Application-Specific Privacy (e.g., Tornado Cash) vs. General-Purpose Privacy Layers (e.g., Aztec)

Lower user friction: No need for new wallets or complex key management. Users interact directly with a smart contract using their existing Ethereum address. This matters for adoption and composability, as it integrates seamlessly with DeFi apps like Aave or Uniswap for exit liquidity.

Enhanced privacy set & scalability: Leverages rollup technology to batch private transactions, improving cost-efficiency and anonymity sets over time. This matters for institutional-grade privacy where linkage resistance and long-term scalability are critical, beyond a single transaction.

Centralized regulatory risk: As a standalone application, it's a clear target for sanctions (see OFAC blacklisting). Relies on immutable, permissionless contracts which can be censored at the frontend/RPC level. This matters for long-term accessibility and legal risk for users and integrators.

Higher complexity & cost: Requires users to manage shielded addresses and understand note systems. Transaction fees include proof generation costs, making simple transfers more expensive than base-layer options. This matters for user onboarding and micro-transactions where simplicity and low cost are paramount.

Specific advantage: Users pay only for the specific transaction (e.g., deposit/withdraw). On Ethereum, this can be ~$10-50 per private transfer. This matters for high-value, low-frequency operations where per-transaction cost is less critical than simplicity.

Specific disadvantage: Isolated to asset mixing. Cannot execute private DeFi swaps (like on Uniswap) or private lending. This matters for complex dApps that require privacy throughout a multi-step transaction flow.

Specific disadvantage: Reliant on centralized relayers for censorship resistance post-sanctions. Protocol upgrades controlled by a multi-sig. This matters for institutions or protocols requiring long-term, resilient, and compliant privacy guarantees.

Specific advantage: Batched proofs reduce individual user costs. Private transactions can cost <$1 on L2. Native account abstraction enables stealth addresses. This matters for consumer-scale applications requiring frequent, low-cost private interactions.

Specific disadvantage: Requires building within a separate zk-rollup environment or using cross-chain bridges (Aztec Connect). This matters for existing Ethereum dApps looking to 'add' privacy, as it necessitates a significant architectural shift.

Specific disadvantage: Smaller TVL (~$15M vs. Tornado's historical $1B+) and fewer integrated DeFi protocols (e.g., Lido, Element Finance). This matters for liquidity-dependent applications that need deep, readily available private pools.

Focused, battle-tested utility: Optimized for a single function (e.g., token mixing). Tornado Cash has processed $10B+ in volume, proving its security model. This matters for dApps needing a specific, audited privacy primitive without the overhead of a full zkVM.

Limited composability and scope: Privacy is siloed to the specific asset (ETH, DAI) and function. It cannot be used for private DeFi, voting, or gaming logic. This is a major constraint for protocols building complex, interconnected private applications.

Programmable privacy for complex logic: A zk-rollup with a privacy-first zkVM (e.g., Noir). Enables private smart contracts for DeFi (zk.money), voting, and gaming. This is critical for CTOs building new privacy-native applications that require custom business logic.

Higher complexity and cost: Developing with a zkVM (Noir) requires specialized skills. Transaction fees are higher than base-layer mixing, and the ecosystem is younger. This is a barrier for teams seeking a simple, plug-and-play privacy solution for a single feature.