The platforms ether.fi and Hinkal announced a collaboration that seeks to improve user privacy when spending crypto assets using a credit card linked to the Ethereum network.
On ether.fi, a decentralized finance (DeFi) protocol, users can stake, borrow, and offer liquidity. Furthermore, it offers Ether.fi Cash, a self-custody Visa card (virtual and physical).
Hinkal, for its part, is a privacy protocol on chain which uses smart contracts and cryptographic proofs, such as zero-knowledge proofs (ZK), to allow confidential transactions on public networks.
In addition, Hinkal functions as a hot wallet of self-custody hides details such as amounts and origins without revealing the identity of the user.
Both companies they communicated integration on December 12, through its official accounts on X.
Ether.fi offers a card, but without privacy on chain
To use the ether.fi card, the user must deposit funds in a “member vault” (member vault).
Those vaults They are smart contracts that store funds intended to support card payments. They can operate on Ethereum or second layer (L2) networks, such as Scroll.
The “problem” is that Ethereum is a public network. Therefore, anyone can observe in browsers the transfers from a personal wallet to the vault that anchors the card.
That link exposes the call financial graph (financial graph), i.e. the relationship between balance sheets, fund origins and historical movements.
The integration with Hinkal aims to resolve that point. Hinkal works as a shielded wallet (armored wallet), which uses ZK to hide amounts and relationships between transactions.
How does Hinkal bring privacy to the use of the ether.fi Ethereum card?
With this collaboration, the user first deposits funds in the section “shielded pool” of Hinkal, a private fund. Although that initial deposit is visible, the trail is interrupted there.
Then, the user performs a ““unshield” (unshielding) only for the necessary amount to an intermediate public address and, from there, transfer the funds to the vault from ether.fi. The result is that there is no link on chain direct between wallet user’s main and card.
Thus, in Ethereum no direct link is registered between the user’s main wallet (where they can hold funds in staking or DeFi strategies) and the account associated with the card.
By interposing that layer of privacy, the integration reduces the risk that analysts on chain or third parties reconstruct a digital path to a user’s wealth, strategies or economic behavior.
More privacy does not equal anonymity
Now, this protection operates within the scope of the network. But, on the other hand, ether.fi requires KYC (know your customer) to use the platform and issue the carda requirement derived from AML (anti-money laundering) regulations and Visa policies.
This implies that the user’s identity is linked to the account in a way off-chainthat is, outside the public Ethereum registry.
In that sense, collaboration does not offer anonymity, but rather better privacy management on chain. The model allows daily movements not to reveal the size or origin of the user’s capital to external observers.