Solana In The Spotlight: SOL Update Brings ‘Confidential Transfers’ for Boosted User Privacy

Solana is making headlines again, thanks to the latest update. Check out what’s coming for SOL these days regarding transfers.

Solana, an Ethereum (ETH) competitor, has released an update (v1.16) that enables confidential transfers for its token standard.

This update was approved by a supermajority of Solana’s validators after almost ten months of development and testing.

The update includes the roll-out of confidential transfers for SPL tokens, which are Solana network tokens similar to ERC-20 tokens on Ethereum.

Confidential transfers will use zero-knowledge (ZK) proofs to encrypt transaction amounts and balance of SPL tokens, as per a recent press release from Helius, a Solana developer platform.

Helius explained the following:

“The primary focus of this feature is to improve user privacy through a renowned emphasis on confidentiality rather than anonymity.”

The notes continued and stated that confidential transfers leverage Twisted ElGamal Encryption for mathematical operations on the encrypted amounts.

“These transfers are validated using Sigma Protocols, a specialized category of zero-knowledge proofs where one party (the prover) can demonstrate to another party (the verifier) that they know of a certain secret without actually disclosing the secret itself,” the notes concluded.

According to the official data coming from CMC, Solana’s native token, SOL, is trading at $22.19 at the time of writing.

SOL is down nearly 6% in the past 24 hours and more than 4% in the past seven days.

Asset managers such as CoinShares, Grayscale, 21Shares, Bitwise, and ProShares have recorded inflows for digital-asset investment products for two consecutive weeks, totaling to $78 million, according to the latest report by CoinShares.

Solana and Bitcoin funds have led the way with Solana investment products experiencing its highest inflows since March 2022, adding $24 million.

James Butterfill, Head of Research at CoinShares, wrote that Solana is “asserting itself as the altcoin of choice” given the recent launch of ether futures ETF products.