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Project Custard: confidential transfers run on X1 mainnet

A demo token moved privately on mainnet. The amount is nowhere in the transfer.

Jack LevinJack Levin · X1 Labs ·

Project Custard was Jack Levin's public test of confidential transfers on X1 mainnet: a demo token moved between accounts with the amount hidden on chain. It showed that the privacy features in X1's token program work on the live network, and it led to the community-built X1 Privacy app weeks later.

What it is

Confidential transfers are an extension of Token-2022, the newer of the two token programs X1 inherited from Solana. A token with the extension can hold two kinds of balance per account:

  • a public balance, which anyone can read, like any other token
  • a confidential balance, stored encrypted, which only the owner's key can read

Moving tokens into the confidential balance (deposit) and back out (withdraw) is public. Transfers between confidential balances carry only encrypted amounts plus zero-knowledge proofs that the sender had enough and nothing was created out of thin air. The chain checks the proofs without ever seeing the number.

Why it's good for X1

Every amount on a public chain is visible forever, which stops many businesses from using one. Salaries, supplier payments and treasury moves are things companies do not want competitors to see. Confidential balances fix the amount side of that, using cryptography rather than trust. X1's own technical roadmap lists encrypted computation, including private orders and front-running protection, as a goal, and the zk gates activated in October make this kind of proof cheaper to verify.

What to watch

  • Addresses are not hidden. Anyone can see that two accounts transacted; only the amount is hidden.
  • Deposits and withdrawals are public, so a deposit of 25 followed by a withdrawal of 25 elsewhere is easy to link.
  • Wallet support is limited. A wallet needs to understand the extension to show a confidential balance.

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