Ethereum developers are refining a zero-knowledge protocol designed to bring stronger privacy guarantees to on-chain interactions, starting with a “Secret Santa”-style matching system that could evolve into a broader toolkit for private coordination.

Solidity engineer Artem Chystiakov resurfaced the research on Monday in an Ethereum community forum post, pointing to work he first published in January on arXiv.

The idea aims to recreate the anonymous gift-exchange game on Ethereum, where participants are randomly matched without anyone learning who is sending to whom.

Doing that on a transparent blockchain, however, requires solving several long-standing issues around randomness, privacy and Sybil-resistance.

Chystiakov said the core problems are straightforward: “Everything on Ethereum is visible to everyone,” blockchains do not provide true randomness, and the system must prevent users from registering multiple times or assigning gifts to themselves.

The proposed protocol uses zero-knowledge proofs to verify sender–receiver relationships without revealing identities, and a transaction relayer to submit moves so individual wallets cannot be linked to actions.

In the proof-of-concept, participants register their Ethereum addresses in a smart contract and commit to a unique digital signature, which blocks duplicate entries. Each participant then submits a random number to a shared list through the relayer.

Because the relayer broadcasts the transactions, no one can tell which address contributed which number. Receivers encrypt their delivery details using these shared numbers, ensuring only their assigned counterpart can decrypt them.

A participant then selects someone else’s random number, completing the matching. At that point, the protocol reveals the identity of the receiver only to the person assigned as their “Santa,” keeping the rest of the network blind to the pairing.

The work slots into a broader push to design privacy frameworks for Ethereum as crypto systems increasingly intersect with regulated finance.

Zero-knowledge layers of this type can be adapted to anonymous voting, DAO governance, whistleblower channels where employees must prove membership without exposing themselves, and private airdrops or token distributions that avoid revealing who received what.