Foundation targets institutions with new privacy framework

The Solana Foundation is making a new claim to large institutions: Privacy is a customizable feature, not a trade-off.

In a report released by the foundation on Monday, “Privacy on Solana: A holistic approach to the modern enterprise,” The organization believes that the next phase of cryptocurrency adoption will rely less on transparency and more on giving companies control over what they disclose and to whom.

This framework marks a shift in the early ethos of cryptocurrencies. Public blockchains have traditionally emphasized openness, making transactions visible and traceable even if users are represented only by wallet addresses. The report acknowledges that this “pseudonym” model, while fundamental, is insufficient for many real-world use cases. For example, financial institutions may need to prove that transactions occurred without exposing counterparties, while companies that process payroll must avoid publishing employee wages.

The pitch is based on a technical claim: Solana’s speed makes advanced privacy technology practical. The team believes that the network’s high throughput and low latency enable these methods to run at near-network speeds, opening the door to use cases such as crypto order books or private credit risk calculations.

But rather than offering a single privacy solution, the foundation presents privacy as a spectrum consisting of four different modes: pseudonymity, confidentiality, anonymity, and fully private systems.

Under the hood, pseudonyms obscure the identity behind a wallet address while making transaction data visible. Across the spectrum, confidentiality allows participants to remain known while encrypting sensitive information such as balances and transfer amounts.

Anonymity reverses this dynamic, hiding the identities of participants while allowing transaction data to remain visible. The remote end is a completely private system where identity and transaction data are shielded through techniques such as zero-knowledge proofs and multi-party computation.

The message is that no one privacy model fits everyone. “For businesses, privacy is a spectrum, not an on/off switch,” the report said.

What Solana attempts to do is bring all of these privacy options into one system. Rather than choosing just one approach, companies can mix and match tools as needed, such as hiding transaction amounts, proving something is valid without revealing details, or controlling who can access certain data.

In practice, this could mean executing trades without revealing order sizes, sharing risk data across banks without exposing personal balance sheets, or allowing users to demonstrate compliance without revealing personal information.

The report relies heavily on the idea that privacy and regulation can coexist. The team points to mechanisms such as “audit keys” that enable designated parties to decrypt transactions if needed. Other systems will allow wallets to demonstrate compliance status without revealing their identity. These features are a response to increasing regulatory scrutiny, particularly around anti-money laundering rules and financial regulation.

“Privacy is a market requirement,” the report said. “Customers expect it and applications require it. On Solana, you can choose the level of privacy, from encrypted balances to zero-knowledge anonymity to multi-party confidential computation. Each level is mapped to a compliance path, and each level can be combined with the broader ecosystem.”

Read more: Solana Foundation’s Liu: Focus on finance, not playing ‘bad luck’