Ethereum Foundation to Live Demonstrate Kohaku Privacy Tool
The official account of the Ethereum Foundation has announced that at 2 PM UTC tomorrow, there will be a live stream titled "Ethereum Builders Live," featuring foundation members Jason Chaskin (@jchaskin22) and Kassandra (@kassandraETH) presenting the Kohaku CLI privacy tool, along with a live demonstration of anonymous transfers across protocols such as Railgun and Tornado Cash.
Kohaku is a privacy wallet reference implementation project led by the Ethereum Foundation, providing an SDK that allows developers to integrate privacy protocols directly into wallet interfaces without relying on centralized relays or RPC services. The first alpha version was released in May this year, achieving privacy transaction relays based on the ERC-4337 memory pool, with teams including Ambire, Railgun, Helios, and the Ethereum Foundation's Privacy and Scaling Research Group (PSE) participating in the collaboration.
Currently, privacy protocols integrated into the Kohaku toolbox include Railgun, and Tornado Cash and Privacy Pools are also on the integration list. Notably, Tornado Cash was previously sanctioned by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC), but was removed from the sanctions list after the Fifth Circuit Court of Appeals ruled in 2025 that OFAC lacked the authority to sanction immutable smart contract code. This ruling is the basis for the Ethereum Foundation's current ability to publicly integrate Tornado Cash into its official projects.
After the Ethereum Foundation announced the integration of the Railgun protocol into the Kohaku toolbox in May, the native token RAIL surged nearly 300%, marking the fastest increase since the token's issuance in 2021, with its market cap reaching approximately $300 million. According to DefiLlama data, the Railgun protocol's annual fee income exceeds $5 million.
In line with this privacy roadmap, the Ethereum Foundation has formed a privacy technology team of about 47 members. The Railgun community has also developed a zero-knowledge multi-signature wallet prototype at the request of Vitalik Buterin, with plans to demonstrate it at the Devconnect conference in Argentina next month. The Kohaku roadmap indicates that goals for 2026 and beyond include zero-knowledge account recovery, quantum-resistant signatures, and support for universal hardware wallets, with the long-term direction being to integrate privacy capabilities directly into Ethereum's account abstraction protocol.
The direct impact of this roadmap on the market is reflected in the logic of "official endorsement = protocol repricing": Railgun was previously a relatively niche privacy protocol, but once adopted by the Ethereum Foundation's official SDK as a default integration, it signals to the market that "this protocol will gain broader wallet distribution channels," leading to a rapid influx of funds into the RAIL token and driving a short-term price surge. Beneficiaries include Railgun and its token holders, while the attention on other protocols like Tornado Cash and Privacy Pools, which were also included in the integration list, has increased, whereas similar privacy protocols that have not been selected for integration by the foundation may be marginalized in this round of "official selection effect."
Source: Public Information
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The Ethereum community has a long history of exploring transaction privacy: Tornado Cash quickly became the largest fund mixing protocol on Ethereum after its launch in 2019, but was sanctioned by the U.S. Treasury in 2022 for allegedly being used to launder funds from North Korean hackers, leading to legal actions against its developers. It wasn't until 2025, when the Fifth Circuit Court of Appeals ruled that OFAC lacked the authority to sanction immutable smart contract code, that the Treasury removed it from the sanctions list. The Ethereum Foundation's current embrace of Tornado Cash in its official projects is, to some extent, a direct result of this ongoing regulatory tug-of-war lasting over three years.
Instead of creating a new privacy protocol, the Ethereum Foundation has chosen to invest funds and engineering resources into "integrating existing protocols"—by using the Kohaku SDK to unify third-party protocols like Railgun, Tornado Cash, and Privacy Pools into the official wallet reference implementation. This is akin to leveraging a technical endorsement to reprice these protocols in the market; the near 300% surge in Railgun's token after the integration announcement indicates that the market perceives being "chosen by the foundation" as a directly realizable value signal, without requiring the protocol itself to present new user growth data in the short term.
This aligns with the Ethereum Foundation's historical approach of using official standards (such as ERC-4337 account abstraction and The Merge upgrade) to "designate" certain technical routes, thereby driving the revaluation of related tokens and ecosystems. However, this time, the focus is on privacy protocols that have long been in a regulatory gray area. The Ethereum privacy track is at a critical turning point, shifting from being targeted by law enforcement to being absorbed by mainstream ecosystems, with the Kohaku SDK seen as a watershed event in the narrative of privacy moving from the margins to mainstream infrastructure.
Essentially, this represents an industry restructuring driven by regulatory changes—the court ruling has redefined the boundaries of responsibility between "code" and "operators," directly altering the compliance risks of privacy protocols under U.S. regulatory frameworks. This has enabled mainstream institutions like the Ethereum Foundation to openly integrate previously sanctioned protocols; the mechanism is that once the regulatory risk premium disappears, technologies that were previously excluded from mainstream ecosystems due to compliance concerns will rapidly be reintegrated into official infrastructure, and their token and protocol values will be recalibrated in market pricing, no longer discounted for legal risks.
ABAB News · Cognitive Laws
The moment regulatory risk disappears is the starting point for asset repricing.
Once officially chosen, the market will complete the narrative for you.
Technologies in the gray area have always lacked not capability, but a legal judgment.