Nym obtains a funding of $150,000 for the integration of its mixnet with Zcash

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Nym and Electric Coin Company have joined forces to integrate mixnet technology into Zcash, aiming to mitigate the potential disclosure of user metadata. 

The funding of $150,000, coming from the Zcash community, has greatly supported this integration effort.

Thanks to this collaboration, Zcash wallet developers can now integrate the powerful privacy features offered by Nym. Let’s see all the details below. 

Integration between Nym and Zcash: preventing user metadata loss

As anticipated, the privacy-focused project Nym is currently integrating its Mixnet technology into Zcash, in collaboration with the development organization Electric Coin Company of Zcash. 

The primary goal is to enhance privacy protection, addressing the risk of user metadata loss. The integration process involves incorporating Nym’s Mixnet into the Zcash light client libraries developed by Electric Coin Company. 

This will allow Zcash wallet developers to optionally implement the privacy features of the Mixnet. Nym has received a community grant of $150,000 from Zcash to support this effort.

Josh Swihart, CEO of Electric Coin Company, expressed enthusiasm about this initiative, stating the following: 

“I am extremely pleased to see Nym come to life on the Zcash network. Network-level privacy has been a missing piece since the beginning of Zcash.”

Nym’s approach to privacy protection

The Nym team has highlighted the widespread risk of metadata leaks in online interactions, presenting Mixnet as a solution to protect such data from possible surveillance activities.

Zcash, known for its optional privacy features through “auto-shielding”, distinguishes itself from cryptocurrencies like Bitcoin and Ethereum by making transaction tracking more difficult. 

However, Nym emphasizes that the metadata associated with user transactions remains traceable, even if the transactions are automatically shielded. 

This could allow an adversary to monitor the user’s portfolio activities, including details such as the IP address, over time.

Despite the existence of traditional privacy tools, such as VPN and Tor, Nym claims that its Mixnet solution offers a more comprehensive approach to protecting metadata privacy in cryptocurrency transactions.

Mixnet technology and privacy defense in the crypto ecosystem

As already mentioned, Nym’s Mixnet technology encrypts the data generated by users, dividing it into packets of uniform size. 

Subsequently, these packages are routed through a global network of mix nodes at random intervals. 

The addition of “cover” fake traffic during this process is aimed at making user information even more obscure, greatly complicating the possibility of identifying metadata patterns, as stated by Nym.

This strategy aligns Zcash with other cryptographic projects such as Monero, Aztec, and Near, which have previously collaborated with Nym on its Mixnet technology.

Recently, privacy-oriented cryptocurrencies, including Monero and Zcash, have faced the risk of being delisted from centralized exchanges due to regulatory pressures. In particular, Binance has already delisted Monero.

Meanwhile, Nym has explained that encrypting metadata through a product similar to a VPN is not subject to the same regulatory challenges. 

Harry Halpin, co-founder and CEO of Nym, stated the following:

“Exchanges are obviously not favorable to on-chain privacy and we hope that the issues can be resolved. Note that, since NYM is a transparent token that offers a service similar to a VPN, this is not a problem for the token itself.”

Finally, we remind you that Nym Technologies raised $13 million in a financing round in 2021, led by Andreessen Horowitz (a16z), with a valuation of $270 million.