Privacy

Three Transaction Modes

Merlin supports three levels of privacy for every transaction:

Public

Standard Ethereum transaction. Visible on-chain to anyone. This is the default mode.

Shielded (Railgun)

Fully private transaction using zero-knowledge proofs. Hides the sender, receiver, and amount. Uses the Railgun protocol on Ethereum mainnet.

To trade privately: "Buy $50 of Tesla privately"

Compliant (Privacy Pools)

Private transaction that is provably compliant. Your funds are hidden, but you can prove they don't come from sanctioned sources. Uses Privacy Pools with selective disclosure.

How Privacy Works

Merlin uses the Railgun protocol (via the Kohaku SDK) to enable on-chain privacy:

1. Shield: Your tokens are deposited into a shielded pool
2. Private operation: Trades happen within the shielded pool using zero-knowledge proofs
3. Unshield: When you want funds back in your public wallet, they exit the pool

The zero-knowledge proofs ensure that no one can link your shielded transactions to your public address.

Non-Custodial Privacy

• Your privacy keys are derived from your seed phrase
• No one (not even Merlin) can see your shielded transactions
• You always control your funds

Current Status

Privacy features are currently in development. The public transaction mode is fully operational.