Payy Unveils Privacy-Centric Layer 2 Solution for Ethereum Network
The newly introduced privacy-focused layer 2 from Payy enables automatic private ERC-20 transactions without requiring users to adopt new wallets or tokens.
Digital asset initiative Payy, known for its privacy-oriented wallet solution and cryptocurrency banking card offerings, has officially unveiled a privacy-enhanced layer 2 network built on Ethereum.
Through a statement published on X this Wednesday, Payy revealed that users are now able to add the network to their MetaMask wallet configurations, with all ERC-20 token transfers conducted on the platform being automatically rendered private "no smart contract changes required."
According to Payy, the network's primary user categories will consist of institutional players and financial technology companies seeking to transition "flows onchain without fear of analysis and exploitation," as well as cryptocurrency enthusiasts who desire privacy capabilities without having to manage "juggling multiple wallets."
"Some of the largest stablecoin players are day 1 launch partners on Payy Network. We'll be announcing them in the coming weeks," Payy said.
The platform maintains compatibility with any wallet built on the Ethereum Virtual Machine (EVM) standard, while the project's official website suggests that the layer-2 solution is predominantly focused on "making stablecoins private," although it also provides support for the full spectrum of ERC-20 tokens.
In the wake of the public announcement, Sid Gandhi, serving as CEO of Payy, provided additional context through X, explaining that Payy is actively working to assist major traditional financial institutions in gaining confidence to migrate capital onto blockchain networks.
Nearly every bank, fintech, and enterprise is telling us the same thing: They cannot move real capital flows onchain if their financial data is exposed to the world.
Regarding Payy's approach to privacy, the layer 2 network operates private ERC-20 pools through which users' transactions are seamlessly routed when utilizing wallets such as MetaMask. This functionality allows users to transfer assets from their standard wallets while keeping the destination of those funds hidden from external observers.
During interactions with decentralized finance applications and smart contracts, assets are extracted from the private pools to a newly generated address.
Prior to this development, Payy's main offerings centered around its proprietary privacy-centric wallet and a crypto banking card product, which made its debut in mid-2025. The company reports having accumulated 100,000 users across its wallet service offerings.
Several other L2s and protocols already exist that deliver privacy features on Ethereum, including Aztec Network and Railgun, which employ comparable techniques to mask transfer activity.
At the same time, numerous privacy-centered tokens like Zcash (ZEC) and Monero (XMR) experienced massive growth in popularity throughout 2025 during a significant boom in the crypto privacy sector last year.
Payy states that it seeks to establish a competitive advantage by minimizing the obstacles associated with preserving privacy, including the need to oversee multiple wallets or toggle between various protocols.
That said, Payy is not operating in isolation on this front. Cointelegraph previously reported in October that Ethereum developers were actively developing wallet privacy enhancements as a component of the Kohaku roadmap.
The objective behind Kohaku is to diminish dependence on centralized entities that monitor transactions, while simultaneously incorporating functionality such as private sending and receiving.