Most blockchains have a privacy problem.
Open a block explorer and you can usually see where tokens came from, where they went, how much was transferred and which wallet interacted with which application.
That transparency is useful for verifying a blockchain.
It is less useful if the blockchain is being used for salaries, business payments, trading strategies, treasury management or simply someone’s personal finances.
CLOAK is building another option on Telos: transactions that can still be verified by the blockchain without requiring everyone else to see the private information behind them.
That is where shielded transactions, private DeFi and zero-knowledge proofs come in.
TL;DR: What is CLOAK on Telos?
CLOAK is an on-chain privacy protocol running on Telos Zero that uses zero-knowledge proofs to let users hold and transfer digital assets without publicly linking every action to their blockchain account.
CLOAK currently supports shielded assets, including fungible tokens and NFTs, and has a live Hybrid DEX on Telos. Its privacy technology is based on the ZEOS Caterpillar Shielded Protocol, with cryptographic proofs generated by the user’s device and verified on-chain.
In simple terms:
Your wallet knows what you are doing.
The blockchain can prove that what you did was valid.
The rest of the world does not necessarily need to see the private information behind it.
That distinction is important.
Why does a public blockchain need privacy?
Imagine your bank account worked like a public block explorer.
Someone sends you £20.
They can now potentially inspect your account history, see how much money you have, identify other payments you have made and follow where your money goes next.
That would feel extraordinary in normal finance.
On public blockchains, however, this level of transparency is common.
Wallet addresses are pseudonymous rather than necessarily anonymous. Once an address becomes associated with a person, company or organisation, its blockchain activity can potentially be analysed.
That can expose things such as:
- wallet balances
- payments
- counterparties
- trading activity
- DeFi positions
- NFT ownership
- treasury movements
- transaction history
Privacy protocols try to preserve one of blockchain’s most useful properties, verifiability, without requiring every piece of information to remain publicly readable forever.
CLOAK is one approach to solving that problem on Telos.
What is a shielded transaction?
A shielded transaction is a blockchain transaction where sensitive information is hidden while the network is still able to verify that the transaction follows the rules.
Normally, a blockchain verifies a transaction by examining the information inside it.
A privacy system changes the question.
Instead of effectively saying:
“Here is everything I am doing. Please check it.”
the user can provide cryptographic proof saying:
“I can prove this transaction follows the rules without showing you the private information used to create it.”
This is possible using zero-knowledge proofs.
Shielded transactions are already an established area of blockchain cryptography and are used by privacy-focused systems to separate transaction validity from complete transaction transparency.
What is a zero-knowledge proof?
A zero-knowledge proof, often shortened to ZKP, allows someone to prove that a statement is true without revealing the information that proves it.
A simple analogy is proving that you know the password to a locked room without telling someone the password.
They do not need the password.
They need convincing evidence that you possess it.
CLOAK applies a much more sophisticated version of this principle to blockchain transactions.
When a private CLOAK transaction is created, the user’s wallet generates a cryptographic proof.
That proof can demonstrate that the transaction is valid without requiring the Telos blockchain to learn all of the private information behind it.
CLOAK currently uses Groth16 zero-knowledge proofs with BLS12-381 cryptography. Proof generation happens on the client side, while the resulting proof can be verified on-chain.
You do not need to understand Groth16 or elliptic curves to understand the important part:
the private data and the proof that the private data is valid are two different things.
That separation is what makes this type of blockchain privacy possible.
How does CLOAK work on Telos?
At a high level, the process looks like this:
1. You create a private transaction
Your CLOAK wallet determines what assets you want to move and where they should go.
2. Your device creates a zero-knowledge proof
The cryptographic work happens locally.
Your private keys and the information required to create the proof do not need to be handed to the blockchain.
3. Telos verifies the proof
Instead of reconstructing all of the private information, the on-chain CLOAK protocol verifies that the proof is valid.
4. The shielded ledger is updated
If the proof passes verification, the private state can be updated.
5. You can transfer assets or interact with supported applications
CLOAK’s architecture also includes private authentication capabilities designed to allow applications to recognise an authorised private user or position without necessarily learning the public blockchain account controlling it.
That final point makes CLOAK more interesting than a system built only for sending private payments.
It is attempting to make privacy programmable.
CLOAK can shield more than ordinary tokens
The underlying ZEOS Caterpillar protocol is designed for multiple asset types.
That includes ordinary fungible tokens, but also NFTs.
This creates some interesting possibilities.
An NFT can remain shielded while the zero-knowledge system proves that the person attempting to move it is authorised to do so.
The protocol specifically treats NFTs differently from fungible tokens because an NFT cannot simply be divided or converted into “change” like a token balance.
ZEOS Caterpillar also binds a shielded asset to both its token symbol and its issuing contract, helping the system distinguish between assets that happen to use the same ticker.
For Web3 applications, that potentially extends blockchain privacy beyond money into areas such as private ownership, gaming assets, credentials and application permissions.
What is private DeFi?
Private DeFi is decentralised finance where users can interact with financial applications without automatically broadcasting their entire financial identity and activity to the public blockchain.
Consider a trader using ordinary DeFi.
Anyone analysing their wallet might be able to inspect:
their portfolio, previous trades, token balances, positions and interactions with different protocols.
With privacy infrastructure, the goal is to reduce how much of that information needs to be exposed while maintaining cryptographic verification.
Protocols such as RAILGUN and Aztec are exploring variations of the same broad problem in the Ethereum ecosystem. CLOAK brings its own approach to Telos and other Antelope networks.
CLOAK’s Hybrid DEX
CLOAK already has a Hybrid DEX live on Telos.
A DEX, or decentralised exchange, lets users trade digital assets through blockchain infrastructure rather than relying entirely on a centralised exchange.
CLOAK’s exchange is unusual because it combines three different market structures:
Limit order book
Users can place orders to buy or sell at particular prices.
Constant-product AMM
Liquidity pools can provide continuous liquidity similar to the model popularised by decentralised exchanges such as Uniswap.
Concentrated liquidity
Liquidity providers can allocate capital within selected price ranges rather than spreading it across every possible price.
Instead of treating these as completely separate markets, CLOAK’s engine is designed to find execution across its order book and liquidity pools.
The Hybrid DEX is currently listed by CLOAK as live on both Telos and Vaulta.
Why build CLOAK on Telos?
Privacy infrastructure still needs a blockchain underneath it.
For CLOAK, that includes Telos Zero, the Antelope-based side of the Telos network.
This is important because zero-knowledge systems do not eliminate the need for blockchain consensus. The network still needs to process transactions, verify proofs and establish an authoritative state.
Telos switched its mainnet to Savanna consensus on July 27, 2026, giving the network approximately one-second finality under normal operating conditions.
For applications such as private payments, trading, bridges and DeFi, faster finality means applications can establish much sooner that the underlying blockchain state has settled.
CLOAK also makes use of BLS12-381 cryptographic functionality available within the Antelope stack for practical on-chain proof verification.
So there are effectively two different systems working together:
CLOAK provides the privacy logic.
Telos provides the underlying blockchain, execution and final settlement.
Do you need a public Telos account to use CLOAK?
Not necessarily.
One interesting part of CLOAK’s design is that a private user does not need their own public blockchain account to submit every private transaction.
CLOAK describes transactions being submitted through a shared, restricted alias account while the user’s wallet separately proves that the transaction is authorised.
This helps separate the private wallet activity from the public account submitting activity to the blockchain.
CLOAK fees are used to cover underlying Antelope resources such as CPU, NET and RAM.
That means some of the blockchain resource complexity can be abstracted away from the private wallet user.
What is the CLOAK token used for?
CLOAK also has its own protocol token.
According to the project, CLOAK is used to pay fees for private transactions and cover the underlying blockchain resources required to process them.
Part of each private transaction fee is permanently burned, while another part supports protocol development and ecosystem operation.
The project states a maximum CLOAK supply of 1 billion tokens.
That utility should not be confused with the privacy technology itself.
The privacy comes from the cryptographic protocol and zero-knowledge proof system, not simply from holding a CLOAK token.
Is everything completely invisible when using CLOAK?
No, and this is one of the most important things to understand about blockchain privacy.
Privacy is not the same thing as becoming completely invisible.
CLOAK explicitly describes transparent boundaries around the shielded system.
When assets enter the shielded protocol, information required for the public deposit can remain visible.
Likewise, when assets leave the private environment and return to a public blockchain account, the public side of that withdrawal can be visible.
Transfers taking place inside the shielded system are where the stronger privacy properties apply.
The underlying ZEOS Caterpillar documentation also warns that timing, network behaviour and application metadata may potentially create correlations even when the cryptography itself is functioning correctly.
That is an important distinction.
A good privacy protocol should explain what it hides and what it does not hide.
Is CLOAK the same as Telos Privacy or zkWallet?
No.
This is an easy point to confuse because Telos currently has multiple technologies associated with blockchain privacy.
CLOAK operates as an on-chain privacy protocol for Antelope networks including Telos Zero.
Separately, Telos Privacy, also known technically as zkTelos, is a privacy system deployed on Telos EVM and adapted from the zkBob protocol.
Telos Privacy currently uses shielded pools for supported EVM assets such as WTLOS and USDC.e and can be accessed through Telos’s zkWallet.
So:
CLOAK -> Telos Zero / Antelope privacy and private DeFi
Telos Privacy / zkWallet -> Telos EVM privacy
They address related problems using different infrastructure.
Understanding that distinction makes the wider Telos privacy ecosystem much easier to understand.
What else is CLOAK building?
CLOAK’s ambitions extend beyond private transfers.
As of August 2026, the project’s published roadmap includes several additional pieces of infrastructure.
CLOAK Lending
A privacy-oriented lending system is being prepared that is designed to allow users to borrow CLOAK USD against supported crypto assets, borrow crypto against CLOAK USD and participate in savings or insurance mechanisms.
CLOAK currently describes Lending as launching rather than part of its fully live product set.
Savanna IBC
CLOAK is testing trustless interoperability based on Savanna IBC, designed around on-chain light-client verification and permissionless relaying between Antelope networks.
ZEC and XMR access
The project also lists a custody-backed bridge for Zcash and Monero as being in development.
Mobile wallet
CLOAK’s desktop wallet is live for Windows, macOS and Ubuntu. Anino is being updated and reviewed as a future mobile wallet.
Not all of these components are live today, so it is important to distinguish deployed infrastructure from roadmap features.
Why CLOAK matters for the wider Telos ecosystem
CLOAK represents a different way of thinking about blockchain adoption.
For years, transparency was treated as an automatic benefit of putting financial activity on-chain.
But mass adoption creates a different question:
Do users actually want their entire financial history to be public?
For many applications, probably not.
Imagine putting:
company payroll, supplier payments, personal purchases, NFT ownership, treasury activity or trading strategies on a database that anyone can inspect indefinitely.
The problem is not that blockchain verification is undesirable.
The problem is assuming that verification requires complete public visibility.
Zero-knowledge technology challenges that assumption.
And CLOAK brings that idea directly into the Telos Zero ecosystem.
What CLOAK could mean for Web3 applications
The bigger opportunity may not be private token transfers at all.
It may be applications that can verify something about a user without learning everything about them.
CLOAK’s private authentication tokens are designed so an application can recognise a private user, account, order or position without necessarily learning which public wallet sits behind it.
That opens a much larger design space for Web3.
A game might need to establish that a player owns an eligible item without publicly exposing their entire wallet.
A DeFi application might need to authorise a position without permanently connecting it to a user’s public financial identity.
A blockchain campaign might eventually need to verify that an action occurred without requiring every piece of the participant’s wallet history to become part of the campaign experience.
The common idea is:
verify what matters without exposing what doesn’t.
That is likely to become increasingly important as Web3 applications move beyond crypto-native users.
CLOAK on Telos: the simple version
If all of the cryptography still sounds complicated, remember this:
Traditional public blockchains often work like a glass bank account.
Everyone can inspect what is happening.
CLOAK is trying to replace some of that glass with a cryptographic shield.
You can still prove that a valid transaction took place.
Telos can still verify the rules.
But the blockchain does not necessarily need to reveal all of the information behind that transaction to everybody else.
That is the fundamental idea behind CLOAK, shielded transactions and private DeFi on Telos.
And it is an important part of a much bigger question facing Web3:
Can blockchains remain verifiable without forcing their users to live financially in public?
CLOAK’s answer is yes.
Frequently Asked Questions
What is CLOAK on Telos?
CLOAK is an on-chain privacy protocol available on Telos Zero. It uses zero-knowledge proofs to support shielded digital assets, private transfers and privacy-aware application interactions while allowing transactions to remain verifiable on-chain.
What are shielded transactions?
Shielded transactions are blockchain transactions that use cryptography to hide sensitive information while still allowing the blockchain to prove that the transaction is valid.
Does CLOAK use zero-knowledge proofs?
Yes. CLOAK’s underlying ZEOS Caterpillar protocol uses Groth16 zero-knowledge proofs and BLS12-381 cryptography. Proofs are generated by the client and verified on-chain.
What blockchain does CLOAK use?
CLOAK is designed for Antelope networks and is currently live on Telos and Vaulta. On Telos it operates with Telos Zero infrastructure.
Is CLOAK the same as Telos Privacy?
No. CLOAK is an Antelope/Telos Zero privacy protocol. Telos Privacy, or zkTelos, is a separate privacy implementation running on Telos EVM.
Can CLOAK make TLOS transactions private?
CLOAK provides shielded asset functionality on Telos, allowing supported assets to enter its private system and be transferred within the shielded environment. Public deposits and withdrawals can still expose information at the boundaries of the private system.
Can CLOAK hide NFT ownership and transfers?
The ZEOS Caterpillar protocol underlying CLOAK supports both fungible tokens and NFTs. It includes dedicated zero-knowledge logic for handling indivisible NFT assets.
Is the CLOAK DEX live on Telos?
Yes. CLOAK currently lists its Hybrid DEX as live on Telos. The exchange combines a limit order book, constant-product AMM and concentrated-liquidity model within one trading engine.
What is private DeFi?
Private DeFi means using decentralised financial applications while reducing the amount of wallet identity, balance, transaction or strategy information exposed publicly on-chain.
Are CLOAK transactions completely untraceable?
CLOAK can hide information inside its shielded environment, but it does not make every surrounding piece of information invisible. Deposits and withdrawals have transparent boundaries, and metadata such as timing, networking or application behaviour can potentially weaken privacy.
Do I need a Telos account to use CLOAK?
CLOAK says users do not need their own public blockchain account for each private transaction. Transactions can be submitted through a shared restricted account while the private wallet separately proves authorisation.
What is the CLOAK token used for?
CLOAK is used to pay private transaction fees and abstract underlying Antelope blockchain resources such as CPU, NET and RAM. Part of private transaction fees is permanently burned.
What is ZEOS Caterpillar?
ZEOS Caterpillar is the shielded privacy protocol underlying CLOAK. It supports private fungible tokens, NFTs and application authorisation using zero-knowledge proofs.
Why is privacy important for blockchain?
Public blockchains can expose wallet balances, transaction histories, payments, trading strategies and counterparties. Privacy technology allows blockchains to preserve verification while reducing unnecessary exposure of users’ financial information.
How does Telos help CLOAK?
Telos provides the blockchain infrastructure underneath CLOAK. Telos mainnet now uses Savanna consensus with approximately one-second finality, providing fast settlement for applications including wallets, DeFi, privacy infrastructure and cross-chain systems.
Explore Telos through Afyniti
Understanding blockchain infrastructure is easier when you can interact with it rather than simply read about it.
Afyniti turns ecosystem education into Web3 quests, verified actions and XP-based progression, helping users explore networks such as Telos through structured campaign journeys.
For a broader introduction, read What Is Telos? A Beginner’s Guide to the Telos Network, then explore our guides to Telos wallets, Teloscan and Telos Instant Finality.
Afyniti’s Telos content follows the network from infrastructure and privacy through to the actions real users can complete on-chain.