Railgun, a privacy protocol built on Ethereum, has set a new daily record with 328 shielded token transactions, signaling a significant surge in demand for private DeFi interactions. This milestone, achieved on January 23, 2026, underscores the growing adoption of privacy-enhancing technologies within the Ethereum ecosystem. The protocol utilizes zero-knowledge proofs (zk-SNARKs) to facilitate these private transactions without compromising decentralization.
Concurrently, Railgun has launched a groundbreaking new feature called RAILGUN_connect, described as a 'universal plug-and-play' privacy layer for DeFi. This tool, successfully tested with CowSwap, allows users to interact with DeFi applications directly from their private, shielded balances. This eliminates the previous need to unshield funds—a major usability hurdle for legacy privacy protocols like Zcash and Tornado Cash—and represents a "huge leap in making private addresses as functional as public ones," according to the project team.
The data supports the rising traction. The daily average of shielded transactions ("shields") hit a record of 326 in early 2026, while the protocol's cumulative volume has grown nearly 100% year-over-year to reach $4.5 billion. Alan Scott, Railgun's co-founder, emphasized the importance of such privacy features, stating, "Privacy features like private multi-signature wallets are key for institutional on-chain adoption."
The native governance token, RAIL, has also reacted positively, recovering 25% after a recent pullback, partly buoyed by a broader rally in privacy coins. This trend highlights a market shift towards privacy-focused solutions and could influence how regulators approach compliance and innovation in the DeFi space.
