The State of Private Bridges in Web3: Options, Legal Risks, and Liquidity for Nomos
This document explores the current landscape of private bridges within the Web3 ecosystem, focusing on the available options, associated legal risks, and strategies for private liquidity transition for Nomos. As the demand for privacy-preserving solutions grows, understanding the nuances of private bridging is crucial for secure and compliant operations.
Private bridges are blockchain bridges designed with enhanced privacy features, aiming to obscure transaction details, sender/receiver identities, or asset origins when moving assets between different blockchains. Unlike public bridges where transaction data is often transparent on both chains, private bridges employ various cryptographic techniques to maintain confidentiality.
Several approaches and technologies contribute to private bridging solutions. Each option presents unique trade-offs regarding privacy, security, and decentralization.
Zero-Knowledge Proof (ZKP) based Bridges:
Examples/Projects:
Supported Networks: Aleo, Ethereum, support for Base and Arbitrum in the works
Supported Assets: facilitating ETH, USDC, USDT transfers between ETH and Aleo. On Aleo, these assets will be wrapped as vETH, vUSDC, and vUSDT.
Launch date: testnet launched 19.06.2025
Privacy Preservation: Transaction details, sender/receiver addresses, and asset types can be obscured.
Compliancy measures: Initially using a multi-attestor model to validate transfers with five independent attestors monitoring bridge activity. When a user initiates a transfer, these attestors validate the transaction and sign off before tokens are released on the destination chain. This was accomplished through a 24-hour delay to ensure money laundering risk mitigation. With the integration of Predicate, pre-transaction policy infrastructure, Verulink reduced that delay to just 15 minutes—without sacrificing safety or ARC-100 compliance.
To minimize exposure to malicious actors, Verulink implemented: