Is ZEN still a privacy coin after Horizen moved to Base?

Market Trends

24 October 2026

By the traditional definition of a "privacy coin" — where on-chain transactions hide the sender, receiver, and amount by default — ZEN no longer qualifies after moving to Base. It is now positioned as "compliance-friendly optional privacy." Privacy is a feature that can be called at the application layer, not a default property of ZEN transfers themselves. If you transfer ZEN on Base, it is just a regular ERC-20 transfer that is publicly visible.

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What the migration changed: ZEN went from "the coin of a privacy chain" to "fuel for privacy applications"

On July 23, 2025, Horizen completed its migration from an independent Layer 1 to Base, making ZEN an ERC-20 token on Base. The old Horizen mainchain and EON sidechain have both stopped running. This step alone put ZEN's base-layer transfers onto the public ledger of an Ethereum rollup.

But Horizen did not abandon the privacy narrative. It simply moved it to a different place. The project built a Layer 3 application chain on top of Base using the OP Stack, with settlement proofs anchored back to Base and Ethereum. Privacy features were placed at the application and computation layer of this L3, not at the transfer layer of the ZEN token itself.

Horizen Labs CEO Rob Viglione put it bluntly to The Block: almost nothing from the original ZK proof-of-work base layer really carried over into the new architecture. The project's focus shifted from "maintaining a privacy L1" to "building compliance-friendly privacy tools within the Base ecosystem."

What "compliance-friendly optional privacy" actually means

Horizen's privacy core is now something called a Confidential Computing Environment (HCCE), based on TEE (Trusted Execution Environment) hardware to achieve isolated computation. Developers can call this environment inside their applications so that transactions or computation content are not publicly exposed. At the same time, the system supports selective disclosure — regulators can obtain controlled access under specific conditions, rather than having all data fully public.

This is completely different from the logic of old-school privacy coins. Monero or Zcash are hidden by default, and you have to actively choose transparency. Horizen is public by default, and you have to actively choose privacy at the application layer. Moreover, that privacy is designed with an interface for compliance auditing.

Viglione himself admitted that the team removed shielded transactions from the mainnet in 2023 because exchanges like OKX and Huobi were delisting privacy coins at the time. "Being a privacy token two years ago was terrible," he said. The current path is a response to that reality.

What role does the ZEN token itself play now?

ZEN is no longer used for network security, and it is not the gas token of the Horizen L3 either. Fees on the L3 are paid in ETH, USDC, or ZEN, and they flow into a treasury used to buy back and burn ZEN. Its new role is as a governance and value-capture token, similar to Optimism's OP. Staking ZEN is no longer about maintaining consensus but about earning a share of revenue from ecosystem applications.

A research article on KuCoin raised a point worth noting: relying on TEE hardware trust rather than pure cryptography is a compromise Horizen made between performance and practical usability. Only in the third phase of the roadmap does the project plan to replace the current trust model with validity proofs, but that has not been implemented yet.

So, if you care about the "privacy coin" label

If you want anonymous on-chain transfers by default: ZEN is no longer an option in this category. Its ERC-20 transfers on Base are fully public. You need to look at assets like Monero or Zcash that still treat privacy as the protocol's default state.

If you want to use privacy features in DeFi scenarios: Horizen's current direction is to give developers tools to build applications with privacy options in the Base ecosystem. Early applications like DarkSwap (private order execution) and ZENDEX (ZK private DEX) are still in progress. If what you care about is not "whether the coin itself is private" but "whether you can do private operations inside an application," Horizen's positioning makes sense. But you need to check whether that specific application is actually live and whether its privacy features really work.

If you are just holding ZEN and hoping it goes up: then the "privacy coin" label is more of a narrative than a function for you. Horizen's current bet is on the "compliance-friendly privacy" niche — on-chain activity where institutions and enterprises need confidentiality but do not want to escape the regulatory framework. Whether that market exists and whether it can support ZEN's valuation is another question.

Signals worth watching

Horizen's HCCE launched its first version in early 2026. What is worth watching next is whether the second phase of the roadmap, "confidential execution and compliance tools," is delivered on schedule, and whether the third phase's validity proofs can truly replace the current reliance on TEE hardware trust. If phases two and three keep getting delayed, Horizen's "privacy" will remain stuck at a hardware-based compromise, still far from the pure cryptographic trust that its own whitepaper admits it wants to achieve.

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