Railgun, one of the leading mixers in the Ethereum ecosystem, is preparing for confidential DeFi. The mixer verifies reported addresses, but allows all other users to transact privately.
Railgun sets the stage for confidential DeFi, hiding whale movements, lending, or other operations. DeFi remains very transparent and is used for signals and data, while also exposing leading wallets.
The project is preparing for Railgun_connect, the universal DeFi connector for private addresses. Railgun will use private 0zk addresses, which do not appear on the blockchain, but will instead use zero-knowledge proofs to ensure validity.
Private addresses are the opposite of readable custom addresses, transacting outside of the public ledger and using Ethereum purely for security reasons.
Railgun announcement it was already testing its confidential infrastructure for CowSwap, one of the most used aggregators for DEX. The goal is to make private addresses as functional as public addresses.
As of January 2026, the private Railgun system already held approximately $100 million in funds, primarily in WETH, USDT, and USDC. Railgun has expanded beyond Ethereum, occupying BSC, Polygon and Solana, with the potential to cover the most liquid DeFi chains.
The native RAIL token costs $2.30, benefiting from relatively strong usage, as well as the privacy narrative.
Railgun to cover all DeFi activities
Railgun plans to include all types of applications in the Railgun_connect system. These will include borrowing, lending, swaps, stable or liquid staking, as well as general transactions. Currently, an application still requires several steps to use a 0zk private address, but Railgun aims to integrate this functionality into protocol interfaces.
As a result, users will be able to use the balance of their private wallets, which will not be found on the Ethereum L1 chain.
If successfully completed, Railgun can add privacy to all existing applications, liquidity pools, and protocols. Users seeking privacy will not need to top up funds or use a blender as an extra step. In theory, all Ethereum-based capital can become private and continue to circulate privately.
Privacy Can Make Exploit Tracking More Difficult
Railgun aims to strike a balance between privacy and protection. The mixer pre-filters some Ethereum addresses, although new exploits may deposit funds before wallets are reported.
Railgun also solves the problem of complex DeFi, especially in terms of collateral and liquidations. To track balances, each confidential address will issue a special NFT that tracks balances and activities.
For all DeFi activities, the special NFT, called Mechs, will interact with the front end of the application to execute trades and liquidations. The process will never expose the real balance of the confidential address, only taking ZK evidence from the wallet owner.
For now, the Railgun functionality is being tested in Terminal Wallet, via the CowSwap interface. This feature is still far from mass use, but it could increase DeFi security in the future.
If you’re reading this, you’re already ahead. Stay tuned with our newsletter.
