Oasis Network has been a leader on user privacy in Web3, and with Smart Privacy they create a system that protects sensitive data, avoids manipulations and prevents front-running by bots. However, privacy also comes with some challenges, and that’s what we will dive into in this article.
The problem of transparency
Privacy is an important part of all financial services, as banks don’t allow other people to see how you spend, invest, or otherwise manage your money. In traditional finance or any other industry that manages personal information, privacy works to protect sensitive consumer data, avoid manipulation of individuals or entire markets, and support a secure environment for sharing valuable information. Privacy is even more important in the early years of Web3.
But at the moment, Web3 makes it very hard to protect personal data. You can’t stay private. Bitcoin, Ethereum and other blockchains were built on the principle of full transparency for everyone around the world who stores a copy of the LEDGER on their node or goes online to browse a network explorer. From this perspective, companies like eBay, Amazon, PayPal and Visa offer better data privacy than most Web3 networks.
Web3 is gradually realizing that this problem needs an urgent solution. But the solution needs to be native to a blockchain network and it needs to be usable across different networks. The Oasis Network has built the ideal permissionless, decentralized financial network that would be private by default, and only transparent when necessary, which gives the user a choice. That’s also where the Oasis Privacy Layer (OPL) framework comes into play bringing privacy to any EVM blockchain – more on that later.
Different users have different needs
Every decentralized application on the blockchain and every Web3 user have different preferences for how to manage privacy. Those who interact with a Web3 social platform may require a different type of privacy from those who invest in tokens through DeFi platforms. The requirements can really change per platform and per individual.
Some core principles of blockchain technology aren’t ideal for every user and their desired use case. For example, openness and transparency can be important for validating some publicly shared information across all users. But this characteristic becomes problematic when the stored information is personal and sensitive. We know this problem as the blockchain privacy paradox – and Oasis solves this.
Decentralized social applications built on Oasis Sapphire can offer stronger user privacy and elevated security, while still providing an experience similar to the social media we all like and use every day. Dapp developers need to integrate the Oasis Privacy Layer (OPL) framework to leverage privacy-centric features and seamless interoperability across multiple blockchain networks.
The solution of smart privacy
Personal privacy is an important trend in Web3. From confidential voting for Web3 communities to in-game privacy for player strategies and collectibles, protecting data is important. Even outside of Web3, governments and industries around the world recognize that data protection and privacy are crucial human rights. But in the transparent-by-default world of blockchains, a lack of privacy is still a big problem.
Fixing that transparency problem isn’t about making everything private, but it’s about applying a balance. Smart privacy in Web3 means flexible, customizable secrecy depending on the user and the use case. That’s where Oasis Network comes into play, as they built a privacy-first blockchain platform. Sapphire, for example, runs on Oasis and is the only confidential EVM network in production.
Bringing better privacy to every blockchain
Oasis doesn’t just want to build strong confidentiality tools for its own network. Ethereum and every other EVM network needs privacy too. This is why Oasis built the Oasis Privacy Layer (OPL), a cross-chain EVM-compatible privacy solution that allows confidential smart contracts to exist. Developers can use OPL for dapps on any EVM chain, including but not limited to Ethereum, BNB Chain and Polygon. This means that developers with a dapp on any EVM chain can utilize OPL to introduce flexible privacy for their dapp and community. They can use this without migrating away from their native blockchain.
This privacy layer allows users to customize and handpick which data is kept secret and which is exposed to the global network on a case-by-case basis. These confidentiality frameworks built into the Oasis Network are critical to a multi-faceted data economy. Some builders and users need complete transparency, some need complete privacy, but most need something in between these two extremes. With greater control over the settings that protect their data, Web3 users are in complete control of their own data.
Confidential smart contracts are able to keep this data private, even from node operators within a network. Moreover, developers can set the level of confidentiality through customization options. Investors can keep the amount they invested into a project private, while a DAO could protect voting information during the evaluation of a proposal. This would even prevent MEV bots from front-running your trades.
The future of Web3 privacy
Nobody wants personal attacks and data leaks from Web2 and Web3. It’s time for Web3 privacy to stand far beyond these meager attempts at data protection from Web3. Consumers no longer wish to have sensitive information exposed and exploited. And if Web3 is to ever become a mainstream industry, confidentiality is essential. This is why the Oasis Network matters for the future of Web3. Offering strong confidentiality to integrate with every sector of Web3 – from finance to collectibles – will position the entire industry for a bright future with security and self-sovereignty in a data economy.
