Onchain Privacy with transparency, now on Avalanche

Discover how eERC20 lets developers build confidential, auditable, and gas-efficient apps on Avalanche. See how real projects are already putting it to work.

Avalanche Team1

and

Keenye The Unusual

Jun 04, 2025

Can Blockchain Be Both Open and Private?

One of blockchain’s greatest strengths is transparency. Anyone can view transactions on a public ledger, and that transparency helps people trust the system. But for all the benefits of visibility, there’s a real downside: everything is exposed. Wallets, transactions, and even patterns of behavior can be traced and analyzed. That’s fine for some use cases, but not for all. When institutions handle sensitive information or when developers want to keep competitive mechanics under wraps, too much transparency becomes a problem.

This is where eERC20 comes in. Developed by AvaCloud, it is a new encrypted token standard built for the Avalanche ecosystem. It gives developers a way to keep transactions private without compromising performance, compliance, or accessibility. By incorporating Zero-Knowledge Proofs and other cryptographic tools into a lightweight, gas-efficient package, eERC20 enables the protection of sensitive data while facilitating the development of decentralized applications on public blockchains.

What Are the Benefits of Using eERC20 Tokens?

Confidentiality: All balances and transaction amounts are fully encrypted and hidden from public view.
Gas-Efficient and Easy to Deploy: Built for the EVM, it is low-cost and straightforward to integrate into apps, games, or payment systems.
Auditability Without Exposure: Authorized parties, such as regulators or compliance teams, can still verify activity as needed without compromising user privacy.
No Extra Hardware or Overhead: You don’t need custom devices or specialized compute power. A wallet and a browser are all that’s required.
Works With Existing ERC20s: Projects can launch eERC20 as a new token or convert existing ERC20 tokens. There is no need to reinvent the wheel.
Scales Securely: With support for 254-bit integers, the standard is robust enough to handle enterprise-level token volumes while keeping performance smooth and secure.

Why Does It Matter to the Avalanche Community?

Privacy unlocks a whole new category of use cases for Avalanche. For institutions, eERC20 enables secure internal treasury operations, confidential payment flows, and even the tokenization of real-world assets without leaking sensitive data to the public.

For DAOs or startups, privacy is also key. eERC20 enables the handling of team payments or contributor grants without exposing sensitive salary or budget information to the entire network. That means more operational control without giving up the benefits of decentralization.

This upgrade enables Avalanche to expand into new areas while maintaining its core strengths: high performance, flexibility, and composability.

As Nicholas Mussallem, CEO of AvaCloud, puts it,

“eERC20 represents a major step forward in blockchain privacy.”

And this isn’t just theoretical. Projects are already implementing eERC20.

Real-World Example: eKET

A recent example of eERC20 in use comes from YellowCatDao, creator of KET, a memecoin project exploring encrypted token mechanics. They have implemented eKET, an encrypted version of their token, using AvaCloud’s eERC20 standard to test privacy features in a live setting.

Here’s how it works:

Users generate a decryption key in-browser.
They complete a one-time on-chain registration.
From there, they can convert regular $KET into encrypted $eKET and back again.
Transfers of $eKET are fully private. Amounts and balances are shielded using zero-knowledge proofs.
Recipients must also be registered, maintaining a permissioned layer of privacy.

This is a solid example of how even meme projects can explore serious privacy tooling, thanks to the accessibility of the eERC20 standard.

You can read more about how it works in their official docs.