Privacy is a polarizing topic for most people. Especially in Web3 with total transparency as a highly valued ecosystem characteristic, anything related to privacy or data protection is casually grouped together with any other privacy-adjacent project. The label of “privacy coin” is applied liberally. 

Haphazard categorizations are unhelpful, however, and distinguishing user-focused data protection networks from the “privacy” currencies used for unilateral asset transfers is important. Protocols like the Oasis Network play a key role in balancing productive privacy with selective transparency for a safer Web3, and the details matter for how these integrations happen. 

To better understand the taxonomy of privacy technology in Web3 and to explore why the Oasis Network is not a “privacy coin,” this article explains the feature sets of monetary assets purpose built for secret transactions compared to development platforms for integrating confidentiality into decentralized applications.

The Oasis Network’s token is not a privacy coin.

ROSE is the native token of the Oasis Network used for gas fees, staking, delegation and governance. But does it fit the label of “privacy coin?” 

The short answer is no. 

The long answer has a few components. First, the Oasis Network is a piece of Web3 infrastructure that supports the use and development of applications with various use cases and unique requirements for data confidentiality. Neither the Oasis Network nor its native token ROSE are just another “privacy” cryptocurrency built to offer secrecy traits for spending and unilateral asset transfers. 

Second, the ROSE token has no privacy features. All ROSE transactions can be tracked in the Oasis Explorer, and even on the confidential Sapphire runtime, metadata from encrypted transactions are clearly visible. What makes Oasis an industry leader is its native support for confidential smart contracts that can protect various data loads from unauthorized third parties.  

The Oasis Network is built to serve serious builders and billions of users who care about protecting their data from the egregiously irresponsible norms of Web2 companies. In fact, there is a reason that the Oasis Network is never mentioned alongside “privacy coins” in regulatory enforcement or exchange delisting announcements. Oasis brings Smart Privacy to all sectors of Web3 on a platform with customizable confidentiality that suits every use case for handling digital data.

So, what really is a privacy coin?

When properly applied, the “privacy coin” label usually refers to a type of cryptocurrency equipped with features that enhance anonymity and diminish traceability within digital transactions, similar to the privacy afforded by physical cash. Cryptocurrencies with privacy-enhancing features that boost anonymity and reduce traceability are the extent of these assets’ usefulness, however.

Privacy coins are built for anonymity in send-and-receive transactions only. When Web3 users make regular crypto transactions, these actions are not completely private. Every Bitcoin or Ether transaction is traceable to the previous transactions, for example. Privacy coins want to offer an alternative to this system, but these coins have raised concerns by various political and regulatory agencies around the world.

Privacy coins face more regulatory pressure now than ever in fact due to these concerns over their potential use for facilitating illicit activities. As a result, exchanges like Binance, OKX and others feel pressured to delist these “privacy” assets. But, this regulatory pressure often is created from false narratives. A 2020 report by the respected law firm Perkins Coie, for example, found that privacy coins do not pose more of an inherent risk to anti-money laundering operations than other cryptocurrencies. Their paper also detailed the benefits of privacy coins and suggested that their utility is much greater than their risks. Cryptocurrency analysis firm Chainalysis also explains the benefits of privacy coins here.

Participants in the digital data economy have a lot more valuable information to protect than simple transactions moving assets between two or more parties. This limited use case is important for some crypto natives, but it’s important to avoid clumping every “privacy” project into the same category as single-purpose assets like “privacy coins.” The Oasis Network, for example, is built to support flexible smart contracts that can service the needs of any developer anywhere on the spectrum of privacy and confidential computation. It is a simple category error to fit this type of network into the same grouping as a privacy coin as they exhibit distinct attributes and functionalities that differentiate one coin or network from another.

What is a Confidential Computing Platform? 

With technologies like the Sapphire runtime and its accompanying Oasis Privacy Layer (OPL) framework, the Oasis Network brings cutting edge confidentiality tools to any Web3 developer — even ones that don’t build directly on the Oasis Network. Importantly, the confidentiality built into the Oasis protocol is as robust as it is customizable. Flexible cross-chain confidentiality means builders and users can optimize for degrees of efficiency, compliance, secrecy — or all of the above — depending on their unique use case. In fact, fully compliant native confidentiality customizations are only possible on Oasis. 

In short, Oasis is redefining how developers think about integrating privacy by reshaping the confidentiality toolset available to them. Unlike “privacy coins,” which are limited to a binary privacy range and asset transfer-only uses, Oasis confidentiality is useful for almost any Web3 application. Here are some examples: 

• Private Onchain Prediction Feeds (See: Ocean Predictoor) 
• Decentralized, Confidential Onchain DEX (See: illumineX)
• Confidential Onchain Copy Trading (See: SmartWhales)
• MEV Protection (See more here.)
• Sealed Onchain Auctions (See: PixelRealm)
• Confidential Collectibles and NFT Data Protection (See: Crust and Rehide)
• Private Enterprise Blockchain Runtimes (See: deltaDAO)

Oasis differentiates itself from other privacy networks and technologies by optimizing for both efficiency and confidentiality simultaneously. Every dApp manages different amounts and types of user data, but every data load can be processed confidentially on Oasis in ways that protect users, achieve developer goals and allow for full operational compliance when necessary. Users and builders should not have to choose between jeopardizing their sensitive data without any privacy or seeking risky privacy solutions that could run afoul of applicable laws and regulations. The Oasis Network fixes this.

What is the future of privacy for Web3?

Digital privacy is a basic human right. The Oasis Network is built and contributed to by a vibrant, decentralized community of engineers and developers who believe this. Notably, many of the core contributors hold PhD degrees and are specialists in computer security and cryptography. By creating a spectrum of confidentiality with unlimited customizability, the Oasis Network redefines how developers think about integrating user-protecting privacy solutions and reshapes the norms for data protection in Web3. 

Because privacy in Web3 does matter. Routine “leaks” in Web2 are impossible in Web3 when everything is already publicly available on transparent-by-default networks. Oasis thinks differently about this. Transparency should be possible, but not the default. Confidentiality is essential for mainstream adoption and protecting basic digital rights. 

Every application of confidential technology must offer users the choice to balance privacy and transparency. Even more important is the necessity of respecting individual rights to data ownership against snooping third parties while remaining compliant with all applicable laws and regulations. Unlike single-use binary “privacy coin” assets, the Oasis Network accomplishes all of the above goals. The future of privacy in Web3 begins and ends with the customizable confidentiality of Oasis smart contracts.