Complete Transaction Privacy

Multi-Layer Defense: DERO combines ring signatures, homomorphic encryption, bulletproofs, and TLS encryption. Even if one layer weakens, others protect your privacy.

How Privacy Layers Work Together

DERO's privacy isn't a single feature—it's four independent layers that work together. Each layer protects different aspects of your transaction, and they're designed so that even if one layer weakens, others maintain your privacy.

The Flow:

How They Interact:

When you send a transaction, each layer adds privacy at a different stage. Network encryption protects your traffic from ISPs. Ring signatures hide which address sent the transaction. Homomorphic encryption keeps all amounts secret. Bulletproofs prove validity without revealing anything. Together, they create defense in depth—multiple barriers that protect your privacy even if one layer is compromised.

Source Code References:

Network: p2p/connection.go (TLS encryption)
Sender: cryptography/crypto/proof_verify.go (ring signatures)
Amount: cryptography/crypto/algebra_elgamal.go (homomorphic encryption)
Proofs: cryptography/crypto/bulletproof.go (zero-knowledge proofs)

What Each Observer Sees

Understanding what different parties can and cannot see helps illustrate how DERO's privacy layers work together in practice.

Observer	Can See	Cannot See	Why Privacy Maintained
ISP/Network	Encrypted traffic to DERO	Transaction details, amounts, addresses	TLS encryption hides all content
Blockchain	Ring (2-128 members), encrypted commitments	Real sender, actual amounts, balances	Ring signatures + homomorphic encryption
Chainalysis	Transaction patterns, metadata	Definitive sender, amounts, proof of sending	Cannot prove specific sender identity
Bob (receiver)	Amount, comment, sender position	Alice's balance, other transactions	Only sees his own transaction details
Alice (sender)	Everything (has private keys)	-	Controls own privacy through wallet

Real Transaction Example

Alice → Bob: 100 DERO

Balance: 500 DERO
Send: 100 DERO
To: Bob
Comment: "Coffee"

After send:
Balance: 400 DERO ✓

Privacy at Each Stage

Stage	Privacy Added	Source Code
Creation	Local only	`walletapi/wallet_transfer.go:62`
Ring Formation	Sender hiding	`cryptography/crypto/proof_generate.go`
Encryption	Amount hiding	`cryptography/crypto/algebra_elgamal.go:69`
Proofs	ZK validation	`cryptography/crypto/bulletproof.go`
Broadcast	Network encryption	`p2p/connection.go` (TLS)
Verification	Homomorphic check	`blockchain/transaction_execute.go:239`

Key Takeaways

What's Protected:

Sender identity (hidden among 2-128 ring members, default: 6.25% chance)
All amounts (encrypted with homomorphic encryption, never decrypted)
All balances (encrypted at all times)
Transaction linkage (unlinkable, independent rings per transaction)

What's Visible (Necessary for Function):

Transaction occurred (required for processing)
Ring member list (creates ambiguity, actually protects privacy)
Timing metadata (doesn't reveal transaction details)

DERO's Design: Privacy over third-party verification. Only you (with private keys) can prove you sent a transaction. Third parties cannot definitively prove sender identity—this is by design. Plausible deniability is a feature, not a bug.

⚠️

Remember: Privacy requires ambiguity. If you could prove to others you sent a transaction, your privacy would be broken. Plausible deniability is a feature, not a bug.

Privacy Technologies:

Homomorphic Encryption - Encrypted balances
Ring Signatures - Sender anonymity
Bulletproofs - Range proofs
Payload Proofs - Prove your transactions

Understanding Transactions:

DERO Tokens - Private token transfers
Account-Based Privacy - Stealth addresses

For Users:

DERO Wallets - Send private transactions
Wallet RPC API - Programmatic transfers