Vitalik Buterin, the creator of the Ethereum network, has divulged information on the use of stealth addresses in the trade of non-fungible tokens (NFTs). This means that a user may transmit an ERC-721 token (NFT) to a receiver without anybody else knowing the token’s recipient.

Buterin said that this new concept would “substantially increase the privacy of the NFT ecosystem.”

Vitalik Buterin elaborated on the idea on the Ethereum Research website, offering logical calculations on the theory and illustrating its utility, stating:

“[Y]ou just want to mask the connection between the sender and recipient’s extremely visible public identities (so that you may send an ERC721 to “vitalik.eth” and I can see it, but no one else can know that vitalik.eth got an ERC721; they will only see that someone received an ERC721).”

In the meanwhile, Buterin is not the first to propose a stealth address for NFTs. A member on the Ethereum Research website with the pseudonym Nerolation presented the concept four days ago. He described the procedures of token transfer, minting, and destruction.

Nerolation also provided a short explanation of how the stealth address for NFTs would be generated, adding that the notion is comparable to Buterin’s proposal for soulbound tokens.

While Nerolation believed that the Merkle tree corresponds to the theory, Buterin noted in his response that a developer is not required to utilize a Merkle tree or a cryptographic proof that allows a user to demonstrate ownership of a Zero-Knowledge Succinct Non-Interactive Argument of Knowledge asset (zk-SNARK). The reason for this was because NFTs are non-interchangeable.

Following Vitalik Buterin’s tweet, a number of people started to oppose the concept, pointing out that if the theory is applied, blockchain-based transactions would no longer be transparent and open source. Others feared that the new approach would result in an increase in NFT theft reports.

Even though NFTs are currently traded on popular crypto exchanges such as Binance, Coinbase, and Kraken, the adoption of the new proposal by many top NFT companies such as Yuga labs could lead to the same fate as private cryptocurrencies Monero and ZCash, which have been delisted from many exchanges.

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