Arcium enters the TGE process, marking the end of classical privacy projects.

Written by: Zuo Ye

Fashion is cyclical, and Crypto is a loop; perhaps the cycles are no longer the same, but imitation lives on forever.

The crypto supercomputing project Arcium on Solana chose Coinlist for its community round, instantly reminding me of the Coinlist quota grabbing script wars from 2017 to 2021, a beginner's village for scientists and opportunists.

New generations surpass the old, yet Arcium has changed its banner three times, struggling to carve out a path for itself, having narrowly escaped the Solana Meme season; it remains to be seen if it can fulfill its dreams in the BSC Meme season.

Past Life: The Dark Pool Elusiv that Deleted Its Database and Fled

In three sentences, Elusiv's transformation into Arcium can be summarized:

• You should know that Arcium is not my true surname; Elusiv is the real name;

• Data-based MPC encryption is a disguise; the dark pool is the original business;

• Privacy 1.0 is about personal private states, while 2.0 emphasizes shared collaboration.

Elusiv originated from the Solana hackathon, initially a Solana imitation of crypto privacy projects like Zcash, Monero, and Tornado Cash, focusing on building dark pool services using ZK/FHE/MPC.

Dark pool services are not complex; like the dark web, they refer to deep behaviors beyond the surface, reminiscent of deep state activities. Essentially, dark pools are anonymous trading behaviors by traditional institutions or large individual traders in the over-the-counter market to avoid fluctuations in the secondary market.

However, on the blockchain, the public and transparent ledger system means all transactions are public, which is also the source of MEV, so there is a specific need for anonymous trading.

As mentioned earlier, at this point, Privacy 1.0 is no different from mixers and Monero; after Tornado Cash was regulated, continuing down this path would be a provocation to U.S. authorities, leading to Elusiv's code being halted two years ago.

Image caption: Elusiv halted, image source: @ArciumHQ

If you search for Dark Pool and FHE on @ArciumHQ, you will find they focus on two things: discussing how MPC is superior to FHE, mainly in terms of computational efficiency and cost, and their long-term optimism for Dark Pool, just under a different name now.

However, there is no absolute superiority among technologies like MPC/FHE/ZK/TEE; it is more about different application scenarios. MPC focuses on trusted computing among multiple parties, FHE focuses on computing behavior after encryption, while ZK ensures the validity of data before encryption.

Image caption: Comparison of privacy technologies in Arcium's view, image source: @ArciumHQ

In fact, it can be responsibly said that various privacy technology-oriented projects are struggling, so why target each other? Growing the market together is the more mutually beneficial choice. However, this is not the most entertaining aspect; after Tornado Cash saw a turnaround, Arcium began to promote Dark Pool again.

Building a project is difficult, but building a well-known project is even harder; it must withstand the market's trials and remain as fresh as first love. It is challenging for retail investors, and even more so for profitable retail investors, who must decipher every word in "the Yellow River Gang all have Bluetooth."

This Life: Transitioning to Crypto Supercomputing with Parallel FHE

Arcium has its own ideas about data-based privacy.

In simple terms, Arcium is considering how to combine blockchain characteristics with MPC, and the answer is straightforward: since MPC requires multi-party computation and blockchain requires multi-node operation, combining the two creates a multi-party execution environment (MXEs).

Based on this, along with parallel execution technology and the characteristics of FHE/ZK, a fast and secure blockchain encryption system can be built.

For those interested in parallelization, you can read an old article that doesn't hit back: Parallelization Beyond EVM, High-Performance L1 (Sui) vs. Ethereum L2?

However, these are not particularly important; like Nillion, the core issue with current privacy technologies is the lack of scenario support. The AI, DePIN, and DeFi chosen by Arcium can serve as gimmicks for fundraising and token issuance, but only the dark pool and privacy trading (mixing) in the DeFi space currently have real market demand.

Arcium's claim of being 10,000 times faster than FHE architecture is also meaningless because the demand for FHE in blockchain is zero, and thus zero times ten thousand is still zero.

I am not denying Arcium or the MPC/FHE technology, but their long-term demand is unclear, and under the pressure of token issuance, the project team can only seek non-real demands, just like the repurchase of junk coins will still be junk coins.

Next Life: The Detached Solana Privacy 2.0

But there will always be a turnaround; Helius once contributed the most straightforward technical article on Solana 2.0 and is now redefining the concept of Solana Privacy 2.0. Although I don't believe this, it sounds reasonable.

The core point is simple: Privacy 2.0 is multi-party privacy, typically involving shared private states, in other words, MPC, specifically, the essence of Arcium's concept:

• arxOS is a cryptographic operating system used to aggregate the computational power of Arcium nodes;

• MXE is a computing execution environment that allows secure computation to occur on Arcium;

• Arcis is a programming language modified from Rust, similar to the relationship between Move language and Rust.

Here, I really have to complain; including StarkNet, Move language, and Arcis are all modified from Rust. Perhaps from the project team's perspective, this maximizes the effectiveness of customized languages, but it adds to the developers' burden without any practical effect.

Image caption: Differences between Privacy 1.0 and 2.0, image source: Helius

In reality, privacy AI likely does not need MPC/FHE technologies. If LLMs can be made sufficiently small, MCP can become the de facto industry standard, directly meeting the daily needs of individual users without excessive exposure of privacy.

If privacy or private AI refers to a company, entity, or individual deploying LLMs independently, then it can inefficiently incorporate the interaction delays and computational consumption brought by MPC/FHE. The affordability of MPC is relative to FHE; its own computational consumption is not cheap.

Secondly, dark pools and privacy trading (anonymous small transfers, mixing) face regulatory issues primarily, followed by cost issues. Dark pools are for large players; the battle between traditional financial market dark pools and the SEC continues, and mixers face similar challenges.

Although Trump presents a spirit of making money even if the flood comes after my death, if on-chain dark pools truly rise, will they learn from RailGun and the officially reported privacy model? In that case, the collusion among large players will only hurt retail investors.

The U.S. government has officially abandoned its hunt for Tornado Cash, but after this battle, pure, classical true privacy solutions will not become mainstream in the market again. The active and passive compliance of TRM Labs and RailGun allows regulatory bodies to control on-chain behavior.

The only real market space is for anonymous small transfers, but ordinary individual users will not pay extra for privacy. You can consider it a service, but it is difficult to support a complete PMF logic with this alone.

Conclusion

Arcium's entry into the TGE process marks the end of classical privacy projects, even more classic than the overturning of Tornado Cash. From now on, project teams will actively self-limit, and boundaries will be established.

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