Why Institutional Custody Breaks on Shielded Chains | Lukas Helminger (TACEO) at ETHConf

Sun, Aug 2, 2026, 12:00 AM

In this talk, Lukas Helminger from TACEO presents a problem his team discovered in recent weeks: why institutional custody breaks on shielded chains. TACEO is building a network for encrypted compute focused on the identity and finance layers. He frames the stakes by looking at the scale of custody today, citing Coinbase holding roughly $300 billion in assets under custody at the market's height (including most ETFs), BitGo not far behind, and Fireblocks securing around $10 trillion in transaction volume across over 2,000 institutions. This makes institutional custody critically important to crypto itself. He then surveys the privacy renaissance of recent months, highlighting ZK based projects like Aleo, Aztec, Midnight, Miden, and Zcash, plus Ethereum's roadmap toward client side proving. All of these models assume self custody, where you hold your own key and run your own prover so the secret never leaves your hands for maximum privacy. Lukas explains the tension: the institutional world cannot rely on a single entity holding a key, since that creates unacceptable risk for regulated entities. State of the art institutional custody instead splits the key into shares (for example a customer share, a custodian share, and a backup share) so no party ever holds the whole secret, and uses threshold signatures, a form of multi-party computation, to authorize transactions without ever reconstructing the key in one place, with ECDSA being a commonly thresholdized algorithm. The problem is that on shielded chains, transactions are authorized not by signatures but by zero knowledge proofs, which are far more complex, and none of the existing custodians have a way to thresholdize a ZK proof. He presents the solution from academia: collaborative SNARKs (co-SNARKs), introduced about four years ago by Dan Boneh and Alex, which place the zero knowledge proof inside a multi-party computation protocol so the entire proving system is thresholdized, producing a proof indistinguishable from a standard one that verifies on chain without protocol changes. He shares that TACEO has been building this for over two and a half years, with a network live for two months doing 100,000 transactions per day across private payments, yield, and tokenization, and tooling for co-Circom and Noir with surprisingly low performance overhead. He closes inviting custodians who need to onboard shielded assets to talk, since this is a key unaddressed blocker to bringing privacy to institutions. 00:00 Introduction 00:12 What TACEO Is Building 00:30 A Problem Hidden in Plain Sight 00:52 The Scale of Custody Today 01:25 Fireblocks and $10 Trillion in Volume 01:52 The Privacy Renaissance 02:32 Why These Models Assume Self Custody 02:57 Why Single Key Custody Fails Institutions 03:24 How State of the Art Custody Splits Keys 04:01 Threshold Signatures and Multi-Party Computation 04:35 Why ECDSA Is Commonly Thresholdized 05:08 Where Things Break in the ZK World 05:43 Collaborative SNARKs From Academia 06:17 How Co-SNARKs Thresholdize Proving 06:39 How Far TACEO Has Come 07:11 Tooling for Co-Circom and Noir 07:30 Why the Performance Overhead Is Low 07:51 A Call to Custodians 08:26 Closing _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ *ETHConf 2026* ETHConf is a 3 day event for founders, industry leaders, and builders who are excited about the possibilities of building on top of Ethereum. Connect with 2,000+ top innovators in crypto, finance, technology, and policy at our inaugural three-day event packed with showcases, demos, partnerships, and conversations shaping the future of the global economy. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ✅ *Follow ETHConf* X: https://x.com/ethconf Website: https://ethconf.com _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 🎟️ Get your early bird tickets for ETHConf 2027: https://ethconf.com/2027#tickets 🎤 View the full ETHConf 2026 Speaker Schedule: https://ethconf.com/schedule _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _