The Solana Foundation is making a new proposition for large institutions: privacy as a customizable feature, not a trade-off.
In a report released Monday by the foundation, “Privacy at Solana: A full-spectrum approach to the modern business“ the organization argued that the next phase of crypto adoption will depend less on transparency alone and more on giving companies control over what they disclose — and to whom.
The framework marks a shift from crypto’s early ethos. Public blockchains have traditionally emphasized transparency, where transactions are visible and traceable, even if users are only represented by wallet addresses. The report acknowledged that this “pseudonymity” model, while basic, falls short for many real-world use cases. For example, financial institutions may need to prove that transactions have occurred without disclosing counterparties, while companies that process payroll need to avoid posting employee paychecks.
Beneath the pitch is a technical claim: that Solana’s speed makes advanced privacy techniques practical. The team argued that the network’s high throughput and low latency allow these methods to run at near-web speeds, opening the door to use cases such as encrypted order books or private credit risk calculations.
But instead of offering a single solution to privacy, the Foundation presented privacy as a spectrum composed of four different modes: pseudonymity, confidentiality, anonymity, and fully private systems.
At a basic level, pseudonymity keeps identities hidden behind wallet addresses while leaving transaction data visible. Moving along the spectrum, privacy allows participants to be known while encrypting sensitive information such as balances and transfer amounts.
Anonymity reverses that dynamic, hiding the identity of participants while keeping transaction data visible. At the far end are completely private systems where both identities and transaction data are shielded through techniques such as zero-knowledge proofs and multi-party computing.
The message is that no single privacy model fits everyone. “For businesses, privacy is a spectrum, not a switch,” the report said.
What Solana is trying to do is bring all these privacy options together in one system. Instead of choosing just one approach, companies can mix and match tools — like hiding transaction amounts, proving something is valid without revealing details, or controlling who can access certain data — depending on what they need.
In practice, this could mean executing trades without revealing order size, sharing risk data across banks without revealing individual balances, or allowing users to prove compliance without revealing personal information.
The report leans heavily on the idea that privacy and regulation can coexist. The team pointed to mechanisms such as “auditor keys,” which allow designated parties to decrypt transactions when required. Other systems would allow wallets to demonstrate compliance status without revealing identity. These features are designed in response to growing regulatory scrutiny, particularly around anti-money laundering rules and financial surveillance.
“Privacy is a market requirement,” the report said. “Customers expect it and applications demand it. At Solana, you choose your level of privacy, from encrypted balances to zero-knowledge anonymity to confidential multi-party data processing. Each level maps to a compliance path, and each level can be composed with the broader ecosystem.”
Read more: Solana Foundation’s Liu: Focus on finances, not gambling “mishaps”
