Obscuro has launched its decentralised Ethereum protocol designed to achieve data confidentiality while maintaining the benefits of an open blockchain network. In doing so it aims to open up a new world of use cases on Ethereum such as private NFTs, dark pool trading, gaming, sealed auctions, KYC and more.

Obscuro was incubated by global enterprise software firm R3 and was recently spun out as a separate entity, based in London. It is helmed by CEO James Carlyle, who was central to the development of the Corda and Conclave platforms in his previous role as Chief Information Officer at R3.

Obscuro uses R3’s confidential computing expertise to enable a decentralised network of nodes to process regular Ethereum contracts in an encrypted space. This enables Dapps to ensure confidentiality for users and their transactions and allows smart contracts to keep secrets. 

Obscuro seeks to benefit both retail and corporate users. Many retail users enjoy the benefits of DeFi but find that they've taken advantage of by Ethereum miners or stakers, who are able to observe their transactions and front-run those which represent profitable trades. Others are keen to use DeFi but won't until it provides the same privacy guarantees that traditional finance does. 

For corporate users, the privacy of sensitive trading details between counterparties is not a nice to have, it's mandatory. So far, corporates have been slow to transact on Ethereum, despite the attraction of its innovation culture, and Obscuro believes that making an Ethereum network confidential will unleash a new category of business Dapps.

Obscuro also provides a solution for Dapps that simply can't work if the smart contracts don't hold secrets. Until now, Ethereum contracts have had autonomy and agency; it's possible for end-users to send Ether and ERC20 token values to a smart contract, and this contract determines how to distribute that value. With Obscuro, contracts now also hold secrets in the way human agents can and have the power to surprise users. 

For example, an Obscuro contract can determine if an NFT can "shape-shift" or change shape based on external events such as a full moon, or be used to manage the game board of an interactive game in a way which prevents players from "seeing around the corner" or otherwise cheating.

Obscuro is community-driven and open-source. It uses a decentralised DAO governance model and a utility token to allow users to pay decentralised network node operators. The team is currently building the distributed software needed for a developer test net and hopes to launch an alpha production network by the end of the year, along with a Swiss Foundation to provide governance for the network.

James Carlyle, CEO of Obscuro, commented: 

"After months of hard work behind the scenes the Obscuro team is thrilled to be embarking on this journey, and is keen to engage with all app builders to understand the benefits of bringing privacy to existing and new Dapps on Ethereum."