The word “privacy” comes naturally to us in every discussion concerning data, AI, and more. Crypto is known for its transparency on the blockchain. Everything was either transparent or hidden. For years, the industry tried to maintain the binary of Decentralized Finance (DeFi)—both transparency and privacy.
Co-founder and CEO of the TEN protocol-Obscuro Labs, Gavin Thomas, participated in a discussion to further explore these topics, offering his perspectives on DeFi privacy and data minimization.
The TEN protocol, formerly known as Obscuro, is a Layer 2 roll-up for Ethereum that uses Trusted Execution Environments (TEE) for ensuring privacy and confidentiality of smart contracts. They give their developers the choice to choose what data to keep private and what to make public.
TEEs function as hidden components in the ecosystem. On blockchain, TEEs act as a bridge between the transparency of public ledgers and the privacy required for real-world use. It allows for private smart contracts, secure key management, and even remote attestations. They are much faster and easier to use for complex tasks.
“TEN is about restoring something blockchains accidentally remove,” Gavin shared in a previous interview with AltCoinDesk.
Is data minimization the future of DeFi privacy?
With the mainstream adoption of blockchain, the builders are demanding a level of granularity in how they build for privacy while meeting the regulatory frameworks in the ecosystem.
Gavin had previously argued that DeFi privacy is shifting from “anonymity” to “data minimization.” Upon discussion, he primarily called out three factors contributing to it: market pressure, regulation, and cryptographic maturity.
Here is how he sees it: “As a trivial analogue, let’s consider learning to juggle: initially it is enough to simply keep three balls in the air; that’s basic all-or-nothing privacy. But as you hone your skill, you want to be more impressive. So you add two more balls. Then you change from balls to clubs. Then from clubs to swords. Eventually you’re juggling with torches. At each stage, you become more capable and more impressive.”
DeFi privacy began with crude privacy and now looks for capability and impressive performance. He added that top-quality privacy platforms will eventually want to appeal to the new wave of Web3 use cases related to institutions, enterprises, and neobanks.
Once the core is set, these sectors look for enhanced performances with richer experiences in terms of programmable privacy, access control, private and public states, institutional-grade cryptography, and even regulator-friendly auditing.
Privacy for regulators and institutions
Privacy to regulators can be called the “enabler for auditability and robust risk management.” Regulators and institutions are well versed with privacy in traditional finance.
He points to traditional finance as the proof, such as the Emirates Interbank Offered Rate (EIBOR). They are the benchmark interest rate for lending between banks within the UAE, set daily by the Central Bank of the UAE based on rates set by the panel of banks.
However, these submissions are confidential and “absolutely private” to remove the risks of collusion and manipulation.
The controversial view of Vitalik
Vitalik Buterin’s recent statement that Ethereum’s early transparency bias was a “limitation of early cryptography rather than a core value” signaled a major shift for the ecosystem. For many, “that sounded a bit like a U-turn,” but for the TEN Protocol, it validated their initial vision.
Gavin notes that workable cryptographic solutions have existed for years. Ethereum’s design assumptions are indeed changing to remain relevant. “Putting privacy front and center of Ethereum’s future is logical, and indeed this is the gap TEN Protocol was designed to fill,” he says. They have been focused on delivering one vision: providing programmable privacy for Ethereum.
Gavin says, “Simply because TEEs work.”
While other protocols stick to zero-proof (ZK) knowledge and MPC-based approaches, TEN operates on TEEs. TEN Protocol was designed with two underlying principles: it should be easy to build and easy to use. TEN Protocol’s design prioritizes a low-friction experience for both builders and users.
Using TEEs, we were able to run the entire EVM within the TEE’s secure enclave, which means TEN does not deliver EVM compatibility or equivalence; TEN delivers the actual EVM, period.
Gavin Thomas, CEO & Co-founder ofTEN Protocol
One of the overlooked features of TEEs, according to Gavin, is attestation. This feature ensures the ability to prove that the code running inside the enclave is exactly the code that was intended to run. This means we can guarantee the confidential computations aren’t just private but verifiable.
The Real Failure of Early Privacy: Poor UX
Reflecting on the early days of privacy platforms, Gavin clarifies that the failure was not the ideology – Eric Hughes’s 1993 Cypherpunk’s Manifesto is still widely supported—nor was it a lack of “selective disclosure.” The problem was execution.
The ideology influenced the design of early privacy platforms and encouraged selective disclosure. Tools and projects used narrow approaches to achieve secrecy but not privacy, including mixers like Tornado Cash, which found there was no fidelity to the level of privacy.
“It was all or nothing. So if there was a failure, it was not a lack of selective disclosure but rather the same fundamentals that plague Web3 even today: poor developer and user experiences,” Gavin stated.
TEN Protocol’s roadmap for the future of Web3
When inquired about the next phase of the roadmap for the TEN protocol, Gavin says that it is to inevitably evolve as the ecosystem matures. “Five years is a long horizon in Web3,” he added.
At present, they focus on leveraging multiple TEE vendors. In parallel, they are also exploring how Fully Homomorphic Encryption (FHE) can complement or even substitute TEE-based approaches over time.
