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Stellar Preview Nethermind Built Payment Privacy Pool

2026-08-27 12:15:27
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Shield pool for counterparty privacy

BuildOnStellar previews Stellar Private Payments (SPP), a privacy pool built by Nethermind that hides counterparty identities and transaction amounts on the XLM network. Users hold private balances in the shared shielded pool and make mutual payments within the pool, while the public ledger only records that the pool is used, but hides the identities and transaction amounts of the paying parties. The system is a privacy-protected payment solution that uses zero-knowledge certificates. Through Groth16 certificates, users can deposit, transfer and withdraw tokens while maintaining transaction privacy. Funds are still publicly visible when entering and leaving the shared pool, but transfers within the pool do not reveal counterparties or amounts. Confidential Tokens hide amounts and balances between known counterparties, while Stellar Private Payments further protects the privacy of the counterparty identity itself. These two tools form part of the broader privacy stack that Stellar builds at the application level.

Built-in compliance controls

SPP provides pool managers, auditors and regulators with the control functions they need, including KYC access, the ability to freeze non-compliant users, selective disclosure of individual transactions, and global view keys for authorized supervision. This design reflects a deliberate view of privacy and compliance as complementary rather than competing goals. The system introduces an Associated Set Provider (ASP) as a control mechanism that maintains the member and non-member Merkel Tree, which can prove whether a particular deposit belongs to an approved or blocked collection, allowing pool operators to perform administrative controls without compromising user privacy. The pool can also be configured with blacklists and whitelists, making the tool suitable for compliance-sensitive processes such as B2B settlement and donations. These contracts only run on the test network. The code has not yet been security audited and has not been approved for deployment on the main network. For developers, SPP TestNet offers a variety of integration options, including a pre-built WebAssembly SDK and command-line interface, as well as demos using Stellar's native XLM and EURC pools to demonstrate private transfers and withdrawals.

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