Aztec relaunches zk.money privacy wallet on its Ethereum Layer 2

Aztec Labs has relaunched zk.money, a self-custodial wallet for private crypto payments, three years after discontinuing the original product.

The new version runs on Aztec Network, the company's privacy-focused Ethereum Layer 2. Unlike a standard Ethereum wallet, zk.money does not publish users' balances, payment amounts or counterparties on a public ledger, Aztec said Tuesday.

The return comes as privacy has become a larger focus for Ethereum. Its public roadmap calls for making privacy a "first-class property" of the network, while Ethereum co-founder Vitalik Buterin has highlighted the risks of making people's financial activity publicly traceable.

"Onchain transactions between two individuals shouldn't mean publishing your financial history to the world," Aztec Labs CEO Joe Andrews said in a statement. "zk.money is a self-custodial crypto wallet where your financial history stays yours."

Why zk.money is returning

The original zk.money launched in 2021 and was discontinued in 2023 as Aztec Labs shifted its focus to building Aztec Network. Aztec said the wallet reached more than 75,000 unique wallets and processed over $100 million in volume.

Andrews told The Block that demand was not the reason for shutting it down. The earlier system was difficult to expand and could not scale globally, he said.

"We sunset in 2023, not because private payments were a failed thesis, but because they needed infrastructure that did not yet exist," Andrews said. "The system back then was very hard to add features and did not scale globally."

Aztec spent the following three years building Aztec Network, a decentralized Layer 2 designed to support private applications on Ethereum, he added. The network is now overseen by the nonprofit Aztec Foundation, while Aztec Labs develops products on top of it.

"Now that the network is live and stewarded via the non-profit Aztec Foundation, our team at Aztec Labs is back shipping open-source privacy products on top of it," Andrews said. He added that the new infrastructure gives developers more room to add features using Noir, Aztec's programming language for zero-knowledge applications.

How the wallet works

Users can claim a simple handle such as bob.zk.money instead of using a long wallet address, Aztec said. They can send or request payments by sharing a link.

The handles use Ethereum Name Service technology and can work with apps that support ENS. Users can also choose who can interact with their handles.

Users can send funds from Ethereum-based exchanges directly to a zk.money handle. Aztec also plans to connect the wallet with DeFi protocols on Ethereum. The company said it is working with potential partners, with integrations expected in Q4, but declined to name them ahead of future announcements.

Since the wallet is non-custodial, Aztec Labs said it cannot spend, move or freeze users' funds.

Users can access zk.money through the web or run it locally. A mobile app is also planned for Q4, though Aztec said there is no set launch date yet.

The relaunch comes after two older Aztec smart contracts were exploited in June. Aztec said the contracts were linked to separate products that had been shut down years earlier and were not part of the current Aztec Network. The new zk.money runs on the newer network and was not affected, the company said.

Aztec has raised $125 million to date, including a $100 million Series B backed by a16z crypto and Paradigm in 2022.

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