What Kind of Privacy Does eERC Provide?
Understanding the privacy features of eERC in the Avalanche ecosystem.
In the previous section, we explored why privacy is a critical enabler for blockchain adoption in industries like finance, enterprise, and gaming.
Now we will focus on eERC (Encrypted ERC), Avalanche’s encrypted token standard and see the exact kind of privacy it delivers on C-Chain Mainnet, Fuji(Testnet), and custom L1 deployments.
Encrypted Balances
- Balances are fully encrypted on-chain.
- Only the token holder (and authorized auditor) can see the actual balance.
- Prevents competitors, analysts, or malicious actors from tracking your holdings.
Private Transaction Amounts
- Transfer amounts are encrypted and not visible on public explorers like SnowTrace.
- Observers can see that a transfer occurred but not how much was sent.
- Uses zero-knowledge proofs to validate transactions without revealing amounts.
Auditor-Ready Privacy
- Built-in Auditability Module allows authorized parties to decrypt specific transactions.
- Access can be revoked or rotated without redeploying the contract.
- Enables compliance with financial regulations while maintaining user privacy.
EVM Compatibility
- Works seamlessly on Avalanche C-Chain Mainnet, Fuji (Testnet), and custom L1s without protocol changes.
- Fully compatible with existing EVM smart contract tooling.
- Developers can integrate using the EncryptedERC Repository.
Flexible Deployment Modes
- Standalone Mode: Fully private token from creation, with optional hidden total supply.
- Converter Mode: Wraps an existing ERC-20 into an encrypted token, enabling private transfers while preserving the ability to unwrap it back to ERC-20.
Example Use Cases
Confidential DeFi
- Private yield farming, liquidity provision, and staking allocations.
Enterprise Payments
- Payroll systems where salaries are encrypted but verifiable to auditors.
- Supplier payments that conceal exact deal sizes.
Private Asset Management
- Managing tokenized real-world assets without revealing portfolio composition.
- In-game transactions in private gaming economies.
In the next section, we will compare ERC-20 vs eERC to see exactly how these standards differ in privacy, compliance, and deployment options.
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