- With involvement from Buterin, the startup secured $6M in a seed fundraising round.
- Customers will have access to the Nocturne front end until June 30th to process withdrawals.
Closing down operations has been announced by Nocturne Labs, the Ethereum-native privacy protocol which has backing of notable figures in the cryptocurrency community, including Vitalik Buterin, co-founder of Ethereum.
No reason for the shutdown was provided by the firm. Private Ethereum accounts and transactions were the original goals of Nocturne. With involvement from Buterin, the startup secured $6 million in a seed fundraising round in October 2023, headed by Polychain Capital and Bain Capital Crypto.
In spite of the company’s plans to shut down, the notice states that customers will still have access to the Nocturne front end until June 30th to process withdrawals.
The total value locked (TVL) for Nocturne has decreased from over $455,000 on January 22, when the announcement of Nocturne v1’s termination was made, to over $129,000 as of this writing, according to DefiLlama statistics.
Ongoing Scrutiny
Since the US government prohibited the crypto mixing protocol Tornado Cash in August 2022, initiatives focusing on privacy have been under more scrutiny.
However, Vitalik Buterin, co-founder of Ethereum, has been an outspoken supporter of transactions that prioritize user privacy. There has been a shift in the crypto community’s discourse on privacy on the Ethereum blockchain. At its heart, the dispute is about whether or not Ethereum, as a layer of blockchain technology essential to the network, should provide transaction privacy by default.
Vitalik Buterin draws parallels between the Transmission Control Protocol (TCP) and his position on default transaction privacy. He draws an analogy between Ethereum’s protocol and TCP, saying that the former uses plain text while the latter passes encryption responsibilities to higher levels. While maintaining a strong foundation layer, Buterin argues that Ethereum might take a similar approach, delegating encryption responsibilities to higher levels.
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