September 26, 2025|Anonymous

Enhancing DeFi Privacy with Stealth Addresses and Efficient ZK Proof Verification

In the privacy-centric evolution of decentralized finance (DeFi), protecting user identities and transaction details is paramount. Unwallet, a innovative project focused on stealth addresses for private DeFi, has emerged from zkVerify's Verified Hacker House in Vietnam as a key partner. By integrating zkVerify—a specialized blockchain for high-performance ZK proof verification from Horizen Labs—Unwallet can now verify its privacy-preserving proofs on-chain efficiently. This collaboration, born from the August 2025 hacker house event, demonstrates how zkVerify supports emerging projects in delivering end-to-end anonymity for DeFi transactions while cutting verification costs.

What is Unwallet and Why Does It Matter?

Unwallet is a privacy-focused protocol that addresses the traceability issues in cryptocurrency transactions, where public blockchains expose sender, recipient, and amount details, enabling unwanted analysis and linking back to users. Traditional solutions like basic transactions, standalone privacy pools, or stealth addresses leave gaps, such as visible identities or traceable connections. Unwallet solves this with a dual-layer system combining privacy pools (to obscure senders) and stealth addresses (to hide recipients), achieving up to 95% overall privacy.

Built during the Verifiable ZK Hacker House Vietnam Hackathon, Unwallet won 2nd prize for the best privacy use case. It enhances user security by routing funds to multi-signature Safe wallets at stealth addresses, allowing programmable logic without compromising anonymity. This is crucial in DeFi, where privacy gaps can lead to surveillance, targeted attacks, or regulatory hurdles, making Unwallet a vital tool for users seeking true financial sovereignty.

The zkVerify Integration: Enabling Scalable Proof Verification for Privacy Protocols

zkVerify acts as a modular settlement layer optimized for ZK proofs, supporting various schemes and reducing verification costs by up to 90% compared to platforms like Ethereum. Following their participation in zkVerify's Hacker House in Vietnam last month, Unwallet has partnered to send its ZK proofs for on-chain verification via zkVerify. This integration leverages zkVerify's network for tamper-proof validation, allowing Unwallet to focus on privacy generation while offloading the heavy lifting of verification.

Unwallet deploys a custom Safe stack on the Horizen testnet to generate deterministic stealth addresses, incorporating ZK proofs for anonymous operations. Proofs are generated during mixing in privacy pools and stealth address computations, then verified efficiently on zkVerify, ensuring scalability for high-volume private transactions.

The Use Case: Proving End-to-End Anonymity in DeFi Transactions

Unwallet uses ZK proofs to cryptographically validate private transactions without revealing underlying data. Specifically, the proofs attest to:

•
Anonymous Withdrawals from Privacy Pools: Confirmation that funds were mixed and withdrawn correctly, hiding the sender's identity and obfuscating amounts through uniform deposits.
•
Stealth Address Integrity: Proof that a unique, unlinkable address was generated for the recipient, controllable only by them, with no ties to previous transactions.
•
Safe Wallet Functionality: Verification of secure fund routing to multi-signature wallets, enabling features like transaction guards while maintaining privacy.
•
Overall Transaction Unlinkability: Assertions that no metadata links sender, recipient, or amounts, providing comprehensive anonymity.

These proofs are now verified on zkVerify, which serves as the neutral layer for settlement. For example, a sender deposits into a pool, generates a stealth target, and withdraws anonymously; the recipient monitors and accesses funds privately—all backed by ZK-verified integrity.

The Value to Users: Robust Privacy Without Performance Trade-offs

For DeFi users, developers, and privacy advocates, this partnership offers substantial benefits:

•
Superior Anonymity: The dual-layer system protects against chain analysis, surpassing single-method approaches and reducing risks of doxxing or tracking.
•
Enhanced Security: Integration with Safe wallets adds programmable safeguards, like multi-sig requirements, in a private context.
•
Efficiency and Cost Savings: zkVerify's optimized verification makes private transactions affordable and fast, encouraging broader adoption.
•
User-Friendly Experience: Senders and recipients handle privacy seamlessly, with tools for monitoring and managing stealth funds without exposing identities.
•
Innovation Catalyst: Born from the hacker house, this tie-up inspires more ZK privacy projects, fostering a DeFi ecosystem where anonymity is standard.

In essence, it empowers users to engage in DeFi with confidence, bridging the gap between pseudonymity and true privacy.

Looking Ahead: The Future of ZK-Driven Privacy in DeFi

The Unwallet-zkVerify collaboration, sparked at the Vietnam Hacker House, underscores zkVerify's role in nurturing and scaling ZK innovations. As Unwallet evolves, potentially expanding to more chains, zkVerify's support will ensure verifiable privacy remains accessible. Developers interested in similar builds can explore zkVerify's hackathons and docs for inspiration.