Call for Applications: Privacy at Bitcoin's Base Layer

Developers and contributors working on Bitcoin, nostr, and adjacent freedom tech can apply for a grant at any time, and our board reviews proposals on a rolling basis.

Twice a year, in the spring and fall, we plan to highlight a focus area where we would like to see strong proposals. This spring, the focus is on privacy at Bitcoin's base layer.

Privacy on Bitcoin matters for the same reasons it matters anywhere else. People accepting bitcoin for their work, running a small business, donating to causes, or saving for the future reasonably expect the same kind of day-to-day financial privacy they would get from traditional banking tools. As Greg Maxwell put it back in 2013:

"Traditional banking provides a fair amount of privacy by default. Your inlaws don't see that you're buying birth control that deprives them of grandchildren, your employer doesn't learn about the non-profits you support with money from your paycheck, and thieves don't see your latest purchases or how wealthy you are to help them target and scam you. Poor privacy in Bitcoin can be a major practical disadvantage for both individuals and businesses."

There are real privacy gaps on-chain today. Much of that sits in wallet behavior and transaction construction, which makes it a great area for open-source development to improve the experience for users.

A lot of privacy work supported by OpenSats has already happened at higher layers of the bitcoin stack. For example, on Layer 2, grantees have advanced BOLT12 offers and receiver-side privacy for Lightning payments, and on Layer 3, grantees building Cashu, Nutshell, Minibits, Fedimint, and related projects have turned Chaumian ecash from research into production infrastructure. That work will continue.

Base-layer work is where privacy improvements carry the furthest. For instance, every on-chain transaction that uses Silent Payments instead of reusing addresses, uses collaborative transaction methods such as Payjoin, or opens Lightning channels, raises the baseline privacy of everyday users with minimal change, if any, to how they already transact. We would like to fund more of this type of work.

There are several Layer 1 privacy-centric projects that already receive OpenSats support, including Payjoin Dev Kit and Async Payjoin, Silent Payments, Coinswap, JoinMarket NG, Floresta, ASmap, and Bitcoin Core P2P privacy and node-fingerprinting research. Foundational libraries like rust-bitcoin and BDK are the basis of much of this privacy work, alongside the Kyoto light client project, which implements BIP 157 and BIP 158 compact-block filters that Silent Payments and other privacy tools rely on.

This spring, we would especially welcome proposals that extend and improve Layer 1 work mentioned above, as well as new projects taking fresh approaches to on-chain privacy. That includes deeper integration of existing techniques into widely used wallets, research and tooling that strengthen the surrounding ecosystem, and ideas we have not yet considered.

Strong applications are clear about the problem being addressed, the users being served, and a concrete plan for getting there. If your project improves base-layer privacy in Bitcoin and is free and open source, please consider submitting a grant application.

Applications go through our standard process: a concise proposal reviewed by our board on technical merit, potential impact, and ability to execute. Our Application FAQ covers review timelines, budget guidance, reference letters, and other common questions.

Grants awarded to Bitcoin Layer 1 privacy projects will be sourced from our General Fund. If you would like to help us fund more privacy work on the base layer, please consider making a recurring donation.