Understanding the RAILGUN Privacy System

RAILGUN is a suite of smart contracts designed to help users protect their on-chain privacy by obscuring key details of cryptocurrency interactions. When participating in any public blockchain, information like sender, recipient, token, and transaction amount can often be traced. RAILGUN shields these details so they stay hidden from public view.

What Does RAILGUN Hide?

For a transaction to remain private, the following must be concealed:

• Sender of the interaction
• Recipient of the interaction
• Token that is sent
• Amount of the token that is sent

To achieve this, RAILGUN provides Private Balances—an anonymous set of tokens and users—which can be thought of as a large pool. Observers from the outside only see that a token was moved from the pool, but they cannot tell who deposited or who withdrew.

How Private Are These Balances?

The level of privacy within Private Balances depends on:

1. Number of unique shield interactions and users: The more participants, the harder it is to link deposits and withdrawals.
2. Total Value Locked (TVL) in the RAILGUN smart contract: A higher TVL typically means more transactions and interactions, increasing anonymity.
3. DeFi interaction and Private Send volume: Swaps, transfers, and other complex interactions raise the “noise” level, making it more difficult to trace specific transactions.

Token Choice Matters

Popular stablecoins like USDC or DAI have many depositors, offering higher anonymity. Less common tokens with fewer transactions may provide less privacy because there’s a smaller group of depositors that transactions could come from.

Complex Interactions Enhance Privacy

RAILGUN supports Private Sends and more advanced DeFi operations (e.g., swaps on Railway DEX). Each interaction adds another layer of complexity for would-be trackers. By enabling regular trading within the shielded environment, RAILGUN makes it much harder for observers to link deposits to specific assets or addresses. This extra “noise” means that even with less total liquidity, you often still enjoy stronger privacy than you would in many other solutions with a similar TVL.

Broadcasters and UTXOs

Broadcasters

Instead of having users send transactions directly from a traceable public address, RAILGUN employs Broadcasters—wallets that broadcast transactions to the blockchain on your behalf. This extra layer ensures your public address remains hidden, as observers only see the Broadcaster’s wallet sending the transaction.

UTXOs

RAILGUN utilizes Unspent Transaction Outputs (UTXOs), a mechanism similar to Bitcoin and Zcash. A UTXO is the authorization to spend currency, and in RAILGUN it’s arranged in a Merkle Tree. This Merkle Tree is:

• Completely anonymized
• Maintained in the smart contract
• Used to prove ownership and balances cryptographically

By storing and managing these UTXOs in a private, on-chain data structure, RAILGUN ensures transaction details remain concealed from public view.

For a deeper exploration of RAILGUN’s privacy model and practical tips to enhance your on-chain anonymity even further, feel free to check out RAILGUN’s detailed documentation and articles.