Public or Private? Why Smart Contract Confidentiality Is the Next Big Debate

Blockchain’s early days were built on radical transparency. Anyone could see any transaction, inspect any smart contract, and trace flows across protocols. That’s still true today for most networks including giants like Ethereum and BNB Chain.

But as Web3 moves beyond experiments and into real financial infrastructure, not every use case fits that public-by-default model. Businesses don’t want their strategies exposed. Institutions can’t build with full transparency on sensitive transactions. And users increasingly care about protecting their data, not hiding it, just having control.

That’s why we’re now seeing a debate take shape: Public smart contracts like those on BNB Chain, or encrypted smart contracts like COTI’s approach with Garbled Circuits?

Let’s break it down.

BNB’s Public Smart Contracts: Familiar, But Exposed

BNB Chain, Binance’s flagship blockchain, follows the standard EVM model. Developers write Solidity contracts, deploy them publicly, and everything they do happens on-chain, in full view.

That’s good for:

• Open composability (different apps talking to each other)

• Transparency (anyone can audit the code)

• Community engagement (everything is visible)

But there’s a catch: privacy doesn’t exist here. Every trade, every liquidity pool, every business interaction is out in the open. That means:

1. Front-running risks

2. MEV exploitation

3. No confidentiality for proprietary strategies

And in some cases, that’s not just inconvenient, it’s a dealbreaker for sensitive applications.

Why Privacy Isn’t Optional Anymore

Privacy is becoming central to how blockchains can serve the real world.

Shahaf Bar-Geffen, CEO of COTI, put it clearly:

Source

In an interview with Decrypt, he added:

Beyond legal compliance, there’s also a security reality. MEV attacks, where bots exploit transaction visibility for profit, are draining users across chains. In one notorious case earlier this year, a single MEV bot extracted over $200,000 from an unsuspecting trader in seconds. That’s the cost of doing business on fully transparent blockchains.

Not every transaction needs secrecy. But when privacy matters, it’s not negotiable.

COTI’s Privacy-on-Demand: How Garbled Circuits Work

So what’s the alternative? That’s where COTI V2 steps in. Rather than building around Zero-Knowledge Proofs (ZKPs), which are powerful but slow, COTI uses Garbled Circuits, an elegant form of Multi-Party Computation (MPC) designed to encrypt entire computations, not just the inputs or outputs.

In benchmark tests:

• 1,800x to 3,000x faster than typical ZK-based systems

• Uses 250x fewer resources

That’s not just better, it’s totally  different. It’s encrypted execution that’s verifiable but confidential by default.

Even better? COTI doesn’t force you into secrecy. Selective disclosure is part of the design. As Bar-Geffen explained:

Source 

For users, it means real privacy when you need it. For businesses, it means compliance doesn’t break functionality.

What’s next? Most likely, a hybrid world.

BNB Chain and similar platforms will continue to host massive ecosystems for DeFi, NFTs, and consumer apps that thrive on openness.

COTI’s model will become essential for sectors like finance, healthcare, AI, enterprise, anywhere. It’s about completing the missing pieces of Web3. And when you consider that COTI’s approach is up to 3,000x faster than existing ZK models? It’s totally ready and practical now.

Where Public and Private Contracts Shine

Both public and private smart contracts have a place in Web3 but they serve different kinds of builders and users.

Where Public Contracts Work Well : BNB Chain

• DeFi Protocols that benefit from full composability, like lending platforms or DEXs.
• NFT Marketplaces where transparency builds trust with buyers and sellers.
• DAO Governance systems that depend on open participation and vote visibility.

Where Confidential Contracts Are Needed 

This is Where COTI Comes In..

• Encrypted Trading Logic: Imagine perps and swaps where no one, not even the node operators can see your liquidation point or trading strategy.
• Private AI Agents: AI-powered assistants making real-time trades, analyzing private data, or executing business strategies, all encrypted.
• Enterprise Applications: Privacy is necessary . It’s required for things like confidential healthcare records, private financial agreements, or sensitive regulatory filings.
• Cross-Jurisdictional Compliance: With selective disclosure, COTI lets users meet local legal requirements without leaking unnecessary information across the chain.
• Encrypted RWA (Real-World Asset) Deals: When tokenizing real assets like property or company equity, confidentiality is often required by law.

Read More : COTI V2 Unpacked: A Straightforward Overview

This is where COTI shines, filling a crucial gap in the existing Layer 2 ecosystem. ZK-rollups are great for proofs, optimistic rollups are great for general scaling but privacy-preserving computation with Garbled Circuits is the piece that’s been missing for truly private execution. No bolt-ons, no awkward workarounds, native encrypted logic, fast and practical today.

It’s not about replacing Ethereum or BNB Chain. It’s about completing the stack so developers can actually build the things we’ve been talking about in crypto for years but couldn’t safely do until now.

BNB handles scale. COTI handles secrecy. Together, they solve the whole picture.

Final Thoughts

For years, privacy in blockchain felt like an afterthought or a side quest. That era’s over. As Web3 gears up to handle real economies, encrypted smart contracts are going from a niche idea to a necessary foundation. Transparency when you want it, privacy when you need it.

COTI’s Garbled Circuits is the missing infrastructure for the next generation of smart contracts. Public when appropriate, confidential when required.

The future of Web3? It's about control. It's about having a choice.

ALSO READ: Stay.Coti — Build Private dApps Without Writing a Single Line of Code