Confidential balances: Enhancing privacy in Solana.

In April, Solana expanded specialized extensions originally developed under the Token2022 program. This latest achievement, renamed Confidential Balances, raises the level of confidentiality that users can access beyond the previous structure of Confidential Transfers.

While the previous set of extensions allowed asset managers to hide certain information from the public eye, Confidential Balances offers a set of cryptographically enhanced extensions.

"It builds on the earlier Confidential Transfers feature and uses zero-knowledge proofs along with homomorphic encryption to hide transaction details from the public while still allowing on-chain verification. Confidential Balances allows hiding transaction amounts while wallet addresses remain visible. It also supports hiding transaction fees using the same encryption methods and enables the creation and burning of tokens without disclosing changes in supply," Zhang told BeInCrypto.

These features enhance the privacy of on-chain transactions while remaining compliant with regulatory requirements. The update also provides token issuers with a new set of functionalities.

"An optional feature called the auditor key allows designated entities, such as regulatory bodies or compliance teams, to decrypt transaction data when necessary. Token issuers can configure different levels of privacy, from completely public to entirely confidential, allowing for flexible use across various applications, whether they require opt-in or default privacy settings," added Zhang.

He also anticipates that Solana will attract a larger number of users by balancing enhanced privacy features with compliance standards.