Confidentiality for the Programmable Economy

The Arbitrum Platform powers the programmable economy, where markets, transactions, and business processes run in software. As enterprises and financial institutions move client activity, treasury operations, and trade flows onchain, confidentiality becomes a practical requirement. 

Arbitrum provides a practical confidentiality model for businesses to decide what stays private and how information is shared across their environment. In practice, that can include:

• confidential transaction flows
• protected visibility into operational data
• selective disclosure for auditors, regulators, or approved counterparties
• restricted reporting and review without making activity broadly visible

How it works

Confidentiality on the Arbitrum Platform is applied at the level where a business needs selective disclosures. A team can keep confidentiality scoped to a specific application workflow, extend it to interactions with existing onchain products, or apply it more broadly through a dedicated chain environment.

The process starts by defining the information that should remain private. That scope can include customer transactions, treasury activity, account balances, internal transfers, reporting data, or specific product features. The business then defines which parties get access and how those parties access. Access can be limited to approved users, counterparties, internal teams, auditors, regulators, or other permitted reviewers.

Arbitrum supports those operating requirements in a few practical ways. Some businesses only need to protect a specific workflow, such as a payments flow, an internal settlement process, or treasury movement. Others need users to interact more privately with familiar onchain products such as trading venues, lending markets, or tokenized asset products. For stricter requirements, businesses can launch a dedicated environment where confidentiality applies more broadly across transaction activity and business data. This gives businesses a way to keep sensitive activity out of public view without losing the oversight required for audit, reporting, and day-to-day operations.

What businesses can configure

Application-Level Confidentiality

Businesses can protect specific workflows inside an otherwise standard product experience. This is useful when only part of the product needs to remain private, such as treasury transfers, internal settlement, or a customer-facing payments flow.

Confidential Interactions with Public Apps

Businesses can let users interact more privately with familiar onchain apps, such as trading venues, lending markets, or tokenized asset products. This helps reduce unnecessary exposure of user activity while preserving access to established market infrastructure.

Network-Level Confidential Execution

For stricter requirements, businesses can configure a dedicated chain environment where confidentiality applies more broadly to transaction activity and business data. This is useful when institutions need stronger protection for client activity, trade flows, balances, or internal operations.

Selective Disclosure

Businesses can control how information is shared with specific stakeholders, including auditors, regulators, internal review teams, or approved partners. Instead of exposing activity by default, teams can disclose only the records or views each party needs.

Privacy-Preserving Audit Visibility

Businesses can preserve oversight without making sensitive activity broadly visible. This supports private review, operational monitoring, and restricted reporting, so teams can confirm what happened without exposing more information than necessary.

Confidentiality lives inside the platform

For enterprises and financial institutions, confidentiality is part of what makes meaningful onchain business possible. It gives businesses a way to protect sensitive financial activity, limit unnecessary exposure, and maintain the visibility required to operate with control.

On the Arbitrum Platform, businesses can fine-tune access permissions to keep sensitive activity private, decide who can see what, and share information in a controlled way as requirements change. This gives institutions a clearer path to bring financial products onchain without putting sensitive business activity on public display.

Frequently Asked Questions

Who can still see the data?
If you’re deploying an application on the public Arbitrum One chain, you can build applications that keep activity confidential from the public while still allowing approved operators or authorized stakeholders to access key information. If you deploy a dedicated blockchain, you can choose to keep contracts public and reduce exposure of user identity and transaction origin during interaction. Alternatively, a dedicated blockchain can also be designed with confidentiality across the entire network.

What exactly can be kept confidential?
Depending on the confidentiality model you build with, data privacy can apply to balances, transaction flows, counterparties, user identity during contract interaction, smart contract logic, or state data. Arbitrum also offers the ability to make selective disclosures, so approved operators, auditors, regulators, or internal teams can access the information required for oversight without exposing sensitive activity to the broader market.

Are products with data confidentiality EVM-compatible?
This depends on which supported model you build with. Confidentiality applied on public applications can preserve more compatibility with standard EVM tooling and smart contracts. Alternatively, fully confidential blockchains may require additional configuration to achieve EVM compatibility.

What’s the difference between Zero-Knowledge proofs, FHE, and TEE?
Zero-Knowledge proofs (ZK), Fully Homomorphic Encryption (FHE), and Trusted Execution Environments (TEE) represent different methods for protecting data privacy. ZK allows a party to prove a statement is true without revealing the underlying sensitive information; FHE enables complex calculations to be performed directly on encrypted data without ever decrypting it; and TEEs use specialized hardware to create a secure "enclave" where data is processed in isolation from the rest of the system. In short, ZK focuses on verification, FHE on mathematical privacy during computation, and TEE on hardware-level isolation.

What is available on Arbitrum today?
Today, confidentiality can be applied to applications on Arbitrum One or on your custom blockchain using standard tooling provided by third parties. Though not live yet, alternative data confidentiality models are being designed for dedicated blockchains and will depend on the architecture and deployment requirements of your product.