0xbow has released Privacy Pools v2, expanding its privacy protocol beyond simple deposits and withdrawals into a broader set of shielded payment and asset-management features. The upgrade is live on Ethereum, Arbitrum, Base, BNB Chain, Citrea, OP Mainnet, and Robinhood Chain.

The new version adds private transfers, lending yield on shielded deposits through Aave, and LI.FI-powered private swaps. At the same time, 0xbow says the protocol keeps the same compliance framework it used before, with screened deposits required for private use but unrestricted public exits still available.

From mixer-like flows to ongoing private balances

According to 0xbow, the v2 release is meant to make Privacy Pools function more like a private account than a tool used only to move funds in and out. Once assets are shielded, users can now send payments to any EVM address without publicly exposing the sender, the recipient, or the amount to outside observers.

The protocol also supports payment requests through a shareable link. In practice, that means neither side needs to exchange a wallet address directly in order to complete a transaction through the system.

Yield and swaps added inside the pool

One of the main additions in v2 is the ability for pooled deposits to earn lending yield through Aave while remaining inside the privacy pool. 0xbow also said it has removed deposit fees for every asset that has a yield-bearing pool.

The release also introduces private swaps through an integration with LI.FI. 0xbow says users can enter the system with nearly any asset, swap while inside the pool, and withdraw into a different token or even on another chain.

Compliance checks remain part of the model

Despite the broader feature set, 0xbow has not changed the protocol’s core compliance design. Its Association Set Provider, or ASP, still has to approve a deposit before that deposit can be used privately, and that approval can later be revoked.

At the same time, the company says the system does not require KYC and does not use a viewing key. Users can also leave the pool publicly without permission through what 0xbow describes as a “ragequit” exit.

Wallet integrations and the next rollout steps

0xbow said every feature in Privacy Pools v2 is available through its SDK, allowing wallets and payment applications to integrate the protocol directly. A Rust SDK is planned for the fourth quarter.

The Ethereum Foundation’s Kohaku wallet-privacy initiative is integrating the system, and Ambire is among the first wallets to support it. In explaining the broader aim of the upgrade, 0xbow argues that shielded funds have often remained idle in past privacy systems, which has limited anonymity set growth. By letting deposits stay private while also earning Aave yield, the project is positioning v2 as a way to keep more capital inside the pools for longer.

Source: www.bankless.com