‍What is Nocturne?‍

A visit to Nocturne’s website presents a very minimalistic UI - one that features only a list of definitions for the term ‘nocturne’, only the third of which refers to the project itself. However, a click through ‘how it works’ lends a little clarity around the project, gritty details for which are yet to emerge…

In short, Nocturne is a novel protocol developed to enable ‘private accounts’ on Ethereum. 

Blockchain is known for its transparency and Ethereum is no different. Blockchain explorer tools, such as Etherescan, have made detailed information about an individual’s financial history and status available to anyone with an internet connection and an inclination.

With Nocturne, Ethereum users can interact with the blockchain ecosystem but maintain privacy over their personal and sensitive information. Via the use of zero-knowledge technology, “Nocturne allows users to deposit or receive funds to private, stealth addresses within the Nocturne contracts”

How Does Nocturne Work?

Nocturne’s whitepaper-style docs are comprehensive for so early a project and give some insight into the impressive architecture that underpins the project.

Put simply, Nocturne is a “private account abstraction protocol”. 

In order for a user to leverage Nocturne’s privacy-preserving functionality, they must first deposit some crypto into Nocturne’s ‘Deposit Manager contract’. For the time being, an offchain party must then approve the funds, deeming the transaction to be below a certain compliance risk threshold. 

This is an initial methodology in order to avoid illicit transactions. However, over time, the process will become increasingly permissionless, with a novel process, known as ‘proof-of-innocence’, at the core of the protocol’s future plans.

Once a deposit has been approved, privacy is preserved by running all transactions through a sole ‘Teller contract’ which bundles private operations before handing them onto the ‘Handler contract’, which carries out all further contract calls and, in doing so, preserves the privacy of the end user.

In reality, the mechanisms that facilitate Nocturne’s impressive functionality are altogether more complex and nuanced and, for those interested, a visit to Nocturne’s documentation should provide further clarity. 

Why All the Excitement?

Aside from offering what appears to be a compelling use case, Nocturne has generated excitement in recent days owing to a very impressive roster of investors that participated in its recent funding round.

Said round saw Nocturne raise a full $6 million to “fund the deployment and continued development of private accounts on Ethereum”. The round featured impressive VC funds such as Polychain Capital, Bain Capital Crypto, Hack VC, and Bankless Ventures.

However, what is especially notable about Nocturne’s cap table is the presence of none other than Ethereum founder, Vitalik Buterin, who has recently proved vocal regarding his academic interest in the future of privacy on Ethereum. 

Though Buterin’s presence on Nocturne’s investor list is exciting, the extent of his involvement in the project’s development is not clear, and well-known founders in the crypto world, such as Nailwal of Polygon and Srinivasan of Coinbase, have sometimes made a habit of throwing angel investments into more projects than it is feasible to count.

Will Nocturne Have a Token?

Tokenomic details, if indeed any are planned, are yet to emerge for Nocturne and, as a result, any discussion of a future token is speculation and speculation alone.

However, we do know that investors such as Polychain Capital have previously invested in token-oriented, rather than equity, investment rounds.

What’s more, the proposed decentralized nature of Nocturne seems to suggest a centralized, profit-making entity is not in-keeping with the project’s decentralized ethos.

The Future of Nocturne

As with an early stage project, Nocturne’s future is far from certain. However, privacy-preserving technology is a topic of increasing interest within the crypto community, and even amongst the founders of Ethereum, and so some excitement around the v1 launch of Nocturne may be justified. 

With some $6 million in available runway, and backing from some of the biggest players in the industry, Nocturne could be set to revolutionize the way we use the world’s biggest smart contract network.