How does RAILGUN privacy work?

What makes RAILGUN more private?

All funds within RAILGUN are collected in Private Pools, an anonymous collectivized set of funds where transactions and assets appear to originate from. To an outside observer, anyone in the pool could have theoretically sent a transaction and actions cannot be linked to a specific deposit or depositor. For transactions entirely within the RAILGUN system (such as Private Sends to another 0zk address), there are additional privacy boosting capabilities with every transaction detail (such as token type and amount) being completely hidden from public view.

The overall level of privacy from Private Pools is a function of:

1. Total number of unique shield transactions and users.

2. Total Value Locked in the RAILGUN smart contract.

3. RAILGUN DeFi transaction and Private Send volume.

Generally, the more pooled funds, the higher the level of anonymity as links are less likely to be drawn between depositor and asset as there is a higher number of potential depositors to try and attach transactions to. Some consideration must be paid to token type. For example, shielding common stables like USDC or DAI will offer greater anonymity vs shielding some unknown meme token with very few depositors.

However, RAILGUN has additional privacy boosting capabilities due to its support of complex smart contract transactions and Private Sends. Every transaction that takes place (such as a swap on Railway DEX), decreases the likelihood a depositor can be linked to a specific asset or deposit transaction, increasing the level of privacy for all Private Pool participants. As RAILGUN enables trading, you can Shield a small amount of crypto and theoretically trade up to a larger position privately, so the total size of the anonymity set is less of a factor in maintaining privacy in RAILGUN.

This means that privacy in RAILGUN's Private Pools is always greater than other privacy solutions with the same amount of TVL due to increased noise from transactions like Private Sends and swaps.

For more detail on privacy in RAILGUN and some tips to further bolster privacy, check out this article.