Balaji Srinivasan Reveals Secret to Ethereum's Next Big Leap

Former Coinbase CTO Balaji Srinivasan has proposed a bold new concept called “Zethereum,” which he believes could transform Ethereum by adding advanced privacy features. Sharing his ideas on X, Srinivasan detailed how a pseudonymous developer, whom he refers to as “Zatoshi,” could achieve this through smart contracts incorporating zero-knowledge (ZK) technology. While it resembles Bitcoin’s Satoshi, he explained how the network dynamics will be different.

Balaji Srinivasan Reveals Bold Idea for Ethereum Revolution

Srinivasan suggested that Zethereum would function as a “newly legal Tornado Cash,” referencing the recent court ruling that deemed the Ethereum-based privacy tool not unlawful. He described Zethereum as “APIs for all the zero-knowledge (ZK) innovation over the last few years.”

Moreover, he argued that implementing ZK privacy as smart contracts rather than at the base layer would allow rapid deployment while minimizing risks for the Ethereum network. “Essentially, it would be a way to ship much of Justin Drake’s impressive five-year ZK roadmap in three months,” Srinivasan stated. He added that the approach would allow for faster innovation and adoption.

ZATOSHI AND ZETHEREUM
Here’s a bold plan for how one brave engineer could strike a blow for internet freedom while bringing Ethereum all the way back: they just need to go Zatoshi and build Zethereum.

What does that mean? It means an pseudonymous developer with impeccable opsec…

— Balaji (@balajis) November 29, 2024

Addressing the potential risks, Srinivasan highlighted the importance of anonymity for the developer. “Anyone who wants to build a Zethereum should still go Zatoshi to do it: meaning full anon, with perfect opsec,” he noted. He also called for pardons for Roman Storm and Alexey Pertsev, developers linked to Tornado Cash, stating that such actions would affirm privacy rights.

Why Not Bitcoin?

Srinivasan compared Ethereum’s suitability for Zethereum with other blockchains, explaining why alternatives might fall short. “Why not Bitcoin? The base layer is essentially immutable at this point. And the BTC community is more focused on political innovation than technical innovation,” he wrote. On Solana and Base, he remarked that non-anonymous developers make them less suited for a privacy-focused project.

While acknowledging existing privacy and ZK scaling projects like Zcash and ZKsync, Srinivasan emphasized Ethereum’s distribution as key to mainstream adoption. “Adding easy privacy to Ethereum would mainstream Zcash’s ideas,” he argued.

Srinivasan concluded by framing the idea as timely due to recent legal and political developments. “If Tornado Cash is legal, you could first anonymously enable any Ethereum wallet to send Zcash-grade private transactions,” he stated. Hence, he outlined a roadmap for integrating ZK innovations into Ether.