Rayls launches Enygma for private transactions on Ethereum

Rayls has announced the launch of Enygma, a privacy-focused framework for Ethereum and EVM-compatible blockchains.

Enygma is positioned as a compliance-ready protocol that implements confidential transactions, shielded asset swaps, and privacy at the transaction layer on Ethereum. According to Rayls, this is the first live operational solution that aligns with Ethereum's "Maximally Simple Privacy" goals.

The framework brings together zero-knowledge proofs, homomorphic encryption, and an optional auditor view, aiming to address concerns from both decentralised and traditional financial sectors about the lack of privacy solutions that also enable compliance with regulatory requirements.

Rayls' Enygma operates in tandem with the ongoing development efforts within the Ethereum community focused on enhancing network privacy. The protocol claims a level of compatibility with existing Ethereum infrastructure, removing the need to deploy bespoke privacy chains or use specialised wallets. This plug-in compatibility is intended to make it feasible for institutions, decentralised applications (dApps), and DeFi users to close privacy gaps without altering their technical stack.

The launch timing comes as privacy remains a topic of discussion within the broader blockchain ecosystem, particularly for institutions seeking to participate in on-chain finance while meeting regulatory standards. Rayls highlights its experience working with the Central Bank of Brazil's Drex central bank digital currency (CBDC) development programme as foundational to the design of Enygma.

Marcos Viriato, Chief Executive Officer of Parfin, the developers behind Rayls, said, "Rayls is built so people can transact in private. Privacy is non-negotiable, particularly when it comes to Banks and financial institutions in a regulatory environment. With Enygma, the industry now has a proof point for how privacy, programmability, and compliance can work together at scale."

Enygma leverages a combination of zero-knowledge proofs and homomorphic encryption to enable private transactions and shielded balances for Ethereum's asset standards, including ERC-20, ERC-721, and ERC-1155. This approach differs from prior privacy solutions, such as off-chain mixers or protocols focused on specific privacy wallets, as it embeds privacy at the transaction layer itself.

The framework also introduces an optional compliance mechanism by allowing institutions or dApps to appoint an independent auditor. Using Enygma's so-called "God View" feature, the auditor can access encrypted transaction data for regulatory oversight, while the privacy of the network as a whole is preserved.

The Enygma architecture is designed around four goals under discussion within the Ethereum community: default private payments for users, anonymisation of cross-application activity, encrypted on-chain data queries, and network-level anonymity that removes the obligation to utilise customised privacy wallets.

Rayls asserts that Enygma demonstrates these features in a live environment, arguing that this reflects the progression of Ethereum's privacy ecosystem and is relevant for regulated decentralised finance and on-chain applications.

The company has stated plans to open source both Enygma and the Rayls Privacy Node infrastructure later this year. This would provide developers and institutions the ability to implement Enygma's features in their networks and products.

Rayls is also working with the Ethereum community on additional integrations, including wallet support, bridging infrastructure for private assets, and further support for privacy-focused smart contract techniques.