Cloak

Cloak is a privacy execution layer for Solana built by Machine-Labz, designed to enable programmable privacy for transfers, swaps, and routing of SOL, USDC, and USDT. The project emerged from the Solana Cypherpunk Hackathon 2025, where it placed third in the Stablecoin track, winning $25,000 USDC among 1,576 final submissions from over 9,000 participants across 150-plus countries — the largest crypto hackathon on record.

The Privacy Problem Cloak Solves

Every transaction on Solana is visible to anyone inspecting the blockchain. Addresses, amounts, and counterparties are publicly readable on-chain explorers, which creates friction for businesses managing treasury operations, enterprises handling payroll, traders executing sensitive positions, and individuals seeking basic financial privacy. Existing workarounds — off-chain mixers, custodial shufflers, delayed routing hops — introduce intermediary risk, compliance uncertainty, or user experience friction that limits adoption.

Cloak addresses this by building a shielded pool directly on Solana that severs the observable link between sender and recipient without requiring trusted parties, delays, or external chains.

How Cloak Works

The core architecture is a UTXO-based shielded pool deployed on Solana. When a user deposits SOL, USDC, or USDT into the pool, the protocol creates an encrypted note representing the deposited balance. That note is stored on-chain in encrypted form; the deposit transaction is publicly visible, but the note's contents are not.

To withdraw funds, the user generates a zero-knowledge proof — using the Groth16 proving scheme — that demonstrates ownership of a valid note in the pool without revealing which note or how much it contains. The withdrawal is directed to a fresh wallet of the user's choice. From the perspective of any on-chain observer, the transaction path reads only as "pool → recipient." The original sender address never appears in the withdrawal transaction.

This design achieves what Cloak calls unlinkability: the network cannot connect a deposit address to a withdrawal address, and it cannot determine the amount transferred, because the transaction history visible on the blockchain starts and ends at the pool boundary.

Permissionless Miner Network

One of the distinctive architectural choices in Cloak's design is a permissionless miner network. When a user initiates a withdrawal, they open a claim, and miners then race to resolve a Blake3-based proof in order to submit and sign the withdrawal transaction on the user's behalf. This relay design means the user's wallet never directly submits the withdrawal transaction, removing another potential fingerprinting vector.

Miners also generate decoy transactions that are indistinguishable from real withdrawals. These decoys give the pool continuous on-chain volume independent of user activity, which is significant because low-volume privacy pools are vulnerable to statistical analysis — if only a handful of transactions flow through the pool, the anonymity set shrinks and the probability of linking a deposit to a withdrawal increases. By seeding the pool with miner-generated decoys, Cloak ensures the anonymity set grows with each block regardless of organic user demand.

This approach shifts the burden of privacy maintenance partly onto an incentivized participant layer, ensuring fungibility is not solely dependent on how many real users happen to be transacting at any given moment.

Supported Assets and Use Cases

Cloak supports private transfers of SOL, USDC, and USDT — the three highest-velocity assets on Solana. The project describes several target use cases:

• Personal transfers: Users deposit from one wallet and withdraw to one or more fresh wallets, with the chain showing only the pool-to-recipient path.
• B2B payments: Businesses can batch payments and shield counterparty information from public explorers.
• Cross-border transfers: Stablecoin amounts can be obscured during transit for international settlement.
• Treasury management: Protocols and DAOs can shield governance-related fund movements.
• Payroll distribution: Employers can distribute compensation without broadcasting individual payment amounts on-chain.

Compliance and Auditability

Privacy tools on public blockchains face a genuine tension between user privacy and regulatory compliance. Cloak's design accounts for this with viewing keys. A user can generate a viewing key from their wallet and share it selectively with an auditor, compliance officer, or counterparty. The viewing key grants the recipient the ability to verify the holder's full transaction history within the pool, without that information being exposed to the broader public.

This selective disclosure model positions Cloak as "fully auditable" in the team's framing — meaning the privacy is not absolute in the sense of being unbreakable under all circumstances, but rather user-controlled and revocable for specific counterparties. The design is similar in philosophy to viewing keys in Zcash and note disclosure in other shielded-pool systems.

Solana Fit

Cloak is designed to run natively on Solana and benefits directly from Solana's throughput and fee characteristics. Proof verification of Groth16 proofs on Solana is fast, enabling the shielded pool to settle withdrawals without the multi-minute delays typical of some Ethereum-based privacy protocols. The absence of gas fee exposure from the user's wallet — achieved through the miner relay system — also reduces the friction of interacting with a shielded pool.

The project's participation in the Colosseum Cypherpunk Hackathon connects it to a broader ecosystem push: Solana's developer community has increasingly treated on-chain privacy as an infrastructure requirement rather than a niche feature, and the hackathon was organized specifically to accelerate that work. Cloak's placement in the Stablecoin track reflects a thesis that privacy infrastructure is most urgently needed where the highest-value, highest-frequency transactions occur — denominated in stablecoins.

Token and Audit Status

No native protocol token has been confirmed for Cloak. No third-party security audit has been publicly disclosed. The GitHub repository under the Machine-Labz organization (https://github.com/Machine-Labz/cloak) currently contains no code, suggesting the project's on-chain program and off-chain infrastructure remain under active development following the hackathon.

Team

Cloak was built by Machine-Labz, a development organization focused on the Solana ecosystem. Individual team members have not been publicly named in available sources. The project's X account (@cloaklabz) describes the team as participants in the Colosseum Cypherpunk Hackathon 2025.

Cloak is an early-stage project. Its founding date is recorded as September 2025, and its hackathon placement marks its first major public milestone. As development continues toward a production launch, the combination of a UTXO shielded pool, in-browser ZK proof generation, and an incentivized miner network for relay and decoy transaction generation represents a technically considered approach to solving on-chain privacy for Solana's stablecoin economy.