Aug 27, 2026 · 52 min
Ethereum privacy moves from research problem to institutional imperative
Ethereum Privacy for Institutions | Mo Jalil and Oskar Thoren
Institutional adoption depends on making on-chain activity confidential enough for regulated finance while preserving auditability, compliance, and connections to public DeFi.
- 1Ethereum’s public-by-default architecture remains a central barrier for banks, asset managers, and compliant on-chain products.
- 2Many institutional privacy applications now require production engineering, integration, and reusable infrastructure more than fundamental research.
- 3Selective disclosure and zero-knowledge proofs can protect transactions while preserving auditability, aggregate reporting, and public accountability.
Don't miss
Mo Jalil and Oskar Thoren explain how selective disclosure and zero-knowledge proofs could preserve public accountability while shielding individual institutional transactions.
The brief
ETH Systems co-founders Mo Jalil and Oskar Thoren argue that Ethereum’s public-by-default design still blocks institutions that need confidentiality, compliance, and operational control.
Their diagnosis is shifting from research to execution: mature privacy techniques exist, but institutions still need production engineering, integration, and rigorous system design.
An anonymized confidential-payments case study shows why institutional deployments are bespoke and slow, while open-source components and generalization could turn them into scalable products.
The founders frame ETH Systems’ for-profit model as a way to fund sustained customer work that can also produce reusable infrastructure and public goods for Ethereum.
The episode’s central tension is privacy versus transparency; selective disclosure and zero-knowledge proofs offer a route to protect transactions without abandoning auditability.
What was said on this episode
26 statements · 18 positive · 5 negative · 3 neutral
Ethereum lacks built-in privacy despite functioning well as a neutral base layer.
“Ethereum is great sort of technology and works great as a credibly neutral base layer, but obviously it doesn't have privacy baked in.”
Listen at 0:35
Institutions need cryptography to combine Ethereum’s benefits with business control and compliance.
“But you can't get both without cryptography.”
Listen at 1:24
Organizations need privacy and cryptography to use public Ethereum.
“In order for any of these organizations to use public Ethereum, they needed privacy. They needed cryptography.”
Listen at 2:38
Institutional demand for privacy is very large.
“there's a massive, massive demand for privacy of institutions.”
Listen at 4:02
Ethereum has many privacy-related protocols, vendors, and solutions.
“the Ethereum ecosystem is extremely rich in terms of different protocols or vendors or various solutions that exist.”
Listen at 6:17
Existing privacy solutions do not yet satisfy all institutional constraints.
“some solutions we sort of know how to do, but then when it comes to specific constraints, I would say we are still, there's still a bit to go.”
Listen at 8:39
Many institutional privacy use cases are mainly engineering rather than research problems.
“it's... I think largely more of an engineering problem as opposed to like a research problem.”
Listen at 9:45
The confidential payment solution could scale to tens of millions of people.
“you can do it at scale. You can do it where you can affect tens of millions of people.”
Listen at 19:12
Institutional privacy markets may represent hundreds of millions or billions of dollars.
“each one of these markets, each one of these industries is freaking huge. We're talking about potentially hundreds of millions, if not billions of dollars.”
Listen at 22:29
Specific institutional work can produce reusable generalized solutions.
“you can create, generalized solutions that can be reusable for other people.”
Listen at 22:50
Addressing specific institutional requirements before generalizing has value.
“I think there's value in like actually going after the specifics and then generalizing after.”
Listen at 24:17
Forcing legacy organizations into crypto-native workflows may fail.
“trying to force them into doing it the other way might not work.”
Listen at 25:25
A for-profit structure is the cleanest sustainable funding model for their work.
“the most, I think, cleanest way to sustainably fund it is to do it as a for-profit entity.”
Listen at 26:33
Institutions often require open investigations and open source to trust privacy systems.
“a lot of these institutions, they actually ask for open investigations and open source in order to be able to trust the system.”
Listen at 28:56
ETH Systems aims to turn institutional learnings into mass-deployable scalable products.
“the goal definitely is to take some of these learnings and turn this into like scalable products that you can roll out in basically mass.”
Listen at 30:56
Many venture-scale institutional privacy businesses will emerge within 24 months.
“I'll make a prediction over the next 24 months, you're going to see a whole number of businesses pop up that are like that.”
Listen at 32:23
Most demand for institutional Ethereum privacy is arriving inbound.
“most of the demand has been inbound.”
Listen at 33:21
Demand for compliant institutional DeFi is extremely large.
“the demand is absolutely massive. Like it's huge.”
Listen at 33:44
Institutional integration with Ethereum will be a decades-long transition.
“that's like a decades-long transition that's happening all across the space. And it'll continue to happen.”
Listen at 37:07
Most financial infrastructure could be blockchain-based within seven years.
“in seven years, it's very realistic that the vast majority of financial infrastructure is going to be on a blockchain.”
Listen at 39:05
Privacy concerns controlling who can see information, when, and how.
“privacy really is who can see what, when, and how.”
Listen at 40:33
Selective disclosure can preserve transparency while protecting private information.
“you can definitely have a system where you sort of get transparency around the things that you want to be transparent and in privacy of the things you want to be private.”
Listen at 43:28
Morpho and Aave should collaborate on privacy adaptations for large institutional use cases.
“if you're Morpho, if you're Aave, we're already talking to some of them already, definitely talk to us because we'd love to be able to look at your products and see how we can kind of like... basically modify them in ways that would be suitable for very specific types of use cases that could be incredibly large.”
Listen at 46:24
Ethereum’s ecosystem does not adequately match institutional requirements.
“there's a massive, massive disconnect in terms of what the institutions are asking for and sort of what the ecosystem provides.”
Listen at 47:58
Ethereum can support institution-specific systems with cypherpunk-like properties.
“you can also build these other systems that sort of have similar properties, but may be designed under different constraints.”
Listen at 50:00
Privacy may become Ethereum’s largest growth unlock.
“It's probably going to be the biggest unlock for Ethereum specifically that I can think of.”
Listen at 51:04
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.