XRPL Foundation Exec Reacts to Major XRP Privacy Proposal Following ZEC Crash

• XRPL’s XLS-0096 proposal introduces confidential transfers with supply transparency.
• Zcash plunged 46% following disclosure of a longstanding Orchard vulnerability.
• Selective disclosure features could support institutional compliance and adoption.

XRPL Foundation community lead Vet has drawn attention to a new XRP Ledger privacy proposal as concerns surrounding privacy-focused blockchain networks continue to grow. According to Vet, amendment XLS-0096 introduces a confidentiality framework designed to protect transaction data while maintaining transparency over token issuance and supply verification.

The update emerged as Zcash faced mounting pressure following the disclosure of a critical vulnerability within its Orchard pool. Reports indicated that the flaw had existed since May 2022 without detection, raising concerns about potential hidden inflation risks across the network. Consequently, investor confidence deteriorated rapidly, sending ZEC down 46% within a single day. The decline also prompted several major holders, including Arthur Hayes, to exit their positions.

According to Vet, the proposed XLS-0096 amendment introduces Confidential Transfers for Multi-Purpose Tokens on the XRP Ledger. Rather than pursuing complete anonymity, the proposal focuses on verifiable confidentiality, allowing privacy protections without sacrificing visibility into the overall token supply.

Also Read: XRP Crash Raises Panic – Here’s Why the Price is Falling Today

XRP Ledger Proposal Focuses on Transparency and Confidentiality

According to information shared by Vet, the amendment uses EC-ElGamal homomorphic encryption and zero-knowledge proofs to conceal balances and transaction amounts from public observers. However, validators would continue monitoring the total amount of tokens circulating on the network. As a result, the system allows participants to verify that outstanding supply never exceeds authorized issuance limits. This mechanism seeks to eliminate the possibility of undetected token creation, which became a central concern following Zcash’s recent security issue.

Additionally, the proposal incorporates compact sigma protocols and range proofs to validate transactions efficiently. These cryptographic tools also strengthen protection against increasingly sophisticated analysis techniques. Another feature highlighted by Vet involves a split-balance wallet structure. Under this design, wallets contain a spending balance and a separate Inbox for incoming transactions. Consequently, users can avoid transaction failures that might occur when zero-knowledge proofs become outdated.

According to Vet, the proposal includes selective disclosure capabilities and view keys that support regulatory reporting requirements. These features allow institutions to provide transaction data to regulators while maintaining confidentiality over commercially sensitive information. Moreover, the framework could appeal to businesses seeking privacy protections without compromising compliance obligations. This balance between confidentiality and regulatory transparency remains a key objective of the amendment.

Foundation for Future XRP Privacy Features

At launch, XLS-0096 is designed for Multi-Purpose Tokens, including stablecoins and tokenized assets operating on XRPL. Nevertheless, the architecture creates a technical foundation that could support broader privacy functionality across the ecosystem in the future.

According to the proposal’s authors, implementing confidentiality features at the XRPL level establishes the infrastructure needed for potential expansion beyond tokenized assets. Therefore, the amendment has become a notable development for the XRP community as discussions surrounding blockchain privacy continue to evolve.

While Zcash developers work to address the Orchard vulnerability and restore confidence in the network, XRPL contributors are advancing a privacy framework centered on verifiable confidentiality. According to Vet, XLS-0096 could provide stronger privacy protections while preserving transparency, offering a different approach to blockchain privacy within the XRP Ledger ecosystem.

Also Read: Major U.S. Banks Prepare Shared Tokenized Deposit Network for 2027 Launch

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