Tornado Cash Launches a DAO to Fund Privacy on Ethereum

July 1, 2020 Editor Ethereum 0

Tornado Cash – the decentralized privacy protocol on Ethereum – announced the launch of Tornado Fund, a fund focused on investing and developing the privacy-preserving technology.

For those unfamiliar, Tornado Cash is a non-custodial privacy technology leveraging zero-knowledge proofs allowing DeFi users to engage in private transactions. Unlike other Ethereum privacy solutions, Tornado Cash deposits user funds into a smart contract in a “black box environment” that’s not visible on-chain.  More importantly, TornadoCash is completely trustless and permissionless. No centralized third party controls take custody or controls the funds at any point.

Now, the introduction of Tornado Fund continues the evolution of the technology to become an unstoppable privacy protocol on Ethereum. Tornado Fund will be responsible for funding the continued development of the privacy technology and ultimately, the release of V3 of the Tornado Cash Protocol. The announcement hints that in V3, there may be a native token for Tornado Cash where the fund will transition to TornadoDAO. The core focus on TornadoDAO will be governance over the future of the privacy protocol.

As stated in the announcement:

Under this scenario, the Tornado Fund (a proto-DAO) will evolve into a fully decentralized DAO that helps ensure that protocol developers and other early supporters of the protocol can continue to fuel network development without centralized control. The entire network and protocol will be decentralized and entirely community-driven. The future of Tornado Cash will be in the Ethereum community’s hands.

With that in mind, The Tornado Fund will be a limited liability entity in Delaware using the Moloch v2 framework. In order to maintain U.S. compliance, any interested members of the Tornado Fund must be an accredited investor. Any prospective members can purchase a 1% interest in the Tornado Fund for 30 ETH in return for a convertible note representing the right to any future tokens reserved by the Tornado Cash team.  In total, the Tornado Fund will comprise of a maximum of 100 members and 3,000 ETH (~$700,000). All of the capital raised by the Tornado Fund will be used to fund the Tornado Cash team (PepperSec, Inc.).

Closing Thoughts

Despite the open and transparent nature of DeFi, privacy should be a right for any Ethereum user. The implementation of Tornado Cash fills this void and provides a non-custodial way for users to preserve their privacy when transacting on the public Ethereum network. Given its popularity in the ecosystem along with the recent investment from The LAO, Tornado Cash is set for another exciting year.

 

At the end of the day, Tornado Cash, along with other privacy-preserving technologies, will serve as a critical piece for Ethereum as a whole. We can expect that with the launch of Tornado Fund, the privacy protocol to continue adding new features, better user experiences, and more.

If you’re interested in becoming a member of the Tornado Fund, you can pre-register here. The fund is expected to launch in the coming weeks.

For those looking to learn more about this Ethereum privacy protocol, check out the “About” page here. For anyone looking to stay up to date on the latest developments, make sure to follow Tornado Cash on Twitter or hop into the Telegram for the latest discussions!