Ethereum Tests ‘Secret Santa’ Protocol Designed to Enable Private On-Chain Gifting

• Researchers from Distributed Lab introduced ZK Secret Santa to enable private gaming on Ethereum.
• ZKSS could help Ethereum support confidential transactions, private governance, and shielded user activity. 

ZK Secret Santa (ZKSS), a zero‑knowledge (ZK) proof-based system designed to allow “Secret Santa”-style gifting on Ethereum, was introduced in a research paper on arXiv in January. In December, developers Artem Chystiakov and Kyrylo Riabov resurfaced the idea on the official Ethereum research forum.

One challenge that Ethereum (ETH) has faced since its launch is that all transactions are publicly accessible. This includes the sender and recipient addresses. Although this openness aids in auditability and reliability, it compromises privacy. Onlookers may track wallets over periods associated with their real-world identities or determine the parties involved with these transactions.

Because of this, doing something as simple as a “Secret Santa,” where participants send gifts anonymously to randomly assigned recipients, becomes non-trivial on-chain.

How Ethereum ZKSS Works

All participants will first need to register their Ethereum addresses in a smart contract. This sets up the group of eligible players, where each participant commits to a unique cryptographic signature to prevent multiple entries or fraudulent participation.

From there, participants anonymously submit a random value or key via a transaction “relayer,” and because the relayer broadcasts on behalf of participants, no one on-chain can tell who submitted which randomness. This acts like everyone putting a “note in a hat.”

Once randomness is submitted, the protocol matches participants so that no one is assigned to themselves; this is called a “derangement.” The assigned receiver’s delivery details, like a real-world address for a gift, can be encrypted using the submitted randomness, so only the assigned sender can decrypt them.

The matching result is revealed only privately: only the assigned Santa/receiver knows who sends to whom. To the rest of the network, nothing is disclosed. In cryptographic terms, ZKSS combines hash functions, signature verification including ECDSA, Merkle proofs that verify membership in the participant set, and zero‑knowledge proofs to ensure that the protocol executes correctly while preserving anonymity.

Tomorrow, the Ethereum blockchain is set to undergo the Fusaka upgrade, which brings PeerDAS, a feature expected to boost data throughput by up to eight times. As we have explained, this boosted capacity will launch on December 9 (BPO1) with additional upgrades scheduled for January 7, such as CLZ opcode enhancements, revised RLP size constraints, and EIP-7825.

At the time of press, ETH is priced at $2,840 after a slight drop of 2% in the past seven days, maintaining a support point at $2,800.