a16z Insights: Why Privacy Will Become the Next Major Advantage of Blockchain?

On the world’s largest cryptocurrency exchange Gate, as of December 30, 2025, the privacy-focused Zcash (ZEC) has risen over 1.15% today, with the spot price reaching $531.21. It has increased 27.86% over the past 7 days, 19.88% over the past 30 days, and 473.61% over the past 90 days. Market data shows that since late November 2025, trading activity for ZEC has significantly increased, with its value steadily climbing from the $300 range to the current high levels. This aligns closely with a16z’s emphasis on the importance of privacy.

a16z’s Core Philosophy

a16z Crypto general partner Ali Yahya recently expressed a profound viewpoint: privacy will become the most important moat in the cryptocurrency space. This judgment is not unfounded but based on deep insights into the evolution and practical application of blockchain technology. Ali Yahya pointed out that privacy features are sufficient to distinguish new chains from others and create on-chain locking effects. When users operate on public blockchains, they can easily transact with users on other chains, but on private blockchains, the choice of chain becomes more critical.

This locking effect stems from the intrinsic nature of privacy—once users choose to operate on a particular privacy chain, metadata such as transaction history, asset size, and timestamps are stored on that chain. Switching to another chain could expose this sensitive information, creating strong user stickiness.

Privacy Technologies: Creating On-Chain Locking Effects

The “chain locking” concept proposed by a16z reveals the unique value of privacy technology in blockchain competition. This locking is not just a technical dependency but a deep binding based on data security considerations. When users conduct transactions on a privacy chain, their sensitive data—asset information, transaction frequency, counterparties—are protected. If users consider migrating to another chain, they face a dilemma: either abandon their historical privacy data or risk exposing it by transferring it. This mechanism creates what a16z calls a “winner-takes-all dynamic.” Since privacy is crucial for most real-world use cases, early trust-building and establishing a robust privacy chain ecosystem will secure an unshakable market position.

This also explains why established privacy projects like Zcash can maintain long-term market attention. Based on zero-knowledge proof privacy mechanisms, it is one of the most mature privacy solutions in the market, forming a significant user lock-in effect.

Investment Strategy: From Concept to Practice

a16z not only shares its views but also actively invests in the privacy sector. Their portfolio clearly reflects strategic emphasis on this field. This year, a16z crypto led two funding rounds for the privacy blockchain project Seismic, totaling $17 million. Seismic is a privacy-preserving blockchain designed for fintech scenarios, built on EVM, allowing developers to create privacy applications using familiar Solidity language.

a16z also invested in Miden, a high-performance zero-knowledge virtual machine architecture based on STARKs. Incubated by Polygon Labs, Miden aims to be an “edge blockchain,” migrating most computation and proof generation to client devices, achieving high privacy and scalability. Another noteworthy project is Rayls Labs, which integrates privacy protection with compliance mechanisms through innovative architecture, aiming to reshape collaboration among users, banks, and enterprises. These investments demonstrate that a16z is deploying across multiple technical paths in the privacy sector, from foundational infrastructure to application-layer solutions, building a comprehensive privacy ecosystem.

Performance of Privacy Coins: Market Response to Trends

Market performance often directly reflects trends. Against the backdrop of a16z emphasizing the importance of privacy, the recent performance of privacy coins has attracted attention. According to Gate exchange data, as of December 30, 2025, the spot price of Zcash (ZEC) is $531.75, with a 7-day increase of 27.91%. Its total market cap exceeds $8.753 billion USD, indicating strong market recognition. Historically, ZEC reached a high of about $735 in 2025, and current prices are on an upward trend. This performance is closely related to increased attention to the entire privacy sector.

As the first blockchain system to use zero-knowledge proof mechanisms, Zcash offers complete payment confidentiality while maintaining a decentralized network via public blockchains. This unique design balances privacy and transparency needs, earning broad recognition among institutional investors and retail users.

Future Outlook: Multi-Dimensional Development of the Privacy Sector

Looking ahead, the importance of privacy in blockchain will continue to grow and develop across multiple dimensions.

Technologically, zero-knowledge proofs, trusted execution environments (TEE), and secure multi-party computation will continue to evolve, providing more efficient and secure privacy solutions. Projects like Miden are advancing the “client-side proof generation” paradigm, shifting computation and privacy responsibilities to user devices, reducing on-chain load.

From a regulatory compliance perspective, balancing privacy and compliance will be key. Projects like Rayls Labs demonstrate how technical design can meet global regulatory standards, offering compliant privacy solutions for traditional financial institutions.

In market applications, as institutional investors and traditional financial institutions accelerate their entry, demand for privacy protection will expand from simple transaction privacy to complex financial operation privacy. This will drive the emergence of more privacy solutions tailored to specific use cases.

Price Forecast: Revaluation of Privacy Assets

Based on a16z’s insights and market trends, the value of privacy assets is expected to undergo systematic revaluation. The forecast data from Gate suggests that by 2030, ZEC could reach approximately $896. This indicates significant growth potential from current levels. Technical analysis shows that if interest in the privacy sector persists, ZEC might test the $537 level in 2026 and challenge $564 in 2027. These predictions are based on increasing adoption of privacy technologies and growing market demand for privacy protection.

Long-term, as blockchain applications penetrate broader financial and social fields, privacy protection will shift from an “optional feature” to a “necessary characteristic,” with specialized blockchain projects and tokens enjoying premiums. The prophecy by a16z that “a few privacy chains will dominate most of the cryptocurrency ecosystem” is gradually becoming reality.

The application of privacy technologies is transforming industry ecosystems. As a privacy coin leader, Zcash’s market cap has surpassed 48 billion RMB. Projects like Seismic, which have received continuous investment from a16z, are deeply integrating privacy with fintech. The “chain locking” effect predicted by a16z has already manifested: once users choose to transact on a privacy-enabled chain, migration costs increase significantly. This network effect creates a strong moat for early successful privacy projects. The balance between privacy and compliance is being continuously explored and defined through technological innovation by projects like Rayls Labs. In this new world built by code and law, privacy rights evolve from personal choice to systemic feature, and platforms like Gate provide the key market infrastructure for the circulation of these new assets.