This article describes the prototyping of Privacy Pools on Stellar's smart contracts platform, implementing a privacy-preserving protocol that uses zero-knowledge proofs and Association Set Providers (ASPs) to enable private transfers while maintaining compliance standards.
The article details the implementation of Privacy Pools on Stellar, a privacy-preserving protocol that obscures the link between fund deposits and withdrawals using cryptographic zero-knowledge techniques. The design incorporates Association Set Providers (ASPs) that define compliance standards to help mitigate illicit use while allowing participants to selectively associate with others meeting their chosen standards. The implementation uses Groth16 SNARKs with BLS12-381 curves supported by Soroban, along with custom tooling including circom2soroban (a converter for Circom outputs to Soroban-compatible Rust code) and coinutils (a CLI tool managing the complete lifecycle of privacy pool coins). The article covers the mixer scheme using commitments and Merkle trees, the role of nullifiers to prevent double-spending, and discusses future work including frontrunning protection and rage-quit functionality.
