The privacy solution Privacy Pools, supported by Ethereum co-founder Vitalik Buterin, has integrated the USDS stablecoin from the Sky platform (formerly known as MakerDAO).
USDS is now live on Privacy Pools.
Deposit privately and keep full transparency with ZK proofs. https://t.co/tTsr2DzSK7
— Sky (@SkyEcosystem) July 16, 2025
“This is just the beginning […]. In the coming weeks, we will add support for new assets, ecosystems, and use cases, providing them with a compliance-level privacy,” project representatives stated.
Developed by the startup 0xbow, the Privacy Pools protocol employs a mixnet based on zero-knowledge (ZK) proofs and the Association Set Provider mechanism to allow only “clean” funds. The solution ensures privacy for ordinary users while maintaining regulatory compliance.
The Association Set Provider was proposed by Vitalik Buterin in 2023 in collaboration with Chainalysis researcher Jakob Illum, as well as academics Matthias Nadler and Fabian Schar. Unlike traditional mixers like Tornado Cash, Privacy Pools uses so-called “association sets” to filter out dubious funds and prevent them from entering the pool.
“USDS Privacy Pools conceals whose deposit is yours and proves that the funds are not linked to violators—all with ZK. Privacy, USD stability, no ‘toxic’ assets. Very proud of realizing the original DAI idea within a new ecosystem,” commented Sky creator Rune Christensen.
In June, 0xbow announced support for major stablecoins—USDT from Tether, USDC from Circle, and DAI from Sky. In the latest update, the platform integrated USDS, an algorithmic token that combines decentralization with regulatory compliance.
The 0xbow project was founded by Ethereum pioneers Amin Soleimani, Nathan Freed, and Zac Cole. It has received funding from Bankless, Number Group, Public Works, and several private investors, including Vitalik Buterin.
Back in 2023, the Ethereum co-founder described privacy as “the biggest remaining problem” of the network and proposed a solution.
In 2024, Buterin listed use cases for cryptocurrencies in everyday life. In particular, he suggested using ZK mechanisms for verifying “identity, credentials, or reputation.”