Aztec Labs has relaunched zk.money, a self-custodial wallet designed to conceal payment amounts, balances, and recipients for Ethereum users. The return of the privacy tool, which initially operated from 2021 to 2024, offers a new avenue for on-chain anonymity by routing transactions through the Aztec Network, although deposits from Ethereum remain publicly traceable.
Market Context
The privacy sector on Ethereum has seen renewed interest as developers seek to balance transparency with confidentiality. While the original zk.money served more than 75,000 wallets and processed over $100 million before its 2024 shutdown, the broader ecosystem is still evolving. Ethereum developers are currently weighing proposals for the planned 2027 Hegotá upgrade, which could allow privacy applications to handle transaction approvals and fees with reduced reliance on external services. These proposals remain under consideration, making the immediate launch of Aztec's independent network a significant interim solution for users seeking privacy.
Analysis
The relaunched wallet operates by converting USDC and USDT into DAI upon deposit, making DAI the sole currency used within the private layer of zk.money. Aztec Labs CEO Joe Andrews stated that DAI was chosen because it is considered "the most decentralized of the mass-market stablecoins used today on Ethereum." The system allows users to send money via readable names (e.g., bob.zk.money) or payment links rather than long wallet addresses. However, the privacy is not absolute; while transactions inside the Aztec Network are hidden, the initial deposit from Ethereum reveals the sender and amount. The wallet is self-custodial, meaning operators cannot freeze or spend user funds, but it includes a sealed server that co-signs operations and screens addresses against sanctions policies.
Key Numbers
- Deposit, payment, and withdrawal caps are set below $2,500 per transaction during the Alpha phase.
- All users share a $50,000 daily deposit allowance, which replenishes over time.
- The original zk.money processed over $100 million and served 75,000+ wallets before closing in 2024.
- Deposit costs are approximately 35 cents plus Ethereum fees; withdrawals cost 20 cents.
- Users receive 100 sponsored transactions per day, subject to contract funding availability.
- The software is in early Alpha and has not been fully audited, with a critical V5 proof system flaw disclosed in August.
What to Watch
Traders and privacy-focused users should monitor the security status of the Aztec Network, particularly regarding the disclosed critical flaw in the V5 proof system. Aztec Labs plans to launch a separate system called Oxide to check for errors caused by bugs until the V6 fix is ready. Investors should also watch for the gradual raising of transaction limits as confidence in the system grows, as well as the progress of the 2027 Hegotá upgrade proposals that could further streamline privacy infrastructure on Ethereum.