Solana Introduces New Privacy Feature: Confidential Balances
On April 9, 2025, Solana developers announced the launch of a new privacy feature called Confidential Balances.
This feature is designed to enhance user privacy in transactions on the Solana network while remaining compliant with existing regulations.
Evolution from Confidential Transfers
Quoting information from Coinvestasi media, confidential Balances is an advancement of the previous feature, Confidential Transfers, which was introduced through Solana’s Token2022 program.
With this technology, token issuers can now conceal sensitive transaction details—such as the amount of tokens transferred, minted, or burned—using homomorphic encryption and zero-knowledge proofs (ZKP).
Key Components of Confidential Balances
The Confidential Balances feature includes several essential extensions:
- Confidential Transfers: Allows token transfers with encrypted amounts, preserving transaction value confidentiality.
- Confidential Transfer Fees: Hides the amount of transaction fees applied.
- Confidential Mint and Burn: Conceals the number of tokens minted or burned in a transaction.
With these features, transaction validation still occurs on the blockchain without exposing sensitive information to the public.
Implementation and Developer Support
The initial implementation of Confidential Balances is supported by a Rust-based backend, enabling Wallet-as-a-Service providers to manage encryption processes and generate cryptographic proofs off-chain.
Although current wallet support is still limited, a JavaScript-based ZKP library is expected to be released soon, allowing browser and mobile wallets to locally generate and verify cryptographic proofs.
Auditor Key Feature for Regulatory Compliance
Solana also introduced the auditor key, an optional feature that allows institutions or regulators to access certain data from private transactions without disclosing it to the public.
With the auditor key, authorized parties can access cryptographic proofs related to activities such as the number of tokens transferred, minted, or burned—without compromising overall user privacy.
This approach enables projects to fulfill reporting and auditability requirements in accordance with regulations while still offering privacy to users.
Commitment to Privacy and Transparency
With the launch of Confidential Balances, Solana reaffirms its commitment to providing privacy solutions that are regulatory-compliant.
This feature is expected to increase trust from both users and institutions in the Solana ecosystem, and to drive broader adoption across various decentralized applications.
