Crypto privacy tools hide what you do onchain, yet identifying info can still leak around this activity offchain. The good news, though, is that this weak spot is getting more attention around the industry lately.

For example, this week the team behind Zodl (the Zcash wallet formerly known as Zashi) started switching users over to its own wallet servers, which are designed so your IP and your wallet requests never end up in the same operator’s hands. It arrives with Zodl 3.20.0 and needs no extra setup.

— (@)

It’s an encouraging shift, to be sure. When I walked through Zashi’s private swaps a year ago, its built-in Tor client was one of the extras I listed. Handy, of course, but opt-in at the time. Zodl’s new setup makes network-level protection the starting point instead.

As such, let’s catch you up on the basics of this notable setup and also spotlight some of the other top industry efforts that are ramping up to curb metadata leakage.

Nice IP address you have there...

Mobile wallets are typically light wallets, meaning they don’t store a full copy of the blockchain. Instead, they lean on a server to fetch data and broadcast transactions, and that server can see your IP address, which data you asked for, and when you asked.

On Zcash, that role falls to lightwalletd servers, and even if your ZEC is fully shielded (i.e. encrypted onchain), those connection patterns can still give savvy watchers a sketch of who you are and what you’re up to.

This isn’t a hypothetical worry, as we’ve seen such onlookers before. Back in 2023, developer b10c documented an entity dubbed LinkingLion that kept tabs on which Bitcoin nodes announced new transactions first.

The implication? That special vantage point could have allowed that person or group to pin fresh BTC transactions to the IPs behind them. And if so, they may have had years of these insights, since LinkingLion showed signs of activity stretching back to 2018.

My grand point is that this sort of metadata tracking can be, and already has been, applied around crypto, privacy projects included (e.g. b10c spotted the same LinkingLion IP ranges connecting to Monero nodes, too).

What’s needed is a new paradigm for the plumbing around transactions, which is where Zodl’s wallet servers mark a step forward.

How Zodl’s new servers work

Previously, Zodl users who wanted their metadata covered had two choices, namely to turn on Tor or to take the server operator at their word.

Zodl’s freshly unveiled fix uses Oblivious HTTP (OHTTP), an IETF standard that splits one exchange across two parties so neither sees the full picture. The flow here is as follows:

1) Your wallet seals each request with encryption that only ZODL’s gateway server can open.

2) Next, the sealed request goes to a relay that Cloudflare or Fastly operates. The relay scrubs anything identifying from it and hands it onward, so it knows your IP address without ever reading your request.

3) ZODL’s gateway is then the only place the request gets unsealed, after which it goes on to lightwalletd. ZODL sees what you asked for, but the only address it ever sees is the relay’s.

Put simply, Cloudflare or Fastly learns who is asking, ZODL learns what is being asked, yet neither learns both.

It’s an interesting, practical system, in my opinion. Its open-source code also boasts a couple of other defensive mechanisms that stand out, like size padding and unmatchable logs.

Indeed, outgoing requests get padded up to fixed sizes (roughly 4 KB steps, with transaction broadcasts rounded up to 16 KB or more), and sensitive responses get the same treatment, so traffic size doesn’t readily give away what you fetched.

As for logs, they’re built so they can’t be matched up. The relay’s request IDs never land in ZODL’s logs in raw form. Instead, they’re stored as HMACs (i.e. keyed fingerprints) under a secret held only in memory, which disappears whenever the gateway restarts. This dynamic means nobody can later match ZODL’s logs against the relay’s.

This is all fresh code, mind you, and Zodl is phasing these servers in over the next several days, so they’re not live for all users yet. The big takeaway for now is that their arrival marks a departure from crypto’s reigning metadata status quo.

Trust doesn’t vanish

The crux here is that OHTTP only shields you so long as the relay operator and ZODL never team up. The relay also still sees when you connect and roughly how much data moves, although not what’s inside that data.

That said, one critic on the Zcash forum argued the launch framing oversells things, since Cloudflare and Fastly are both U.S. companies subject to legal requests, and warned that this system could lull users into complacency. In response, ZODL contributor y4ss accepted the core point, calling OHTTP “a better default, not a substitute for Tor or Nym against a state adversary.”

Fair enough, right. And as y4ss had noted earlier in the thread, if legal pressure on infra providers is part of your threat model, you could stack Zodl’s Tor option on top of this new system, such that the relay only ever witnesses a Tor exit rather than you.

The real win here is the default status, of course.

When Ethereum’s Kohaku wallet was introduced in October 2025, David Hoffman cheered a future where privacy comes built in and is “not an opt-in UX encumbrance.” Zodl has just shipped a version of this for network metadata, and since OHTTP adds only one relay hop, it’s light enough to leave on for everyone.

Who else is working here

Zodl’s move lands amid a broader push against metadata leaks in crypto, with multiple teams taking their own routes to the problem.

The heaviest-duty solutions we’ve seen, so to speak, are mixnets.

In short, a mixnet shuffles traffic through several relays, pads every packet to the same size, and sprinkles in decoy messages, so an observer can’t easily pair what enters with what exits.

Two Zcash wallets already carry a mixnet from Nym, a privacy network project, per the team’s September update. Zingo offers it as an on/off switch, while Zkool lets you toggle it on to reach any Zcash node. Nym says it’s in talks with the Zodl team, too. Last week at Devcon 8, Nym also unveiled an SDK aimed at bringing its mixnet to more wallets and dapps. The catch is speed, as all that mixing adds latency.

On Ethereum’s side of the ecosystem, we’ve seen the Ethereum Foundation’s Kohaku privacy wallet effort list IP and RPC leak protection among its goals from the start, and a new Kohaku command-line tool now sends everything except RPC calls through Tor by default (the Ethereum RPC itself stays on clearnet on the assumption that you’re running your own node).

Meanwhile, the EF’s anon-rpc proposal from June gives wallets a standard way to plug in an anonymizing network of their choice. Tor and Nym versions are already live on mainnet, and Privacy Pools’ v2 web app has adopted it. You just flip on the app’s “Connect with Tor” setting, and its RPC traffic will go through anon-rpc.

Notably, Flashbots has joined the fray too. Flashnet, unveiled in February, is a research design for anonymous transaction submission on Ethereum. The idea is that users will drop messages into random slots of a shared batch and then split them into secret pieces across a group of servers. Add the pieces up and the batch reappears, with no message tied to its sender. The goal is anonymity that dodges both Tor’s weaker protections and a mixnet’s lag, though there’s no live deployment or benchmarks just yet.

Privacy Apps Are Having Their Moment on Bankless

The app layer is where crypto privacy is heating up most right now. Here are 7 new releases you can try today.

www.bankless.com

In the same general ballpark, Bitcoin devs have worked to guard the moment of broadcasts. Back in April, Bitcoin Core 31.0 added an opt-in private broadcast option that sends the transactions you submit through your node only over Tor or I2P (another anonymity network), so recipients never learn your IP, and each transaction gets its own connection so two of yours can’t be tied together.

That sort of mechanism goes straight at the type of watching the aforementioned LinkingLion entity has relied on. It’s still being battle-tested, though. In June, devs disclosed a bug that could expose a BTC sender’s IP when a failed handshake made the node retry without Tor, a hole that was closed in 31.1.

The bottom line

So is OHTTP strong privacy?

Against a resourceful state adversary, not on its own, but that’s no secret. Yet defaults reach the most users, and shielding every Zodl user’s IP from their own wallet provider, with zero setup, raises the privacy floor across the board.

There’s an intriguing wrinkle to watch here, though. The EF’s anon-rpc post treats wallets’ reliance on cloud-backed gateways, Cloudflare included, as a weak point, since those gateways can watch requests and refuse to serve them. Zodl, conversely, uses Cloudflare as half of its privacy split.

In fairness, these designs guard against different things: OHTTP limits what any one company learns, while anon-rpc also worries about who can cut you off, and Zodl still lets you switch to community servers in its Advanced Settings. Even still, if crypto’s privacy defaults all start leaning on the same few infra giants, that’s a dependency vector to consider.

We’ll have to see whether other wallets follow Zodl’s lead here, though the industry’s direction of travel seems clear. The privacy fight has expanded to the network layer, which is arguably where it’s needed most right now.