Recently, I bought several projects in the secondary market that surged 5 times, such as $hype and $blue. I kept buying higher, which brought me substantial profits.
This made me realize - the altcoin season may be coming soon.
From the altcoin season indicators, in the past 90 days, 67% of the top 50 tokens have outperformed Bitcoin. If the proportion reaches 75%, it indicates that the crypto world has officially entered altcoin season.
From the curve, the market made its first test from December 1 to 8, and after falling on December 9, the market entered an adjustment phase. Currently, the market is building momentum, and it is expected to complete adjustments soon, followed by the altcoin explosion season.
At this time, we should be well prepared: investigate in advance, stealthily accumulate at low points, and then wait for the opportunity.
In the world of altcoins, apart from DeFi, privacy projects are the most favored by capital and large holders. This track has been quietly rising, to the extent that many people are completely unaware of its existence. For example, Zcash has already surged 56% in the last 30 days.
So today, let's talk about why we should pay attention to the privacy track. This article will introduce the following aspects:
Why does a privacy track exist?
Comparison of Ten Privacy Projects
What innovations does Mystiko have?
What opportunities are there in Mystiko?
1. Why does a privacy track exist?
On-chain transparency is a double-edged sword; user transaction activities, balances, and so on are all transparent on-chain. Although the real entities behind on-chain accounts are anonymous, their transaction data is almost completely transparent. If your on-chain address happens to interact with platforms like CEX that require KYC, then all your on-chain assets are exposed. Even using DEXs like Uniswap, the exposure is the same.
Web3 is highly correlated with assets, and the high transparency on-chain presents a significant problem: if there is intent, people can easily track these transactions. A typical case is:
3AC once confidently publicized some addresses to prove their high strength in the crypto world;
However, unfortunately, they encountered the LUNA incident. During the LUNA incident, some people tracked 3AC's addresses, resulting in a massive influx of reverse operations, which accelerated 3AC's liquidation.
In addition, there was also the FTX incident. The FTX incident has intensified people's distrust of CEX. To rebuild market confidence, CEX must disclose its assets more transparently than before, but many users and institutions do not want their account balances to be made public.
At this time, the market needs privacy projects, whether to hide addresses or transactions; as long as they are not 'naked' on-chain, they can be.
So, when Monero and ZCash first came out, they gained favor from VCs, miners, and large holders. It wasn't until later when Tornado Cash was banned that people really realized the market needed more privacy projects to provide services.
Currently, the solutions on the market use zk-SNARKs to improve the privacy of encrypted assets, storing users' balances in Merkle trees or KZG commitments, which not only protects users' privacy but also effectively discloses the status of users' assets. Encrypted assets that adopt this solution are referred to as 'Privacy Tokens'. Since 2013, this type of privacy token includes:
Zcash (ZEC)
Verge (XVG)
Monero (XMR)
Dash (DASH)
Beam (BEAM)
Horizen (ZEN)
Bytecoin (BCN)
The crypto world advocates for new projects over old ones; finding new projects and those that haven't appreciated can increase investor win rates. Therefore, this article will not analyze those old privacy projects, but instead compare 10 representative projects.
2. Comparison of Ten Privacy Projects
Privacy projects are mainly created to meet users' demands for anonymity, generally used to protect data, addresses, transaction records, amounts, or documents. The privacy concept was first introduced by Monero, and in the 10 years since $xmr was launched, the token has increased by 8601%, creating enormous wealth for countless miners.
Inspired by Monero, developers have tried various methods to develop privacy coins over the past 10 years. A notable example is Zcash, which uses ZKP technology to hide transaction addresses, thereby concealing the sending and receiving parties of funds and protecting user privacy. In 2020, it was decided to allocate 20% of the ZEC network's mining rewards to the ZCash Foundation for the operation of the project. However, some participants were dissatisfied with this, leading them to create a forked chain, ZCL.
The discord within the Zcash community has brought great opportunities to the privacy sector. After developers left, many projects were created, with some representative ones being:
Currently, most solutions use ZKP technology to encrypt users' transaction information to protect user privacy.
In the past 30 days, the privacy sector has generally risen by 50%, with $mask and $xzk seeing increases of 35%. $mask belongs to social privacy, and this article mainly discusses infrastructure projects, so we will focus on Mystiko.
3. What innovations does Mystiko have?
Among many privacy projects, Tornado Cash was widely used globally until it was banned in August 2022.
The Tornado Cash mechanism is very simple; it uses a mixer model allowing users to deposit ETH, DAI, USDC, and other ERC-20 tokens and withdraw them from different other crypto addresses. Technically, it uses ZK technology to encrypt the wallet addresses of depositors and mixes them with other users' wallet addresses who have deposited the same token, making it difficult for outsiders to trace the funds' whereabouts.
Since Tornado Cash is deployed on Ethereum, BSC, Polygon, and Optimism Network, it meets the needs of most EVM addresses. This is very similar to the cross-chain privacy model, but it has the drawback of high gas fees. Even so, before being sanctioned, Tornado Cash had around $8 billion in transactions. This shows that there is substantial market demand for cross-chain privacy.
(1) Background of Mystiko
With strong market demand, Mystiko Network launched the Mystiko Protocol based on zk-snarks after two years of development, featuring plug-and-play functionality that can be integrated into almost all major cross-chain bridges in the Web3 ecosystem. This makes Mystiko one of the few cross-chain privacy projects currently available.
Such an innovative concept and market demand led Mystiko Network to raise $30 million in private placement financing in March 2024, led by Sequoia Capital, with participants including: Samsung Next, HashKey, Mirana, Signum, Coinlist, Naval Ravikant, Sandeep Nailwal, Gokul Rajaram, Tribe Capital, Morningstar Ventures, and other investors.
Let's take a look at how Mystiko specifically operates.
(2) Introduction to Mystiko
Mystiko Network is the ZK technology layer of Web3, providing privacy protocols and ZK software development kits to ensure scalability, compatibility, and permission privacy for projects using Layer 1, Layer 2, wallets, and cross-chain.
Ordinary users can manage and transfer their assets across complex blockchain technologies such as Ethereum, BSC, Polygon, Avalanche, Polkadot, Near, and Solana using Mystiko's one-click wallet, paying only a small gas fee.
Many people see this and may think that Mystiko Network is going to create an L1 or L2. It should be noted that Mystiko Network, as a privacy technology provider, is not a Layer 1 or Layer 2 platform and does not belong to any ecosystem. It is a comprehensive privacy technology service; any project requiring user privacy can integrate Mystiko into their protocol using Mystiko's SDK toolkit, which is the 'plug-and-play' functionality mentioned above.
Projects using Mystiko's privacy SDK toolkit include Camo Wallet (wallet), Cable (bridge), Ninja (payment), and Wizard (DEX).
Additionally, it also supports cross-chain communication protocols like LayerZero, Axelar, and Celer, providing toolkits to build completely anonymous cross-chain transfer products.
(3) What products does Mystiko Network have?
The most basic product of Mystiko Network is the Privacy SDK toolkit, which helps chains, bridges, wallets, and dApps integrate privacy with ZK technology.
The first project developed based on this technology is Camo Wallet. Users can store assets, trade, and conduct cross-chain transfers completely anonymously in this wallet. Thanks to the ZK-SNARK proof generated by Mystiko for each transaction, the Camo Wallet has a high level of anonymity and security.
In terms of compatibility, users can transfer or withdraw funds via Camo Wallet using public wallets like Metamask.
(4) What are the applications of Mystiko Network?
According to official information, Mystiko products can be applied in the following scenarios:
Cross-chain transfer: This is the core function of Mystiko, where users deposit assets on one chain and withdraw funds from another chain without exposing any transaction details.
MystikoPay: Completely on-chain payments, where no one can see users' payment histories. All payment history records are private, which is particularly useful for companies and merchants, preventing sensitive business income details from being exposed on-chain.
Secret Vault: Users can transfer assets to a completely secret and extremely secure address, ensuring complete privacy. Any wallet can provide such functionality for users by implementing the Mystiko Wallet SDK.
Private DEX: Users can trade on a private DEX just like on Uniswap while protecting users' financial privacy. DEXs can now add such functionality for users by implementing the Mystiko protocol.
(5) Project Data
From the data, the project supports over $272 million in transaction volume across 6 unique blockchains: Ethereum, BNB Chain, Polygon, Avalanche, Linea, and Base. It has generated over $5 million in fee income for hundreds of ZK-Rollup miners and relayers within the network.
Alright, that concludes the project information. The focus of this article is still below: can we make money?
4. What opportunities are there in Mystiko?
Mystiko is a benchmark for cross-chain privacy, with a total of 1 billion tokens for $XZK, a private placement price of $0.09, a public offering price of $0.15, and a listing price of $0.27.
Current market price is $0.03713, nearly three times lower than the private placement price.
FDV of $37.55 million is the smallest in market capitalization and the least appreciated token among the top ten privacy projects. Other privacy projects have already issued tokens two years ago and have at least completed one appreciation cycle. $XZK's TGE was on June 18, and the token price has not exceeded the private placement price after July. With such a long washout cycle, retail investors no longer hold much stock, and all airdrops have been fully distributed.
From on-chain data, it seems that large holders have been accumulating in the past week, with large holdings increasing by 0.09%. This may be waiting for favorable market news to come out, such as token burns or other incentive activities.
Currently ranked around 1100 in market capitalization, the token price is severely undervalued. With the arrival of altcoin season, the profit potential is enormous.
Similar to early-stage Chainlink, XZK is also developing steadily under difficult conditions. With strong partnerships and a reliable V2 SDK, it can achieve huge value when the market recovers.
Historically, privacy coins like ZCash and XZK have faced regulatory scrutiny. However, recent victories of Tornado Cash against OFAC and Trump's cryptocurrency-friendly policies may significantly boost these tokens.