Core Concepts

Stateless Execution vs ZK

What Stateless Execution is

Stateless execution allows complex operations to be processed in a cryptographic enclave separate from the main chain, optimizing for speed and privacy.

What ZK is

Zero-Knowledge (ZK) proofs allow one party to prove to another that a statement is true without revealing any information beyond the validity of the statement itself.

Where Each Excels

Stateless Execution excels in scenarios requiring shared private state or high-throughput computation on hidden values, as the data remains private during the entire lifecycle.

ZK is highly efficient for verifiable computation and proving possession of knowledge (like a private key or a specific balance) without revealing it.

Why Veilnet Uses Stateless Execution

Veilnet utilizes a specialized state accumulator to manage transitions securely without bloating the main chain. This allows complex operations (like transfers and eventually swaps) to be calculated without exposing the individual inputs or outputs to the public chain.

How this differs from Zama fhEVM and Fhenix

Zama fhEVM and Fhenix provide FHE‑enabled execution environments where smart contracts (or coprocessors) can perform arithmetic directly on ciphertexts on the network’s execution layer. Veilnet, by contrast, currently keeps all homomorphic‑style ideas at the application layer: our shielded sequencer computes state transitions off‑chain, then commits encrypted balances and updated Merkle roots to a standard EVM contract. In other words, Veilnet uses FHE concepts (encrypted‑by‑design state, hidden balances) without depending on a specific FHEVM implementation.

Complementary Approaches

While the stateless layer handles the confidential execution of state transitions, ZK proofs (or Merkle proofs) can be used to compress and verify these computations on-chain efficiently. Veilnet's architecture is built to leverage the strengths of both over time.

Why Onchain Privacy Needs More Than Obfuscation

Public Balance Exposure

Standard EVM wallets broadcast your total holdings to anyone who knows your address.

Wallet-Linkability

Every interaction leaves a permanent, traceable link between your wallet and the protocols or users you interact with.

Bridge Traceability

Traditional bridges make it trivial to trace funds moving from one chain to another, linking your identities across networks.

DeFi Transaction Visibility

Your trading strategies, lending positions, and swap intents are public, leaving you vulnerable to MEV and front-running.

Limits of Mixer-Only Approaches

Traditional mixers rely on breaking links via fixed-denomination pools and require significant liquidity to be effective. They are often cumbersome and do not support continuous, private holding or complex DeFi interactions.

Privacy Without a Shielded Pool

Traditional Shielded Pool Model

Mixers use a single pool where anonymity is derived from the crowd. Users deposit and withdraw standard amounts, relying on the volume of other users to hide their specific transaction.

Veilnet's Alternative Approach

Veilnet replaces the traditional mixer with an encrypted state accumulator. When you deposit, your funds enter the Veilnet Vault. Your balance is credited to an internal, shielded account.

Shielded Balances

Your balance is a cryptographic commitment within a Merkle tree, not a public uint256 mapping.

Shielded Recipient Logic

Transfers update the cryptographic state tree without broadcasting the sender, receiver, or amount to the blockchain.

Private State Transitions

All internal movements of value are processed out-of-band and verified on-chain in batches via updated Merkle roots.