Ethereum Mixer Tornado Cash Launches Major Upgrade as V3 Approaches

The privacy mixer is rolling out a number of new features and layer 2 functionality on Gnosis Chain.

AccessTimeIconDec 15, 2021 at 3:00 p.m. UTC
Updated May 11, 2023 at 6:12 p.m. UTC
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Popular Ethereum-based privacy mixer Tornado Cash just got a major upgrade as part of a transition to a highly anticipated v3.

Tornado Cash, a privacy tool for obfuscating the history of ether (ETH) transactions, announced on Wednesday the launch of Nova, a major upgrade that will take the protocol to sidechain Gnosis Chain, allow for variable deposits and withdrawals and enable privacy-preserving “shielded” transfer of funds deposited into the protocol’s pools.

The protocol currently accounts for over 150,000 ETH in its pools worth $580 million.

On-chain sleuths have been known to tie two accounts to one another based on deposit and withdrawal amounts, and as such the shielded withdrawals and partial withdrawals will help power users retain privacy.

“In Nova, the deposit amount doesn’t have to be equal to withdrawal amount,” said core contributor Roman Semenov. “But if a user deposits, say, 0.1337 ETH and then withdraws 0.1337 ETH it will be kinda obvious for everyone that it’s the same user.”

Additionally, the team envisions the shielded custody transfer as a broad-base upgrade to Ethereum transactions, in that xDai’s network lowers costs and the protocol protects privacy for the addresses involved and the quantities transferred. One of the oldest layer 1 alternatives, xDai is a popular Ethereum sidechain for developers.

“It’s a very convenient feature for private payments, anonymous donations and more,” said Semenov.

Gnosis Chain is the recent result of a merger between Gnosis and xDai, but Semenov says that the process won’t affect Nova’s rollout as “they are careful to not break any apps with migration.”

A press release provided to CoinDesk said that Nova is the first step towards Tornado Cash v3.

While the team declined to provide a timetable for v3′s release, they said it will include private NFT transfers, support for ERC-20 tokens and an overhaul to the project’s “anonymity mining” rewards structure.

UPDATE (Dec. 16, 0:50 UTC): Corrects references to Gnosis Chain.

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Andrew Thurman

Andrew Thurman was a tech reporter at CoinDesk with a focus on DeFi.


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