With fewer privacy app choices available for Ethereum ecosystem blockchain users we compare the zkBob private wallet with Railgun & the Railway wallet.
The blockchain privacy landscape has changed dramatically over the past year. Sanctions against Tornado.cash and the arrest of the founder have sent shockwaves through the ecosystem. More recently, Aztec sunset their popular zk.money application, another privacy-enhancing tool.
These developments have left users with many questions and fewer choices for on-chain privacy. Personal privacy options are expected for many types of transactions (think of salary distributions, anonymous donations, purchasing sensitive medical products etc), however compliance factors and bad actors are making privacy more difficult for regular blockchain users.
It’s unfortunate because advances in zk (zero-knowledge) technology are enabling on-chain privacy like never before. Senders, receivers, and amounts can all remain completely anonymous during a transaction within a zero-knowledge pool. This creates a hybridized public ledger that is fully transparent while still containing some opaque information.
With zk solutions in place, personal financial transactions gain needed privacy. Users can choose to share their personal private information on their terms, rather than by default. This is an important distinction that gives control and self-sovereignty back to the user, and provides protection for a user's sensitive financial information.
Comparisons: zkBob private wallet and the Railgun protocol
While Tornado.cash and Aztec’s zk.money are two popular services which are no longer widely available, there are still some privacy-enhancing applications making progress in the Ethereum ecosystem today. There is no one-size-fits-all solution, and there is great value in the development of a wide range of applications as we collectively push the privacy space forward.
Below we compare zkBob with Railgun, a privacy application focused on DeFi. While zkBob and Railgun share some underlying features, there are also many differences between the two. We layout some similarities and differences for users (either new users or previous users of Aztec’s zk.money or Tornado cash) when thinking about which privacy application best suits their needs.
The table provides a quick overview, see detailed explanations below the table for more information.
Supporting multiple ecosystems is important for all applications today. It’s necessary to meet users where they are, and to take advantage of unique characteristics available for each chain. zkBob and Railgun both support multiple networks, and both have additional deployments in the pipeline. Current deployments:
- zkBob: Optimism & Polygon. Ethereum coming soon.
- Railgun: Ethereum, Polygon, Arbitrum and BSC.
Apps are designed for different types of users, and user preference comes into play when deciding which privacy application makes the most sense.
zkBob is created for broad usage across demographics. Bob represents the everyday user, and use cases like P2P payments, salary distributions and donations are all supported by the application. Individuals looking for personal privacy and larger organizations and DAOs looking for private distributions or vendor purchases can rely on zkBob for everyday privacy.
Railgun targets Defi users with the option to use the Railway wallet and Railway DEX for private swaps. Users can also transact to other Railway wallet users.
- zkBob: Individuals, companies and DAOs who need privacy solutions
- Railgun: DeFi for private swaps / private NFT transactions
zkBob and Railgun employ similar established technology under the hood. Both use the Groth16 proof system first pioneered by zCash for proving zk-SNARK circuits. Both zkBob and Railgun employed a trusted ceremony for setup, and Unspent Transaction Outputs (UTXOs) are used to update balance. Both applications support relayers to anonymize transactions.
Railgun uses community relayers with an additional fee, while zkBob currently uses a permissioned relayer with plans to decentralize in the future. zkBob also offers an optional remote proving mechanism, which allows for direct deposits into the pool, opening up integration options that are not available with Railgun.
- zkBob: Groth 16, UTXO, permissioned relayer, remote proving option.
- Railgun: Groth 16, UTXO, community relayers, no remote proving.
Security is paramount for privacy applications, and both zkBob and Railgun have undergone substantial security audits. Both projects feature open-source smart contracts for their zero-knowledge infrastructure and extensive developer and user docs.
- zkBob: Audited in 2023
- Railgun: Audited in 2021
Compliance and regulatory concerns are top of mind for all privacy protocols. There are different approaches to compliance based on risk tolerance, type of application, and operating processes. Compliance choices have implications for users, as they also inherit many of these risks when using an application.
zkBob focuses on preventative and proactive compliance. Deposit limits prevent large sums from entering the protocol all at once. This is vital to prevent funds coming in from large hacks (like this one where Lazarus purportedly moved hacked funds through Railgun). Hacked funds create real problems for protocols and users who don’t want to unwittingly help bad actors anonymize their funds.
In addition to limits, zkBob also features optional KYC, an integration with TRM labs to prevent incoming or outgoing funds related to sanctioned wallets, and geo restrictions. While these types of preventative measures can create challenges for regular users, they are designed to keep the zk pool free of illicit funds. This creates a safe environment for all users and helps them achieve privacy without fear of protocol censure or sanctions. zkBob also lets users download a history of transactions if they are ever asked to provide them.
Railgun focuses on the ability for individuals to provide records after the fact to those who request them through viewing keys. These keys can be shared with someone and they can view private transactions in perpetuity for a private address (read-only mode). This is helpful if regulators ask to see private transactions, although once they are granted access they have it forever. Railgun also provides a proof of innocence zk proof which can recursively show that all transactions were made using addresses that were not tied to any illegal activity.
- zkBob: Preventative and proactive, along with selective de-anonymization.
- Railgun: Retroactive and user-centric.
Fees are required for transactions, and zk proofs require higher fees due to their large size. Recent optimizations with zkBob have reduced the size of these proofs, and deployments on L2 chains reduce costs dramatically.
zkBob charges a flat 0.10 fee on Polygon and dynamic fees on Optimism based on the current gas prices. Railgun charges additional fees when shielding and unshielding transactions. The protocol takes a 0.25% fee per transaction for each shield or unshield. These fees are collected by the DAO treasury and distributed over time to stakers in the protocol. Users also pay additional relayer fees with Railgun, which are generally 10% of the total gas price added as a premium.
- zkBob: $0.10 per tx on Polygon, dynamic fees based on current gas prices on Optimism.
- Railgun: 0.25% for each shield/unshield transaction + 10% of gas price to use an optional relayer.
Railgun has a flexible model which accepts any ERC-20 token as well as ERC-721 NFTs. Private transfers are most effective with large-volume tokens like ETH and DAI. zkBob currently supports BOB, a stablecoin pegged 1:1 with USDC. However, due to increasing demand, an ETH pool will be added soon to the zkBob protocol on Optimism and Ethereum mainnet.
- zkBob: BOB stablecoins for anonymous, stable transfers. ETH & USDC pools coming soon.
- Railgun: Any ERC20 or ERC-721. Small pools can impact anonymity.
Railgun has a governance token called RAIL that allows holders to stake on proposals, protocol upgrades and more. RAIL is multichain and community DAOs on Polygon and BSC determine protocol updates on the specific chain. zkBob does not currently have a governance token. A multi-sig based governing board proposes updates which are voted and approved or rejected by the board members. All proposals are transparent and this small board allows for nimble development as zkBob is rolling out new features. Greater decentralization is in the future roadmap as community participation increases.
- zkBob: Multi-sig governing board with roadmap to broad community participation.
- Railgun: RAILGUN DAO and RAIL governance token
zkBob is designed for ease-of-use and new users can easily setup an account using an existing web3 wallet like MetaMask. zkBob takes advantage of local storage to make the process seamless for users, and optimized proofs mean that zkBob is available on any mobile device. The Railway wallet is designed more for crypto-natives; creating a new wallet requires several processes to save seed phrases, viewing keys etc. This can be daunting for a new user but fine for an advanced user.
- zkBob: Designed for everyday users with a simple, intuitive interface.
- Railgun: Designed for crypto natives and advanced users.
Privacy for blockchain users is an important next step for widespread adoption and usage. Privacy applications need to take into account many factors including their user base, compliance attributes, fee structure, governance and more when designing protocols that will move the privacy space forward and best support their users.
zkBob and Railgun both use zk technology to provide a secure and private environment for their respective audiences. Railgun is more tailored to advanced users and DeFi use cases, while zkBob is built for everyday users who want private transactions and businesses and DAOs that need to incorporate compliant privacy into their workflows. Both apps offer advantages and tradeoffs, and it’s always important to DYOR when selecting the best privacy solution for your needs.
✓ No hidden costs and minimal operational fees.
✓ An intuitive and easy-to-navigate user interface.
✓ Uncompromised transaction privacy and security.