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Author: Bradley Peak, Source: Cointelegraph, Compiler: Shaw Bitcoin Vision
Ethereum’s privacy paradox
When Vitalik Buterin took the stage to demonstrate Kohaku at Devcon 2025, he bluntly summed up the current state of Ethereum.The network has strong security and privacy research and solid Layer-1 security mechanisms.But it still doesn’t “get through the last mile,” which is the wallets and apps users actually use.
In theory, Ethereum has been leading the way for the past decade.Elliptic curve precompilation in 2018 opened the door to zero-knowledge succinct non-interactive knowledge arguments (zk-SNARKs) and spawned privacy tools like Tornado Cash and Railgun.The DAO hack of 2016 prompted rigorous auditing across the ecosystem, driving demand for safe and reliable wallets like Gnosis Safe, and turning multisig from a niche concept to a standard practice.
However, in 2025, it still feels clunky for everyday private use.People need to remember extra mnemonic phrases, install dedicated wallets, hope the public broadcast doesn’t glitch, and often fall back on centralized exchanges because they are too complex.
Kohaku is the solution for Ethereum.
Why will privacy issues become a focus again in 2025?
So why is Ethereum again making privacy a core focus rather than a feature just for power users?
In his April article “Why I Support Privacy,” Vitalik Buterin described privacy as a unified combination of freedom, order, and progress:
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This is freedom because people need space to move without having to worry about their every move being recorded and judged.
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Order exists because many social and economic systems silently rely on the fact that not everyone sees everything.
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This is progress because we want to use data for medical, scientific and financial purposes rather than turning everyday life into a permanent surveillance record.
At the same time, life on the chain is more open and transparent than ever before, and the stakes are higher.There is growing overlap between real-world assets, larger decentralized finance (DeFi) positions, and public identities.Transparency is important, but it also means that your account balances, donations and counterparty information can be tracked with just a few clicks.
Kohaku looks at exactly this: Ethereum already has the cryptography needed to enable privacy, but now it needs a way to make this privacy feature safe, usable, and acceptable in a world that values regulation.
What is Kohaku explained in easy to understand terms?
Kohaku can be understood as Ethereum’s new privacy and security toolkit for wallets.
For developers, the Ethereum Foundation provides an open source framework that includes a modular software development kit (SDK) and a reference wallet.The SDK provides reusable components for private sending, more secure key management and recovery, and risk-based transaction controls so teams don’t have to build the entire privacy technology stack from scratch.
For users, the first version is a browser extension wallet for advanced users, built on top of Ambire.It supports private and public transactions, has independent accounts for each decentralized application (DApp), uses peer-to-peer broadcasting rather than centralized relays, and provides tools to hide Internet Protocol (IP) addresses and other metadata when possible.
Kohaku’s underlying architecture integrates seamlessly with existing Ethereum privacy tools such as Railgun and Privacy Pools, rather than reinventing the wheel to develop a new mixer or L2 network.This allows Kohaku to focus on what’s really missing: a unified wallet architecture with privacy, recovery, and security built in from the start, rather than being added incrementally as experimental add-ons.
How Kohaku works
At its core, Kohaku is less of a “big app” and more of a bunch of “Lego bricks” for building a private, more secure wallet.
Wallet architecture
This SDK defines how a Kohaku-style wallet should handle keys, transactions, and recovery from the start.Rather than a single master key, it is designed with multiple keys with different roles, a risk-based approval mechanism, and a recovery process that does not rely on a single mnemonic phrase written down on paper.
A transfer of $100,000 triggers additional review and confirmation procedures, while a transfer of $10 does not require these procedures.This is exactly the risk-based capital access mechanism that Vitalik Buterin has been promoting.
Voluntary protective measures
Kohaku doesn’t keep all its transactions hidden.It allows the wallet to provide both public and private key modes.After selecting private key mode, the wallet can be routed through protocols such as Railgun or Privacy Pools, generating new, unlinkable payment addresses and minimizing the on-chain footprint.Tools such as association lists are built into the design so that the team can stop obvious illicit financial flows without stripping other users of their privacy.
online privacy
Finally, the roadmap covers not only writing data on-chain, but also reading and network privacy aspects.Kohaku is designed to plug into hybrid networks to hide metadata at the IP level, and over time plug into zero-knowledge supported browsers or remote procedure call (RPC) schemes, ensuring that even checking balances or reading decentralized application data does not quietly reveal user identities and actions.
Kohaku and Ethereum’s 2025 Privacy Transformation
Kohaku is important because it solves a problem that Ethereum has struggled with for years: the level of real user interaction with the blockchain.
Over the years, research teams have continued to introduce faster proofs, more efficient cryptographic primitives, and more secure contract models.But Buterin’s complaints are more practical: extra mnemonics, private pools not supporting multi-signatures, unreliable broadcasts, and cumbersome processes force users back to centralized exchanges because they are simpler.
By focusing on wallets, Kohaku gives L2 networks and DApps what they have been missing: a shared, privacy-focused infrastructure.In the past, each rollup or application needed to develop its own hidden address system, recovery process and large transfer warning mechanism, but Kohaku provides a set of patterns and codes that all applications can rely on.This is crucial in an ecosystem that increasingly exhibits an intertwined network of rollups rather than a single blockchain structure.
Since Kohaku originates from the core Ethereum ecosystem rather than a single startup wallet, it has the potential to become the reference model that other wallets need to reach or surpass.
Trade-offs, risks and open questions
Kohaku also forces Ethereum to face some tough issues.
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First, it is crucial to walk the line between maximum privacy and responsible privacy.Association lists, auditable privacy shields and risk-based controls are exactly what regulators and banks want to see.For some users, however, any selective privacy visibility or blacklisting may seem like the beginning of a slide into the abyss.The Kohaku incident will not end the debate, it will only make the contradiction more obvious.
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In addition, there are technical risks.Wallets that manage multiple keys, recovery paths, privacy switches, different broadcast options, and plugin modules have a greater attack surface than simple mnemonic sending wallets.This requires rigorous auditing and clear rules for upgrades and default settings.
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Then there’s the practical matter of user experience (UX).Frameworks can provide some good patterns, but they cannot force teams to deliver clear interfaces.All those extra features become more error-prone factors if users can’t differentiate between what’s sent privately and what’s sent publicly, what’s recoverable, and which approvals are critical.
New test cases for privacy by design
For the average user, the emergence of Kohaku is a sign that using Ethereum to operate privately no longer feels like a minor task.
The real test will be whether mainstream wallets will actually adopt these concepts: clear privacy and public models, simplifying the recovery process, increasing limits on large transfers, and reducing the risk of leaking all on-chain information with one click.If these concepts are implemented, privacy protection will become just a regular setting in your existing wallet.
For developers, Kohaku provides an infrastructure layer that relieves a lot of the heavy lifting.Instead of rebuilding the underlying mechanisms for privacy and security, they can rely on a shared toolkit to focus on the design and user experience of decentralized applications.
For institutions and regulators, this is a real-time experiment in privacy by design and an opportunity to test how far Ethereum can push confidentiality without giving up auditability or legal clarity.
