I've always thought the strangest thing about on-chain activity is that you can anonymously transfer tens of millions of dollars, but just one loan taken out, and the entire world will know your positions, debts, health status, and liquidation lines.

These details will always be attached to the address, like a permanent public financial record.

Yesterday, @protocol_fx announced that the first private stablecoin mint in DeFi history occurred. I looked at this transaction, and it indeed went through smoothly.

Tx: 0x10f5ca84e4f5b1e622112dd089de6d0b07a1a90ff2e7aa4769694fd8980bd42d.

The process is actually quite straightforward: the user first unshields WETH through Railgun, then swaps it for wstETH on Uniswap V4, then mints fxUSD on f(x), while also generating an xPOSITION NFT (Token ID 1896). Finally, they shield both fxUSD and the NFT back together.

Many people think that private minting means the transaction completely disappears, but actually the intermediate steps are still public. What truly changes is the ownership of the debt—it’s no longer permanently tied to your public address but is instead linked to this hidden NFT.

In the past, in lending systems like Maker and Morpho, your debt was tightly bound to your address. On-chain analysis platforms could see it, MEV could see it, counterparties could see it. Over time, a single address would reveal your funding habits, asset size, and risk preferences.

This time is different. With lending, for the first time, there's an opportunity to not always be exposed openly.

For large holders who genuinely need liquidity, this is quite practical. Many times, they don’t want to sell their tokens; they just want some liquidity for circulation. Paying taxes, wages, daily expenses—there needs to be some cash flow, but they also want to maintain exposure to ETH.

Previously, there were only two options: sell some assets or openly borrow to reveal your position. Now, there's a new possibility—to retain assets while keeping the debt relationship under control.

The structure of fxUSD is also quite clean: it doesn’t bear volatility on the stable side, and the fluctuations are mainly absorbed by xPOSITION. Mint fee is 0.5%, repayment fee is 0.2%. There’s basically no ongoing floating borrow APR, which makes the cost better for long-term holders compared to many variable-rate markets.

Currently, fxUSD supply has already reached around 55 million dollars. On Pendle, fxSAVE is also starting to offer fixed-income structures. It’s no longer just a privacy concept; it’s gradually transforming into a system that can be practically combined and used.

Of course, this isn’t absolute privacy. Railgun still has potential timing and metadata correlation risks. Liquidations will still happen when they should. When wstETH drops, rebalancing still needs to be handled.

But the direction is right. Previously, DeFi solved the problem of anyone being able to participate in finance. Now, some are asking: after entering, do users have to always make all their financial relationships public?

This question could influence the design of many future on-chain lending products. What do you think? In the future, should lending give users more control over what to disclose and what to keep private?