Privacy-Centric Crypto Mixing Protocol Tornado.cash Plans to Deploy on L2 Platform Arbitrum

One of the largest cryptocurrency mixing protocols, Tornado.cash, has announced the project will deploy on the L2 (layer 2) Ethereum platform Arbitrum One. The creators of the Ethereum-based mixing application explain that settling on Arbitrum will allow Tornado.cash users to benefit from cheaper transactions.

Tornado.cash to Deploy on Arbitrum – ‘Cheaper Transactions Being the Biggest Comparative Advantage’

On November 29, the team behind the ethereum mixing application Tornado.cash revealed the project plans to deploy on the Arbitrum One network. The news follows the project’s recent collaborative efforts that applied network connections to Polygon, Avalanche, Binance Smart Chain, and Xdai. This week, total deposits for Tornado.cash on the Xdai chain crossed $1 million. In terms of ether deposited since the project’s inception, the protocol has taken in 2,222,007 ether, or $4.3 billion.

Essentially, Tornado.cash improves ether transfer privacy by breaking onchain links between the source and destination addresses. The protocol depends on zero-knowledge proofs (ZKP) in order to ensure links to deposits and withdrawals are non-existent. Tornado.cash is just over two years old as it was introduced in August 2019. The project even got the former Bitcoin Core developer, Gavin Andresen, to notice the ether mixing protocol in mid-January 2020.

On May 13, Tornado.cash developers destroyed their private keys using a process called multi-party computation (MPC). The scheme allowed the Tornado.cash developers to give the smart contract to the community without the developer’s private key. “With a record 1114 contributions this was by far the largest Trusted Setup Ceremony to date. By comparison, all other trusted setup ceremonies had less than 200 participants,” the Tornado.cash team explained in the blog post.

Arbitrum is an L2 solution that leverages optimistic rollups and Arbitrum users benefit by using ethereum (ETH), its token derivatives, and smart contracts for a fraction of the cost. Statistics from l2fees.info show that the average ethereum transaction can cost $7.08 while using Arbitrum the same transfer would cost $2.81. While transferring ERC20 tokens could cost $16.19 using L1 (layer 1), L2 fees using Arbitrum to transfer a token will cost $3.09.

Swapping tokens is the most expensive onchain (L1) transaction costing around $35.41 per transaction. However, Arbitrum users swapping tokens only pay around $4.85 per transfer according to today’s l2fees.info metrics. The Tornado.cash blog post says that “the protocol’s smart contracts are all set and ready to spin on Arbitrum.” The biggest advantage to using Tornado.cash with Arbitrum is data transfer costs.

“Settling on Arbitrum will allow Tornado.cash users to take advantage of all the benefits a Layer 2 can offer, with cheaper transactions being the biggest comparative advantage,” the team’s blog post highlights. “This proposal is part of the protocol’s desire to constantly improve itself and allow more users to claim back their right to privacy. Moreover, with this deployment, Tornado.cash will join a thriving ecosystem composed of multiple other defi applications.”