Ethereum developers propose pERC-20 for private transfers
Ethereum developers have proposed pERC-20, a draft token standard designed to make token transfers private by default, according to multiple project discussions and writeups circulated on Thursday. The proposal, tracked as ERC-7605 in one report and described in draft form on Ethereum’s research forums, would hide balances, transfer amounts and counterparties using zero-knowledge proofs, while keeping the token supply verifiable onchain.[1][3][4]
Key Metrics / At a Glance
- pERC-20 is described as a privacy-native fungible token standard for the EVM, meaning privacy is built into the token itself rather than added later through wrappers.[3][4]
- The draft proposal says there is no public
balanceOf,approve,allowanceortransferFrom, which marks a break from the standard ERC-20 interface.[3][4] - The system is designed so that balances and transfer amounts stay hidden by default, while total supply remains publicly verifiable.[3][4]
- One draft states that the standard is not binary-compatible with ERC-20, limiting direct reuse of existing tooling.[3]
- The proposal is still draft and has not completed the Ethereum review process, so implementation remains uncertain.[1][3][4]
- A separate draft related to private transfers, EIP-8182, is also in draft status, underscoring that Ethereum privacy work remains early-stage.[5]
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pERC-20 aims to change how Ethereum tokens are held
The core pitch behind pERC-20 is simple: users would be able to hold and move tokens without publicly exposing their balances or transaction details.[1][3][4] Unlike ERC-20, where wallet balances and transfers are visible onchain, the draft standard would use encrypted notes and zero-knowledge proofs so that private transfers are validated without revealing sensitive data.[1][3][4]
The proposal is notable because it does not appear to be a wrapper for existing assets. In the draft materials, pERC-20 is framed as a native privacy standard, meaning tokens would be minted into hidden balances from the start rather than converted into a privacy layer afterward.[3][4] That distinction matters for adoption because it affects how developers build wallets, token contracts and compliance tools around the standard.
Draft status limits near-term impact
The proposal is still in draft form and must go through the full ERC review process before it can be treated as an accepted standard.[1][3][4] One report notes that no mainnet changes are required for the concept to function as an application-level standard, but that does not remove the need for broad developer support before meaningful usage can emerge.[1]
A separate Ethereum privacy proposal, EIP-8182, is also described as draft standards track work for private ETH and ERC-20 transfers.[5] The overlap suggests Ethereum developers are exploring privacy at more than one layer, but it also shows the field is still fragmented and unresolved.
Why the proposal matters for token design
| Area | pERC-20 draft | Standard ERC-20 |
|---|---|---|
| Balance visibility | Private by default[1][3][4] | Public onchain[10] |
| Transfer amounts | Hidden with ZK proofs[1][3][4] | Public onchain[10] |
| Counterparties | Not publicly exposed[1][3][4] | Public onchain[10] |
| Core interface | New privacy-focused interface[3][4] | balanceOf, approve, allowance, transferFrom[3][10] |
For token issuers, the proposal could widen the design space for products that need confidentiality, including payroll, treasury, and settlement use cases. Analysts note that the trade-off is straightforward: more privacy can help adoption in some segments, but it also raises integration friction because existing ERC-20 infrastructure is built around public balances and standard approval flows.[3][4][10] Interpretation based on available data.
Privacy push collides with compliance questions
The draft discussions also point to an effort to preserve some auditability. One description says the VOSA-to-VOSA transfer graph remains publicly auditable, while another says the framework could include a compliance mechanism that allows issuers to freeze specific notes without exposing ordinary users’ histories.[4][2] That suggests the proposal is trying to balance privacy with regulatory demands, although the exact enforcement model remains unsettled.[2][4]
That balance is likely to be one of the main points of debate if the proposal advances. Privacy features can improve user protection and reduce the visibility of routine financial activity, but they can also complicate monitoring, custody policies and exchange integration. The uncertainty is not just technical; it is also governance-based, because Ethereum standards need broad ecosystem acceptance before they matter in practice.[1][3][4]
Market relevance depends on developer uptake
The immediate market impact is limited because the proposal is still early and no deployment timeline has been set.[1][5] Even so, the move fits a broader pattern in Ethereum development: privacy is moving from a niche concern toward a more formal design priority, especially as developers look for ways to make tokens usable without exposing all transactional data by default.[3][4][5]
Market participants view the main risk as fragmentation. If pERC-20 advances without strong compatibility layers, it could create a parallel token class that is harder to support in wallets, analytics platforms and exchange infrastructure. If it does gain support, it could become one of the clearest efforts yet to make private transfers a native feature of Ethereum tokens rather than an external add-on.[3][4]
What to watch next
The next test is whether the draft can move from forum discussion into a recognized Ethereum improvement process with enough support to attract builders.[1][3][4] The main uncertainty is whether privacy-native tokens can satisfy both user demand for confidentiality and the ecosystem’s need for interoperability and compliance, a tension that will likely define the proposal’s path through review.
- https://tech.yahoo.com/general/articles/ethereum-news-ethereum-perc-20-114519865.html
- https://www.kucoin.com/news/flash/ethereum-developers-propose-new-privacy-focused-token-standard-perc-20
- https://ethresear.ch/t/eip8287-privacy-native-fungible-token-standard-draft/25089
- https://ethereum-magicians.org/t/draft-erc-perc-20-privacy-preserving-native-erc-20-token-standard/27882
- https://www.mexc.com/news/1051530
- https://ethereum.org/developers/docs/standards/tokens/erc-20/
