Changpeng "CZ" Zhao, founder of Binance, has publicly acknowledged a critical privacy flaw in cryptocurrency payments. He noted that when users make payments directly on-chain, the recipient can easily view the sender's entire wallet balance and transaction history, creating an intrusive experience for everyday transactions. CZ stated that while using a centralized exchange (CEX) can mitigate this issue in the short term, it merely transfers the data custody to a third party and is not a scalable, long-term solution. He emphasized the need for a proper privacy layer for crypto payments.
Kaspa (KAS) is being positioned as a foundational layer for such a privacy solution. Proponents, including the FKAS Official Kaspa Community Token, argue that privacy should not be built directly into Layer 1. Instead, Kaspa's architecture maintains base-layer transparency—similar to Bitcoin—for verifiable consensus and regulatory compliance, while allowing privacy tools to be built as modular layers on top. This design aims to keep the core protocol simple and efficient for nodes and exchanges.
Kaspa's UTXO (Unspent Transaction Output) model and high-throughput BlockDAG structure are cited as technical advantages. The UTXO model provides a cleaner foundation for privacy-enhancing techniques like coin mixing and stealth addresses compared to account-based models. Furthermore, Kaspa's high transaction throughput could prevent congestion, making privacy layers more practical and weakening certain traffic analysis attacks.
Separately, an interview with analyst Kwik𐤊 sheds light on why Binance has not yet listed Kaspa on its spot market. The delay is attributed to economic incentives rather than technical issues. Since many Kaspa holders already use Binance for derivatives, a spot listing offers limited new user acquisition for the exchange. In contrast, exchanges like HTX and Kraken benefit more as Kaspa attracts new users to their platforms.
The Kaspa ecosystem is taking a long-term, infrastructure-first approach. The Kaspa Ecosystem Fund (KEF) has spent significant capital (reportedly around $1M for OKX efforts) on partnerships and technical integrations instead of offering large token allocations as listing incentives, which is common for projects with pre-mined supplies. Technical integration with HTX is reportedly wrapping up, with a potential listing announcement around Christmas. The strategy now focuses on growing the KRC-20 token ecosystem (e.g., Nacho, Kasgo) to generate independent trading volume, which could eventually make a Kaspa L1 listing more economically attractive for major exchanges like Binance.
