” switch to activate a private sub-account. Public-by-default; privacy must be explicitly enabled.
  • Account model:
    • Public main account: Standard user account.
    • Private sub-account: Used for private interactions.
    • Proxy account (shared vault): Holds all deposited assets from users running in private mode; acts as the “bank” in the middle.
  • Interaction flow:
    • Deposit to private mode routes assets to the proxy account.
    • Users transact from the private sub-account; on-chain actions become unlinkable to the user’s public identity via ZK proofs.
    • Users can move assets between public and private sub-accounts.

Custody, Anonymity, and On-chain Visibility

  • Custody: Remains entirely with users on Thorchain; Redacted does not take custody. Only the depositor can withdraw/interact with assets due to ZK constraints.
  • Anonymity set: Privacy strength improves as more users deposit and use private mode (larger pool increases obfuscation).
  • On-chain view:
    • Transactions by private sub-accounts are visible on-chain but not linked to the user’s public account.
    • The proxy account securely holds assets; it is difficult to trace holdings or flows back to specific public identities when the privacy set is sufficiently large.
  • Auditing/tax support: Redacted will provide viewing keys and export functionality for users who want to share private transaction records with auditors/tax consultants.

Fees, Gas, and Economics

  • Redacted service fee: Targeting ~15 basis points (bps) or lower, assessed only when actions are performed (e.g., swaps, staking)—no fees for idle holdings.
  • Gas tank: An “internal gas tank” system to cover transaction fees in private mode. Users can fund it once with any supported token; Redacted auto-swaps as needed. Users must keep it topped up.
  • No requirement to hold Redacted tokens to use privacy features.
  • Rijira fee model: Users pay standard Rijira app fees for actions; Redacted’s privacy fee is an additional overlay. The combined cost is intended to remain competitive.

Compliance and Audits

  • Compliance: Redacted blocks interactions from OFAC-listed addresses and may integrate additional lists over time (via cofounder’s analytics project). Redacted cannot freeze funds (no custody); it only gatekeeps service use.
  • Audit and launch timeline: Aiming for end-of-year launch, contingent on audit completion. Initially testing with swaps; plan to roll out privacy across currently live apps as audit and testing permit.

Integration Scope and Developer Ergonomics

  • Initial coverage: Start with swaps; expand to all live Rijira apps soon after.
  • Developer integration: Redacted will provide a simple UI hook/button to toggle private mode; the backend handles privacy transfers.
  • If an app hasn’t added private-mode support, the relevant UI button will be disabled (“greyed out”). Users can switch back to public mode to interact normally.
  • Importantly, the private sub-account is a standard smart wallet on-chain, so it can interact broadly; privacy-specific functions still require the UI hook.

Token and NFT: Revenue Sharing and Project History

  • Redacted token and NFT:
    • Origin: Raised ~$800k USDT in early 2022 on Terra via “Ronin NFT,” launched the first ZK privacy solution in Cosmos with audits. Terra collapse halted operations; later developed a demo on Arbitrum but did not publish; pivoted to Thorchain’s Rijira.
    • Economics: Both the token and NFT share protocol revenue (“50 system” indicates both classes participate; NFTs may carry larger per-unit revenue share and be scarcer/more expensive). Tokens/NFTs are currently on Arbitrum; plan to migrate/launch via Rijira’s launchpad.
  • Redacted fee revenues are distributed to token/NFT holders. Users of the privacy service do not need the token; holding/staking is for revenue participation.
  • Rijira’s position (Pragmatic Monkey): Rijira invested ~$100k in Redacted from the Ecosystem Fund, plans to stake Redacted tokens to collect revenue, use some tokens for market-making/liquidity, and reinvest yields into protocol liquidity and growth.

Risk Isolation and Resilience

  • App layer containment: Redacted is confined to the Thorchain app layer (Rijira) to avoid risks to the base layer. Integrating privacy at the base layer would require deep changes (vault logic, routing, state verification) and increase systemic risk.
  • If Redacted’s team disappears: Contracts remain on-chain; users can withdraw to public accounts and continue using assets. Tokens/NFTs relate only to revenue distribution; assets are not at risk because Redacted has no custody.
  • Team distribution: Members in Germany, US, Canada—geographically decentralized.

Roadmap and Future Features

  • Dark pools: Not part of v1 but considered for future development. Goal: prevent predatory liquidation hunting and enable fairer markets by hiding order book details (limits/open orders) while preserving decentralization.
  • Point-of-sale integration: Long-term vision includes a “Redacted credit card” or PoS integrations enabling shielded payments (e.g., avoid exposing entire transaction history when buying coffee). Feasible but further out.
  • Expansion to other chains: After successful integration on Thorchain/Rijira, Redacted plans its own interface to route assets from other chains into Thorchain/Rijira for private interactions, potentially supporting more assets and liquidity. Discussion of intents was deferred.

Operational Updates (Thorchain User-Facing Interface)

  • Swap interface:
    • Dex aggregation: Backend refactor delayed ~2 weeks; once completed, subsequent updates will be faster.
    • Memo-less transactions and limit orders: Aiming to go live next week alongside 3.12; front-end will support at launch.
    • Bug reporting: Use the email link shown on the swap interface to report bugs/edge cases/formatting issues.
    • Encourage users to trade via swap.thorchain.org to avoid affiliate fees and retain self-custody.

Audience Q&A and Clarifications

  • Public vs private interaction in mixed trades: Private sub-account actions are public on-chain but unlinkable to the user’s public identity due to proxy account shielding and ZK proofs. Gains/losses interacting with non-private counterparties do not “break” privacy; they affect balances but not linkability.
  • App coverage when some apps lack privacy hooks: Users can still interact publicly or switch modes; privacy buttons will be disabled where not supported until integration.
  • External privacy projects: Mentioned briefly by an audience member; conversation remained focused on Redacted/Rijira.

Key Takeaways

  • Redacted introduces opt-in, ZK-based privacy across Rijira’s DeFi suite for any Thorchain-supported L1 assets—without sacrificing self-custody.
  • Architecture centers on a shared proxy account and per-user private sub-accounts, with only the depositor able to authorize withdrawals; privacy strength scales with the anonymity set.
  • Fees are modest (target ~15 bps), charged only on actions; users fund an internal gas tank with any token.
  • Compliance controls (e.g., OFAC lists) are enforced at the service layer; assets remain under user control.
  • Launch targeted by end-of-year pending audit; start with swaps, expand rapidly across apps with simple developer hooks.
  • Revenue-sharing via token and NFT; Rijira is an investor and will stake and recycle yields into ecosystem growth.
  • Future roadmap includes dark pools, PoS integrations, and expansion to other chains—all while keeping privacy confined to the app layer to protect Thorchain’s base layer.
  • Broader narrative: Privacy is becoming essential; Redacted on Rijira may offer Zcash-like functionality for a wide set of native assets, making privacy practical and accessible in multi-chain DeFi.