If we look back over the past decade, the narrative of blockchain privacy has been continuously reshaped. In the first cycle (2014–2017), privacy was mostly understood as the anonymity of value transfer, with Monero and Dash becoming synonymous with extreme privacy; in the second cycle (2018–2021), zero-knowledge proofs saw theoretical and engineering breakthroughs, but the industry's attention primarily shifted to scalability and performance, with privacy capabilities often existing as ancillary modules; until the third cycle (2022–2025), under the backdrop of enhanced on-chain compliance, significant improvements in monitoring capabilities, and the full entry of stablecoins and institutional funds, privacy was once again recognized as a fundamental condition for financial and business operations, rather than a marginal demand. Privacy issues have not disappeared; they have merely been obscured by different narratives at different stages.
The privacy revival in 2025 is not driven by a resurgence of ideology but is directly triggered by real-world friction. As stablecoins, DeFi, perpetual contracts, and RWA gradually scale, fully transparent public ledgers begin to expose structural risks in practical business: trading strategies are easily analyzed in advance, fund allocation may leak competitive signals, and on-chain behaviors of enterprises and institutions are continuously profiled. Against this backdrop, the advancement of global regulatory frameworks compresses the operational space of 'fully non-traceable assets' on one hand, while objectively strengthening the demand for financial infrastructure that is verifiable but does not publicly disclose details, defaults to privacy but can be compliant with disclosure. This dual push forms the realistic foundation for the gradual differentiation of privacy assets and highly transparent assets in 2025.
However, it is important to emphasize that the privacy track itself also faces multiple unresolved challenges. On a technical level, solutions like ZK, FHE, and MPC still have significant trade-offs between performance, development complexity, and composability; the stronger the privacy, the higher the system complexity and usage threshold often becomes. On an architectural level, privacy mechanisms can easily lead to liquidity fragmentation and insufficient observability, increasing the difficulty of risk management and system governance; on a compliance level, different jurisdictions have significant differences in defining 'anonymity-enhancing features,' and long-term policy uncertainty still exists. This means that privacy is not a one-way linear evolutionary competitive track, but rather a complex path that requires continuous calibration between engineering, economics, and institutions.
The key to this round of change lies not in a specific privacy chain or a certain cryptographic technology, but in the migration of privacy functionality: from 'certain assets possessing privacy' to 'whether the system supports a privacy state.' Whether it is hidden orders, batch processing execution, auditable concealed addresses, or selectively disclosed fund pools, privacy begins to be embedded in transactions, settlements, governance, and the execution of strategies themselves. With technological advancements, privacy is no longer a selling point of isolated networks but rather a fundamental constraint for the normal operation of various Web3 systems.
Therefore, the real question we need to discuss is whether Web3 can rebuild privacy capabilities while maintaining composability and compliance. In the short term, privacy will still exist in the form of value-added services, professional tools, and high-end features; but from a ten-year perspective, mainstream systems will inevitably move towards a structure of 'default privacy + regulatory compliance,' just like HTTPS for the internet. Privacy will not revert to an early single notion, nor will it disappear outside mainstream systems, but is more likely to evolve into an initial and foundational attribute of Web3 infrastructure. 2025 is not the endpoint of privacy, but rather a historical turning point for it moving from the margins to the foundation.