Payy Network Brings Default ERC-20 Privacy to Ethereum

• Payy introduces an EVM-compatible L2 where ERC-20 transfers are private by default using existing wallets like MetaMask.

• A chain-native privacy pool and offchain Privacy Vaults let apps balance privacy, compliance, and transaction visibility.

• Targeting crypto users and fintechs, Payy plans to bootstrap with 100k users and stablecoin partners at launch.

Ethereum’s privacy narrative took a concrete step forward with the launch of Payy Network on Ethereum. Payy announced the rollout of a privacy-enabled EVM layer-2 supporting private ERC-20 transfers by default. The announcement came on Ethereum, involved Payy Network developers, and introduced chain-level privacy without smart contract changes or new wallets.

Payy Network Architecture and Privacy Design

According to Payy, the network operates as a privacy-enabled EVM-compatible layer-2. ERC-20 transfers remain private by default, while existing EVM wallets continue working without modification. Users add Payy Network to MetaMask, then send tokens without exposing transaction details.

Notably, Payy relies on a chain-native privacy pool that holds all ERC-20 assets. Direct transfers occur inside this pool, preserving privacy. However, smart contract interactions trigger withdrawals to fresh addresses. Transaction data then routes to offchain Privacy Vaults.

Payy said Privacy Vaults store transaction data offchain for compliance and analysis. Developers configure these vaults through RPC URL parameters. This structure allows applications to choose privacy levels, ranging from fully private to fully public, based on compliance needs.

Target Users and Network Bootstrapping

Payy identified two primary user groups for the network. Crypto-native users and funds can transfer and trade privately using existing wallets. This approach avoids multiple wallets, centralized exchange loops, or external privacy tools.

Meanwhile, fintech firms and traditional finance entities can move flows onchain while limiting transaction analysis exposure. Payy said these users will onboard through distribution partners.

Additionally, Payy Wallet plans to bootstrap the network with 100,000 users and initial liquidity on launch. Payy also stated that several large stablecoin issuers are day-one launch partners. However, the project has not yet disclosed their names.

Layer-2 Context From Vitalik Buterin

Days before the Payy announcement, Ethereum co-founder Vitalik Buterin addressed layer-2 progress on X. According to Buterin, Ethereum’s roadmap now faces tension between slow layer-2 interoperability and fast mainnet scaling.

He noted that Ethereum’s mainnet continues scaling directly, with lower fees and higher gas limits expected by 2026. At the same time, many layer-2 networks remain short of full interoperability. These developments have reopened discussion around the role and expectations of Ethereum layer-2 networks.