Value Re-purposing

Hinkal addresses the challenge of fragmented liquidity in Privacy Pools through Chain Abstraction. Rather than creating large Shielded Pools for each network, Hinkal introduces a Shared Privacy Pool that spans all networks. This means deposited and staked assets all reside within the same network, enhancing the privacy of these assets.

Hinkal introduces a Shared Privacy coordination layer, allowing users to bootstrap a Shielded pool similarly to how EigenLayer bootstraps Shared Security. Stakers can re-purpose the value of their ERC-20 tokens to increase the Shielded pool, which provides privacy across all chains simultaneously. In return, stakers receive hERC-20 tokens, enabling them to earn additional fees from private transactions while remaining liquid for further DeFi use. A single shielded pool can be used across all chains, solving the scalability issue of privacy by eliminating fragmentation. This is achieved through chain abstraction solutions and native bridges.

Stakers are encouraged to build the shielded pool and increase the TVA while maintaining liquidity. They can stake ERC-20 tokens from their public wallet or shielded address and receive hERC-20 tokens at a specified public wallet or shielded address. This modular approach allows contributors to choose whether they want to use Hinkal’s privacy services or not while staying liquid.