- Flare builds a privacy layer connecting confidential execution to XRPL and Bitcoin
- Flare Data Connector verifies XRPL and Bitcoin events without revealing which wallet made the request.
- Users make one on-chain deposit then all subsequent DeFi activity stays invisible on the ledger.
Developers working on the Flare network are building confidential transaction infrastructure that connects directly to the XRP Ledger and Bitcoin, allowing users to verify on-chain activity without revealing wallet identities or transaction details to the public ledger.
The project, called Encrypted Finance, is currently live on Flare’s Coston2 testnet. It uses three native Flare protocols to enable private execution of financial transactions that would otherwise be fully visible on public blockchain infrastructure.
How It Works
The system relies on Flare Data Connector to verify events on the XRP Ledger and Bitcoin without exposing which wallet initiated the request. Flare Confidential Compute provides hardware-sealed execution environments where transactions are processed in an encrypted state that operators and validators cannot inspect. Flare Time Series Oracle supplies live market pricing to ensure privately executed trades settle at accurate rates.
Users make a single on-chain deposit. All subsequent activity executes privately through the sealed hardware environment, with no further wallet activity appearing on the public ledger.
Why Developers Are Building It
Public blockchains make every transaction permanently visible. On the XRP Ledger, wallet balances, trading activity, and counterparty relationships are fully transparent by design. That transparency supports auditability but creates barriers for institutional participants who cannot broadcast trading positions or strategies without market consequences.
Developers building on Flare cited the inability of large financial participants to execute significant transactions without exposing intentions to competing market participants as the core problem the infrastructure is designed to solve.
Compliance Considerations
The system includes selective disclosure mechanisms allowing users to generate cryptographic proofs of compliance, solvency, or transaction history for specific counterparties without revealing full wallet activity publicly. Developers said the approach is intended to meet regulatory requirements without eliminating all transparency.
The infrastructure supports 48 transaction types, including swaps, lending, borrowing, staking, cross-chain transfers, and large order execution. It is live on testnet. No mainnet launch date has been announced.
Related: XRP Ledger Upgrade Deadline Nears With 40% Network Updated
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