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RAILGUN On-chain Privacy System Review

Railgun on-chain privacy system review 2023.

What is RAILGUN?

RAILGUN is described as a privacy system that is built directly on-chain for different blockchain networks including Ethereum, Polygon, Arbitrum and Binance Smart Chain. 

The tech leverages Zero-Knowledge (ZK) cryptography in order to make arbitrary smart contract calls possible. RAINGUN does all this in a completely private manner, making it possible for users to enjoy the security of their preferred blockchain. 

Since RAILGUN is built on-chain, it achieves privacy without relying on a separate Layer-2 validator set or a custodial bridge. 

Use cases of RAILGUN & benefits

RAILGUN is designed to serve those who wish to trade, earn, and access DeFi in a private way. Some other potential use cases of RAILGUN include:

  • Alpha Protection – helps traders that wish to keep their alpha secrets meaning that they can trade feely and maintain their informational edge. RAILGUN is expected to be popular in performing darkpool-style trading since it ensures that users’ strategies cannot be copied or counter-traded.
  • Private Payroll – helps entities that want to make payments in cryptocurrency without revealing employees’ exact salaries. Also those looking to build shielded balances so that others cannot know the specifics of their holdings stand to benefit. 
  • MEV Advantage: helps builders of Maximal Extractable Value (MEV) searchers who want to keep details of arbitrage opportunities they find private. 
  • Censorship Resistance: helps those who wish to donate freely of censorship from corrupt legacy systems. 
  • Anonymized Analytics: help to counteract services like Nansen or Etherscan, where notable wallets are labelled or known, making some whale targets. It also means that those whose wallets are tracked can also enter into new coin investments without alerting trackers. 
  • Compliance: helps financial companies remain compliant with data protection laws such as GDPR. 
  • Advertiser Shield: RAILGUN can also help keep DeFi transactions invisible to advertisers or fraudsters looking to target individuals with particular interests. 

Shielding Tokens

RAILGUN is intended for privatizing digital assets through shielding – a process whereby funds enter the wallet’s private 0zk address from the public 0x address. Once funds are in the 0zk address, users can send, swap, and interact with DeFi in a private manner. In addition, any token that exists on the public blockchain can essentially be shielded, which would include any ERC-20 token as well as ERC-721 NFTs.

In order to initiate shielding, a user can send a shield transaction which typically contains public data (the asset, the amount, and other values called) from their public wallet. The RAILGUN smart contracts then effectively take those values and compute commitments (called notes). Notes are generally hashed values of the public data that is sent by the user at the beginning of the shielding process. The hashed value of a note (a circuit output) can’t be reversed in order to uncover the original value (an input). Therefore, inputs and outputs in this context are the transaction or asset data which a RAILGUN user wishes to obscure.

RAIL Token Overview

RAIL is the governance token for RAILGUN. It is available on Ethereum, Polygon, BSC and other chains.  RAIL liquidity is available on decentralised marketplaces such as Sushiswap and Uniswap, with the best routing available through Matcha.

Users can also stake RAIL in order to vote on governance proposals such as protocol upgrades and shielding/unshielding fees. Anyone who stakes RAIL becomes a member of the RAILGUN DAO.

Contract Addresses

Ethereum: 0xe76c6c83af64e4c60245d8c7de953df673a7a33d


BNB Smart Chain: 0x3F847b01d4d498a293e3197B186356039eCd737F

RAILGUN Wallet & DEX Swaps

RAILGUN’s partner project Railway Wallet has a built-in swap integration (the Railway DEX). This is meant to empower DeFi swaps in a private and secure way. Railway DEX is actually built on the 0x API which is built by the creators of the Matcha exchange and this help users find the lowest slippage and best prices for their trades. 

When the best trade route is discovered, the Railway Wallet is able to generate a proof to extract the particular token that is being sold from the user’s private balance. It then swaps the tokens using the 0x API and shields the resulting tokens back into the private balance.

Some of the tokens which users can shield include DAI, USDC, wBTC, MATIC, LINK, etc. 


Protocol Fees

For simply Shielding and Unshielding, the protocol charges or takes a 0.25% fee per transaction. This fee is collected by the DAO treasury and subsequently distributed over time to RAIL stakers in the form of Active Governor Rewards.

The Protocol does not charge any other extra fees other than the shield or unshielding fee.

Relayer Fees

In order to make use of RAILGUN, users can pay a Relayer for facilitating their transactions (users can self-relay transactions if they want to save on fees). Relayers charge a percentage premium of the overall gas price for the transaction and not the transaction amount. It’s important to note that Relayer Fees do not increase with transaction size.

RAILGUN transactions are gasless which means that users do not need ETH/MATIC/BNB in order to send transactions once assets are shielded. Relayer fees actually contain the underlying blockchain’s gas fee converted to whatever asset users are transacting in. For example, if a user is sending DAI on the Ethereum blockchain, then the Relayer Fee (which also contains the blockchain transaction gas fee) is paid entirely in DAI and the user does not need to hold or spend ETH in their 0zk address.

Relayer Fees vary depending on:

  • What chain a user is running RAILGUN on;
  • The gas price at the time the transaction is executed; and
  • What percentage of the gas fee Relayers decide to charge as an additional premium.

How to Stake Rail 

Users can stake RAIL in order to earn Active Governors Rewards, vote on proposals, or delegate their voting power. Once staked, there is a 30-day unlock period, during which a user will have no voting power nor will they earn rewards.

Steps to stake RAIL:

Purchase or hold RAIL in your MetaMask. 

Head to the staking portal.

Connect your MetaMask.

You can enter the number of tokens you wish to stake.

Then you can proceed to pay the gas fee.

Once staked, you can visit the delegation page and check your voting power, etc.

RAILGUN users can be at ease knowing that their wallet addresses and all other identifiers are removed from transactions, where that information was previously available for anyone inclined to snoop. RAILGUN users therefore can enjoy privacy when trading using leverage platforms, when adding liquidity and even when interacting with Decentralized Applications (dApps).

RAILGUN is a new privacy technology with multiple use cases. It is important for any user to ensure that they use the technology in a legal and compliant way. Conducting your own research before using this tech is essential to ensure user safety and compliance within your jurisdiction. 


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