Solana Founder: Privacy is Not a Core Factor of Product-Market Fit
The founder of Solana Labs, Anatoly Yakovenko, also known as Toly, has sparked a debate in the cryptocurrency community by stating that privacy alone is not a convincing feature for crypto products or a crucial factor in determining product-market fit.
In a recent thread on X, Toly contributed to a discussion on the greatest hurdles in the DeFi industry, where he emphasized that privacy does not qualify as a “killer feature.” He stated, “There is no PMF for privacy. In itself, it is not a killer function that would change the user behavior.” This statement has raised eyebrows among crypto enthusiasts, who believe that privacy is a fundamental aspect of cryptocurrency transactions.
According to Toly, for a feature to promote widespread acceptance, it must solve a tangible problem, offer clear utility, and encourage user engagement. In his opinion, privacy does not meet these criteria on its own and is not an independent “killer function” that can change user behavior or adoption patterns in crypto projects. He reiterated this point when a user asked if there were cases where privacy was preferable, to which he responded, “No. If you complain about a problem, this does not mean that there is PMF for the solution.”
Comparing Solana’s Privacy Features to Other Chains
Solana offers native data protection properties via the Token 2022 standard, which supports confidential transfers, encrypted balances, and optional auditor keys. However, these features require token migration and are not yet widely adopted. Additionally, Solana is investing in early-stage data protection projects, such as Elusiv, Arcium, and Light Protocol, which utilize zero-knowledge proofs.
In comparison to other leading chains, Solana is driving innovation in native and app-layer privacy. However, it still lags behind Ethereum (ETH) in terms of data protection infrastructure and ecosystem maturity. Ethereum, on the other hand, does not offer privacy on the base layer but relies on a mature ecosystem of ZK-Rollups, ZKEVMs, and protocols like Tornado Cash for data protection tools.
As the debate around privacy in cryptocurrency continues, it is essential to consider the perspectives of industry experts like Toly. While some may argue that privacy is a crucial factor in product-market fit, others believe that it is just one aspect of a broader set of features that contribute to a crypto product’s success. Ultimately, the decision of whether to prioritize privacy or other features will depend on the specific goals and use cases of each project.
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