The privacy team from the Ethereum Foundation (EF) has spun off into a commercial entity called EthSystems. The project will focus on implementing blockchain solutions for institutional clients.
The startup is backed by Ethereum co-founder Joseph Lubin, along with companies BitMine and SharpLink. The founders are former EF employees Mo Jalil, Oscar Toren, and Aryaman Challani, who previously worked in the foundation's institutional privacy group.
EthSystems plans to create tools based on zero-knowledge proofs. These solutions will enable banks and asset managers to conduct large transactions on the Ethereum network while keeping trade positions and client data confidential.
The company's business model is based on paid consulting and custom system development. EthSystems representatives explained that large businesses require a commercial counterparty for collaboration, rather than a non-profit foundation. However, the startup will continue to publish protocol specifications publicly.
“Privacy is not just an option; it’s a key requirement. Without data protection, large financial organizations will not transition to blockchain,” said EthSystems CEO Jalil.
Before its public launch, the team worked on open-source code for a year. Developers have already introduced protocols for private transfers, bond issuance, and identification systems.
The project launch comes amid a significant restructuring of the Ethereum Foundation. Last month, the foundation reduced its staff by 20% and redistributed resources across five main areas. Alongside EthSystems, other independent entities have emerged in the ecosystem, including EthLabs and Ethereum Institutional.
It’s worth noting that in June, a proposal was published at the Ethereum Research forum to redirect up to 10% of rewards for validators from staking to fund the ecosystem.