By design, everything is public on the blockchain, which can deprive users from their right to privacy. Anyone can have view everyone else entire financial history. The right of privacy lies in the ability to have control over the information we provide and to whom we provide it.
To this extent, the compliance tool enables users to prove the origin of their funds through selective disclosure. Each note translates to a unique deposit, this tool will issue a cryptographic proof of a deposit allowing a third party to authenticate one's transactional profile.
How to use the compliance tool?
With each deposit made through the application, a new note is generated by the protocol. This note is necessary to withdraw the deposited assets later on any withdrawal address. It is this same note that, if needed, allow users to generate a compliance Report to prove the origin of their assets.
More information see section Deposit / Withdraw.
To get a compliance report, the user solely need to copy the note, generated after the deposit, in the dedicated input.
If the note wasn't spent yet (i.e. assets have still not been withdrawn), the compliance tool will only provide you with information about the deposit:
- Transaction hash of the deposit
- The source address
- The commitment hash
The commitment is the hashed random area of bytes generated at each deposit that is sent to anonymity pool to characterize the transaction.
To can find more information about how Tornado Cash achieves privacy see section How does Tornado Cash work?.
If the note was spent (i.e. assets were withdrawn to a given address using the note), the compliance tool will complete the information above by adding:
- Transaction hash of the withdrawal
- The destination address
- The nullifier hash
The nullifier hash is a public input that is sent on-chain to get checked with the smart contract and authenticate the presence of the note's secret in the Merkle tree for the withdrawal.
Therefore, the tool allows users to re-link source and destination addresses in order to prove transaction history for assets transacted through Tornado Cash. The compliance report can be downloaded as a PDF format for accessible disclosure.