EthCC9: Interview with 0xbow (Privacy Pools) — Compliant Onchain Privacy

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0xBow is an innovative platform for compliant on-chain privacy in DeFi, allowing users to deposit and withdraw assets anonymously, while a committee reviews transactions to ensure that only “clean” funds are permitted in the privacy pools. Each user instance operates non-custodially and autonomously, monitoring transactions around the clock, ensuring regulatory compliance, and keeping full control in the hands of the user at all times.

I have interviewed Mike McCabe, product lead at 0xbow (Privacy pools) at EthCC9 in Cannes.

Mahsa: Can you tell me a little bit about yourself? How did you end up in the blockchain industry?

Mike: It’s been a bit of a winding road, honestly. I made my first investments back in 2016 or 2017 without really knowing what I was doing at all — and, unsurprisingly, that went to zero. So I stepped away from the space for a while.

At the time, I was doing my master’s degree in Environmental Resource Management. I became really interested in renewable energy and the kind of new energy grid infrastructure we would need to support it. The current energy grid is basically a one-way highway, right? You have one centralized generator sending electricity through a one-way system to all the houses.

But with the rise of renewables, suddenly you have solar panels, wind turbines, batteries — all these decentralized sources feeding energy back into the system. The grid is no longer a simple highway; it becomes a complex network of interconnected participants. And that creates huge bottlenecks and coordination challenges for existing infrastructure.

That’s when I started thinking: maybe blockchain technology could actually help solve some of these problems. So I decided to write my thesis on it. I started researching companies that were exploring blockchain applications in energy, and eventually I ended up working with Shell. At the time, Shell was doing a lot of blockchain research and experimentation, and they supported me throughout my thesis.

Afterward, I joined the Shell blockchain team, which was an incredibly interesting experience. I can honestly say that Shell was exploring some really innovative blockchain applications. It gave me exposure to the institutional side of the industry and showed me how large enterprises think about adoption.

Fast forward about two and a half years — I had proposed several blockchain solutions internally to different business units within Shell, and the feedback was often very similar. People would say: “This is interesting, this is useful, and we can even see how this could become profitable. But why would we ever use a public blockchain as a company?”

That’s when you start recognizing the gap. If blockchain adoption is ever going to become truly widespread among institutions, privacy is essential. Institutions need privacy.

Around that time, I started speaking with Amin, who was already involved in MolochDAO and had strong ties to the privacy ecosystem. Then the idea of Privacy Pools emerged, and I decided to go on this crazy adventure with him. So yes — definitely a weird and winding road, but I’m very happy to be here.

Mahsa: Can you tell me a little bit more about Oxbow? What exactly is the project focusing on?

Mike: At its core, Privacy Pools V1 is essentially a follow-up to Tornado Cash. Tornado Cash set a major precedent in the privacy space, but it also made many builders afraid to work on privacy solutions because of everything that happened afterward.

So after that entire situation unfolded, Amin realized that it should still be possible to build privacy infrastructure — but in a compliant way. The idea was to create a privacy pool similar to Tornado Cash while designing it in a way that keeps bad actors out.

He ended up co-authoring a research paper together with Vitalik Buterin and Chainalysis on how compliant privacy pools could work. Privacy Pools V1 is essentially the implementation of that idea. Vitalik was actually our earliest investor. We were extremely happy to have him onboard, and his support has been instrumental for the project.

Mahsa: Was there a specific moment when the idea for Oxbow was born?

Mike: Definitely. As I mentioned earlier, this really happened right after the Tornado Cash verdict. Amin had always understood how important privacy is. Tornado Cash was excellent at providing privacy for users, but it lacked sufficient control mechanisms, which unfortunately allowed bad actors — hackers, scammers, money launderers — to abuse the protocol.

In response to that entire situation, the Privacy Pools whitepaper was written. The goal was simple: build a compliant privacy protocol.

And if you fast-forward to today, I think our thesis has largely been validated. Almost every privacy protocol now talks about compliant privacy in some form. We’re currently launching Privacy Pools V2 on testnet this week, and we’re incredibly excited about it.

Mahsa: Have there been any major updates, partnerships, or advancements since last year that you’d like to share?

Mike: Privacy Pools V1 was intentionally relatively simple. Users could deposit and withdraw funds, but functionality was still limited. Technically speaking, the privacy mechanism itself wasn’t entirely new — Tornado Cash already introduced that concept back in 2020.

The real innovation in V1 was the compliance layer we built on top of it. Specifically, the ability to exclude bad actors from the protocol even after they deposit funds, preventing them from gaining privacy benefits. That system has now been live for around a year.

During that time, we focused heavily on validating whether the compliance mechanism actually works — and we believe it does. So in parallel, we started building Privacy Pools V2, which is where the really exciting innovation begins.

Now we’re not only building compliant privacy infrastructure; we’re also aiming to build the best privacy protocol in the market overall. We’re launching the testnet this week, and it’s going to include a lot of advanced features — all the bells and whistles you could want from a modern privacy protocol. I’m really excited to see how the market responds.

Mahsa: Bearish or bullish for 2026?

Mike: Always bullish. Even when markets go down, I remain bullish. I focus on the long-term vision. Trading shorter timeframes is incredibly difficult, and honestly, I’m not very good at it.

What I do believe in is long-term adoption. I can see the pace at which the industry is evolving, and I see the infrastructure being built. To me, it’s only a matter of time before market prices start reflecting that reality.

Mahsa:Is there anyone else in the market doing something similar to what you’re building? Who would you consider your competitors?

Mike: We’re definitely not the only people building privacy tooling. If you look at Ethereum privacy today, Tornado Cash is still by far the biggest protocol. That alone is a testament to how impactful their original work was. They still have around $450 million in TVL, which is honestly incredible considering everything the team has gone through.

I also want to give a shout-out to Railgun. They’re privacy OGs as well, and I have a lot of respect for what they’re building. They’re working on some very interesting innovations too.

More broadly, we’re seeing many ecosystems experiment with their own approaches to privacy. Starknet recently introduced Stark20. And of course, privacy-focused chains like Zcash and Monero have existed for many years already.

So yes, it’s a crowded space. But I think our compliance mechanisms create a very unique niche for us. What excites me most, though, is not necessarily competition — it’s the overall growth of the privacy market itself.

Right now, less than 0.01% of Ethereum traffic is private. You could practically say privacy usage on Ethereum is still close to zero. Our goal is to help grow that market — to 1%, then 5%, then eventually 10% or 20%.

The total addressable market is enormous, and I believe there’s room for many successful players in this space.

Mahsa: If you had one million euros to invest today, where would you allocate it?

Mike: As I mentioned, I’m more of a long-term holder than a trader. There are a few things I’m personally excited about. One example is the Gnosis Economic Zone, which was recently announced here at ECC. I’ve always been a big fan of the work Gnosis does. They build a lot of the foundational infrastructure the entire industry relies on.

Then obviously Ethereum. Bitcoin as well. And honestly, if I had a million euros, I’d probably even buy some Solana.

Overall, I’d probably diversify across multiple ecosystems, but I would definitely place the strongest emphasis on teams building real infrastructure and consistently shipping products.

Mahsa: You mentioned both Ethereum and Solana. If you absolutely had to choose only one, which would it be?

Mike: I’d still choose Ethereum. Ethereum has its own challenges and internal drama sometimes, but I really resonate with the values it stands for — censorship resistance, open-source development, privacy, decentralization, security. Those principles align strongly with my personal beliefs.

And honestly, in the world we live in today, I think those values are only becoming more important over time. I’m a strong believer in Ethereum long term.

Mahsa: I completely agree. Even at coinIX, we strongly believe in Ethereum. Most of the projects in our portfolio are either built on Ethereum or focused on Ethereum scalability solutions.

Mahsa: What do you think will be the next major category in crypto?

Mike: Privacy. Definitely privacy. There are so many exciting developments happening right now. One thing I’m particularly excited about is the Kohaku SDK by the Ethereum Foundation. It’s essentially an SDK for wallet providers that allows users to manage both public and private balances directly within their wallets.

As I mentioned earlier, almost no Ethereum activity is private today. But once users can enable privacy with a single click inside their wallet, I think adoption is going to explode.

Deep down, people value privacy. And if privacy becomes frictionless, I think we’ll see massive growth in this sector.

Mahsa: Which category do you think is going to disappear or lose relevance over the next two years?

Mike: Personally, I hope we move away from the cycle of coins with no real utility suddenly reaching multi-billion-dollar valuations before collapsing again. I’ve never been a huge fan of that trend.

I’d really like to see the market shift its focus back toward meaningful infrastructure and long-term value creation.

Mahsa: A lot of people have lost hope in crypto and walked away from the market. What motivates you personally to stay in this industry?

Mike: For me, it always comes back to the core values: permissionless networks, decentralized systems, trustless infrastructure. Those principles matter.

The crypto market has definitely had its ups and downs, and from an investment perspective it can be extremely difficult to navigate. But if you focus on the underlying technology, the long-term trajectory feels almost inevitable.

I still believe in many of the same ideas that brought me into this space in the first place. For example, I still believe smart energy grids will eventually operate on blockchain infrastructure because it simply makes more sense to have one shared state across many participants rather than isolated databases that all need to trust one another.

Mahsa: Is there anything else you’d like to share with our audience?

Mike: I think “do your own research” is still one of the most important principles in this industry. Understand your own values and explore which technologies align with them.

And even if you’re not a developer or builder yourself, you can still actively contribute to the ecosystem by using products, providing feedback, and engaging with the technology. Builders genuinely listen to users, and products improve because of that feedback.

So stay curious. Explore what’s being built. Participate in the ecosystem. I think curiosity is one of the most important qualities anyone can have in this space.

Watch the interview on my YouTube channel:

About Crypto Diva

I’m already in the Future… Meet me there! Blockchain Technology is my passion and I have dedicated my career and research path to DeFi. My ultimate goal is to encourage more female professionals in the DeFi industry.

As the Sales and Marketing Manager of coinIX & COINVEST, I’ve got the privilege of being in close contact with Blockchain investment firms, as well as the innovative web3 projects which are creating the foundations the future financial world. I love to make the impossible possible and i’m willing to go the extra mile for that. Be my companion in my DeFi journey and I’ll show you everything.

Peace & Love,

Your Crypto Diva

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