Who gives a shit about privacy? Three names come to mind: Vitalik, criminals and I guess, asset managers who don't want the whole of Crypto Twitter to be scrutinizing their transactions. Does the average retail user care though? I don't know, but teams like Aztec seem to think so. Its public testnet goes live today. Let's dig into the tech.

In other news…are you coming to Permissionless IV Brooklyn in June? Tickets are $399 (for now!), but you can get one for half price with a unique 50% off discount code if you successfully refer 5 new subscribers to the 0xResearch newsletter. Scroll down for details.

Uniswap v4 chain comparison:

Source: @agaperste/Dune

Uniswap v4's first 90 days tell a story of rapid liquidity migration. Since mid-April, Unichain — Uniswap Labs' custom optimistic rollup — has surged ahead, consistently capturing over 60% of daily v4 volume and often doubling Ethereum's share. That momentum has helped push v4 to $12b in cumulative volume and nearly a third of all Uniswap trading.

The surge in Unichain's activity is largely attributed to a strategic liquidity incentive program initiated by the Uniswap Foundation. This program, approved by the Uniswap DAO, allocated an initial $21 million in UNI tokens to incentivize liquidity providers over a three-month period, with a total of approximately $60 million planned for the first year. The incentives target 12 specific liquidity pools on Unichain, including popular pairs like USDC/ETH, ETH/WBTC, and various ETH-staked derivatives.

Notably, only 3.5% of Unichain's volume comes from "hooked" pools — a signal of just how early the hook ecosystem still is. With 690 hooks deployed and a new wave of hook teams in motion, the next quarter may look very different. The question now: Can incumbent EVM chains reclaim volume, or will Unichain continue painting the chart pink?

— Macauley Peterson

Before the stage, There's the sprint.

The Permissionless IV Hackathon kicks off before the first mic check. No distractions. Just 36 hours to ship something — onchain, open source, in the wild.

The right people are watching. The capital is real. Launch something that speaks for itself.

We'll cover:

Food, caffeine, WiFi, vibes
Technical mentorship, workshops
A free ticket to Permissionless IV
Eyes from top investors and protocols

📅 June 22–23 | Brooklyn, NY | Register now!

Secure your spot

Aztec Network launches testnet

Privacy on the blockchain is a nice idea, but it's hard to build.

Applications like Railgun on Ethereum enable that today, but it's computationally expensive. You could opt for a chain like Monero, but it lacks smart contract programmability.

So the holy grail of onchain privacy looks a little like this: opt-in privacy, native smart contract programmability and ideally a bridge into the EVM world of DeFi. All while keeping the protocol decentralized.

The Aztec team may be closest to cracking that code.

Enter Aztec Network, a zk rollup built on Ethereum (not to be confused with Aztec Connect, which was sunset in 2023). The public testnet launches today.

By leveraging zero-knowledge technology, user balances and transactions on the L2 are encrypted to ensure privacy around details such as the sender, recipient or the transaction itself.

Aztec's programmability is enabled by Noir, the company's Rust-like language for zero-knowledge circuits. Noir lets developers write smart contracts that can perform shielded loans or private voting without needing to learn cryptography.

"Developers can use Aztec to build dapps with privacy features that seamlessly blend with Ethereum's existing infrastructure, and they won't need to struggle implementing complex cryptography," said Aztec Network co-founder Zachary Williamson in a press release.

Aztec's differentiation

Unlike most L2s (one exception is Arbitrum's WASM), Aztec makes some significant modifications to the chain's execution layer.

Public transactions on Aztec are executed through its custom Aztec Virtual Machine (AVM). Private transactions, however, are offloaded to a client-side environment known as the Private eXecution Environment. PXE is used to generate proofs and run smart contract logic privately.

Transaction proofs are then aggregated into single proofs for Ethereum settlement.

Client-side generation of zk proofs is typically expensive.

Yet, Aztec's new L2 keeps costs down. That's largely thanks to its PLONK proving system, which makes it "simpler to generate client-side proofs on expensive hardware," according to the company's blog. PLONK was co-invented by Aztec co-founder and CEO Zachary Williamson himself.

"Our client-side Prover incorporates the latest in PLONK research with the Protogalaxy folding scheme and a unique technique we call Goblin Plonk to accelerate recursion. We also built our own programming language, Noir, from scratch to compile programs directly into zero-knowledge circuits, which allows us to bypass the overheads seen with zero-knowledge virtual machines," Williamson told Blockworks.

Contrary to popular belief, most zk rollups do not actually leverage zero-knowledge tech for the purposes of privacy encryption, making it somewhat of a misnomer. Zk rollups today use the tech primarily for the size compression of transactions — for scaling throughput — without encrypting user data.

Aztec applies zk proofs not just for verification, but also to enable end-to-end encryption of transaction metadata. Privacy is optional, however, tying into Aztec's goals of developing a chain that has flexible privacy and selective disclosure.

That architecture is not possible on the Ethereum L1 today, where all details would be publicly exposed. Neither is it possible on other L1 chains like Monero or Zcash, which allow for private payments but lack smart contract programmability.

"We currently view blockchain privacy as all or nothing, but it doesn't have to be," Williamson said.

Aztec's testnet already has over 100 sequencers in its Devnet and Provernet networks, paving the way for decentralization starting from day one.

— Donovan Choy

Union's improvements upon Tendermint consensus through CometBLS, coupled with ZK proving through Galois, allow for a broadly scalable, cost efficient, and low latency IBC implementation that is feasibly scalable across every existing blockchain, virtual machine and runtime. Union's implementation offers modular crosschain interoperability without the need for trusted intermediaries.

Get the full report

Looping PT eUSDe, stacking ENA

Degens chasing juicy yields can pile into a looping strategy involving Pendle's PT eUSDe — the principal token for staked USDe. Aave has switched on the use of PT-eUSDe as collateral for E-Mode stablecoin borrowing on Ethereum.

So, with your starting capital, you can buy and deposit PT eUSDe May, then borrow whatever the cheapest stable on offer is (currently USDT at 3.92%) and swap it for more PT eUSDe May, which is currently yielding about 7.5%. With leverage, users are farming ENA incentives — at least for May — while capturing the fixed yield embedded in PTs maturing May 29. It's not without risk — PT-eUSDe depegging could put the Aave borrow in danger, but even leaving some LTV buffer, it should achieve upwards of 15% annualized yield on initial capital with a few loops.

This is the sort of degen behavior that was once reserved for whales. But with Ethereum so cheap to use nowadays, it doesn't require a six figure bankroll to go after yield opportunities on mainnet. PT tokens for July expiry are expected to be added soon too.

And for those previously farming ENA Season 3, rewards have finally dropped by the time you read this! According to Ethena's latest update, users will receive ENA directly to their wallets, with no claim required. There was no eligibility checker, though that had been promised — annoying some community members.

Season 3 included incentives across Ethena staking, LPing on Curve and Pendle, minting via partner integrations, and participation in the recent EigenLayer LRT campaign. No firm targets have been shared for Season 4, but TVL in Ethena-linked DeFi strategies has surged in anticipation.

For active participants, today's drop is payday. For those on the sidelines, it's a live test of ENA token stickiness and will point to whether these sorts of Pendle yield loops are sustainable.

— Macauley Peterson

vitalik.eth @VitalikButerin

And my personal focuses (and non-focuses) for 2025. Should be predictable from things I've done and written, but it's worth re-stating explicitly.

tw profile: vitalik.eth vitalik.eth @VitalikButerin

Twin goals of EF:

1. Usage of Ethereum - but usage of a type where users are actually benefiting from Ethereum's underlying properties
2. Resilience and decentralization of Ethereum - viewed holistically, focused on addressing points of weakness anywhere in the stack x.com/AyaMiyagotchi/…