Nym unveils software to enhance Ethereum validators’ privacy with mixnet routing

Blockchain project Nym has released a software called “Nym Libp2p” to improve Ethereum validators’ privacy.

This move comes at a crucial juncture when Ethereum’s transition to a proof-of-stake (PoS) mechanism has increased the need for stronger network privacy and security.

Developed collaboratively with Ethereum development firm Chainsafe, the Nym Libp2p module provides a solution to the risk of IP address and metadata leakage while promising a barrier against distributed denial-of-service (DDoS) attacks.

The software can be used as an add-on module with the Libp2p protocol, a standard communication system used by Ethereum consensus layer clients like Lighthouse. While the Libp2p validator communication protocol employs encryption, the Nym team claimed that communication patterns across the network remain somewhat exposed. Their module addresses that issue.

“The introduction of this module enables Ethereum validators to obscure their transactions via the Nym “mixnet”, thereby shielding them from DDoS attacks and other network layer vulnerabilities,” a Nym Technology spokesperson said.

Nym Technology, the core development firm behind the Nym project, raised $13 million in a 2021 funding round led by Andreessen Horowitz (a16z), giving it a $270 million valuation.

Mixnet integration for anonymized traffic

The module can enable Ethereum validators running the Lighthouse client to route their traffic through a Nym-operated mixnet—a network mechanism developed to boost privacy and anonymity. The mixnet accomplishes this by encrypting and randomly routing network traffic, thereby making it more challenging to trace digital communications to their source. This feature adds a layer of privacy for Ethereum validators utilizing the Nym Libp2p module.

The software rollout is timely, given the surge in staking activity following the transition to proof-of-stake (PoS), and the subsequent increase in the value being staked on Ethereum, which may necessitate privacy options. Ethereum’s transition to a PoS consensus last year necessitates increased coordination and traffic between validators, which can potentially expose sensitive system information, the team explained.

Furthermore, Ethereum’s shift to Shapella led to a sharp increase in the number of validators in the ecosystem. Beaconscan data shows a 15% rise in validators in the month following the upgrade, compared to a 3% growth in the preceding month. Recognizing these developments, Nym views it as essential for Ethereum validators to bolster privacy measures. The team claimed their new module and mixnet could serve this purpose effectively to attain transactional privacy at the validator level.

“The mixnet integration for Ethereum consensus clients anonymizes this traffic between validators, thereby addressing vulnerabilities like DDoS attacks, IP leakage and even helping to prevent the censorship of transactions if needed,” the team stated.