(v1) Effective privacy
This is an end-user guide for Light v1 (Mainnet).
I have a shielded balance -so now my on-chain privacy is completely protected?! Yes, but...While your on-chain privacy is perfectly private (your tx cannot be directly linked to your identity) there are a few (temporary) caveats that influence your 'effective' privacy:
- Shield your funds sometime before you use them for the first time. (We currently recommend a few hours to a few days)
- Shield a round number of funds, like 3 or 5 or 10 SOL, instead of just the exact amount you plan to use up a day later.
Here's why: when you unshield your tokens privately, the token transfer is still recorded on the public ledger. What can't be seen is where the payment is coming from. (for the ledger, it looks like it's coming from the Light Protocol smart contract). Now say you'd stack your shielded balance and then immediately use the same amount you shielded just a few minutes prior - people could still look at the in and outflows of the smart contract and try to connect the dots...
- 1.1. Your on-chain privacy is directly correlated to the size of the anonymity set at the time of unshielding.
- 2.2. While shielded assets are private by default when you shield and unshield, transactions happen in clear text on regular Solana addresses. So if you unshield before there are many shielding transactions from other users, your shielding address and 'unshielded' burner wallået may be identifiable.
We'll publish a detailed post about this. Until then:
- Preferably unshield denominations similar to your peers and unshielded amount << shielding amount
Light does not provide off-chain privacy out of the box. You still share IP/networking-layer information with various providers when using Light. On-chain privacy should be sufficient for most, but if you prefer off-chain privacy, you must use other tools, i.e., Tor.
- Amount recommendations for what likely are sufficiently private amounts to unshield.
- A privacy flag. It can either be "Good", "Moderate", or "bad".
It aggregates recent protocol traffic (your own and other users' shields and unshields) and applies rules according to what we described above. Including:
- Similarity to other unshields, and your own shields
- Number of other unique users' shields relative to your own usage
- Ratios of amount / TVL and amount / your shielded balance
All calculations for this happen client-side, on your computer. We don't collect or store data that's not on-chain.
- Note that these are not guarantees for rock-solid privacy but rather rough indicators! Use your judgment, and check the chain for recent traffic when in doubt.