Vintage privacy project Horizen relaunches as Layer 3 on Base
Horizen has officially deployed its mainnet on Base, completing the latest phase of the storied privacy-focused network’s evolution.Although the launch on Tuesday comes amid a moment of renewed attention in so-called privacy coins, Horizen officially began its transition from a Layer 1 to Layer 3 in February, following a decision by the DAO to deprecate the legacy blockchain. In some sense, the relaunch represents less of a technological feat than a rare governance victory by a lesser-known project. Horizen Labs CEO Rob Viglione told The Block that very little of the original ZK-powered proof-of-work base layer is actually migrating into the bespoke proof-of-stake appchain, though the development process has been successful in reigniting a community and brand after nearly nine years."There's value in having a project that follows through and isn't always shifting to the next thing and launching and shutting down and so forth, and actually having continuity and grit," Viglione said in an interview. "That's what we have. It's a unique thing in the market to see an OG 2016 project migrating into something very modern, very relevant, and actually keeping its DNA."Launched in 2017, initially as ZenCash, the project has gone through several lifecycles — including a rebranding to Horizen in 2018, the development of the Zendoo sidechain framework in 2020, and the launch of its EVM sidechain EON in 2023. Now, the project is aiming to make privacy a "practical option" for developers and users on Base, the increasingly popular Layer 2 network supported by Coinbase. Over the next five years, Horizen Labs is expected to run a 100 million ZEN developer funding program to fund application and tooling projects — from confidential financial services to "GambleFi and SocialFi."'Reg-compliant' privacy Like other "reg-compliant" privacy crypto projects, Horizen practices the code of "selective disclosure," meaning that onchain transfers, swaps, and identity features should have opt-in privacy without eliminating regulatory oversight. "We've chosen to pivot towards what we consider a trillion-dollar market, regulatory-compliant privacy," Viglione said. "There's just no way that the U.S. government and others are going to allow completely unbounded, uncontrolled financial flows globally. There's a limit to scale on that."Viglione, a self-described cypherpunk enthusiast, noted that there is a place for fully anonymous crypto and that the industry appears to be going through a "re-awakening that privacy is important." However, true mass adoption requires "integrating into the rest of the world as it is, not trying to change the world."This is a lesson Horizen has learned along the way. Another part of Horizen's evolution occurred in 2023, while facing global regulatory backlash, when the team removed support for shielded transactions on its mainnet. The move was a pragmatic reaction to exchanges like OKX and Huobi delisting privacy coins. "It sucked to be a privacy token two years ago," Viglione said.The newly relaunched ZEN token, initially tradable via the Base-based instances of Aerodrome and Uniswap, is now supported by centralized exchanges including Binance, Bitget, ByBit, Coinbase, and OKX, among others. Grayscale has also long offered a ZEN trust. But compliance doesn't necessarily have to come at the cost of cryptographic advancement. As part of its roadmap, Horizen is rolling out next quarter its Confidential Compute Environment that uses trusted execution environments (TEEs) for isolated computation to power anything from simple private payments to "jurisdictional import modules."Although just a proof-of-concept, Viglione said Horizen Labs is building a middleware solution with a plug-and-play "authority mechanism" and threshold multi-sig where developers can import "specific modules per jurisdiction and use case" in their applications that meet local regulatory needs — like the ability to reveal or shield certain financial data to authorities.Execution layerViglione noted that Horizen's transition to a Layer 3 — a pure execution layer that derives its security from its Layer 2 — has meant that the approximately 70-person Horizen Labs can refocus on things like middleware and the "value-add above and beyond the commoditized elements" of a chain. "We used to do everything from scratch, and that's why we just used to historically move really slow," Viglione said. "We'd build wallets, we'd build explorers, we used to build all the useless stuff. Useful, but things that the industry has evolved to be able to handle with third parties."To this extent, Horizen has partnered with a host of infrastructure providers, like rollup-as-a-service platform Caldera, cross-chain messaging platform LayerZero, data oracle Stork, and the Safe-based multi-sig wallet platform Den, among others. Its bridge to Base uses LayerZero's Stargate software. Viglione noted that the "easiest path" for Horizen would have been to launch as an Arbitrum Orbit chain, given the team's history building the Bored Ape-branded out ApeChain with Offchain Labs. "We decided to make more of a business decision than a technical decision, and we really wanted the distribution of the Coinbase ecosystem," he added. Additionally, the Horizen DAO also felt "long-term value alignment" with Coinbase CEO Brian Armstrong and Base creator Jesse Pollak, who've been "signaling quite hard recently their support for privacy," including the acquisition of another proof-of-work privacy project Iron Fish, Viglione noted. Despite existing for nearly a decade, Horizen has relatively few venture capital backers — the project raised $4 million in a 2019 seed round led by Digital Currency Group and an additional $7 million round in 2021, a paltry sum compared to many "alt Layer 1s" today. ZEN, as a "fair launch" proof-of-work token capped at 21 million, also found wider distribution through mining, meaning, theoretically, the project is less beholden to monied interests. When conversations between DAO members began over a year ago, they realized there was a "unique opportunity" to become a "multi-faceted privacy hub" for what was emerging as the fastest-growing Ethereum Layer 2 — eventually "getting to the point where any app in the Base ecosystem could just toggle a privacy button, as an example, and have those transactions routed through our platform," Viglione said. Viglione also said that this transition could have happened earlier, given that Horizen and Base have shared an early team member, but that at the time it felt like a "cheapening of our brand." However, with the hindsight of relaunching a token and deprecating the Horizen base layer and its sidechains, there's a certain quietude in knowing that product-market fit cannot always be timed. "We could have been an L2. We could have been an L1. The point is to lump everything related to privacy into one environment, and to be tightly bound to the liquidity and distribution Base — hence being one layer above it," Viglione said.Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.