Tornado Cash
Crypto Overview
Overview
Tornado Cash is a decentralized cryptocurrency mixer protocol built on Ethereum, launched in 2019. Its native token TORN serves as a governance token for the protocol. The primary purpose is to enhance transaction privacy on the Ethereum blockchain by breaking the on-chain link between source and destination addresses.
Intended Utility
The TORN token's intended utility is primarily for governance of the Tornado Cash protocol. Token holders can create and vote on proposals affecting the protocol's development and operation. Additionally, TORN stakers can earn rewards for participating in governance.
Actual Utility
The protocol has faced significant regulatory challenges, with the U.S. Treasury's Office of Foreign Assets Control (OFAC) sanctioning Tornado Cash in August 2022, citing its use in money laundering activities. While the protocol continues to operate due to its decentralized nature, its actual utility has been severely impacted by these sanctions.
Token Distribution and Governance
The initial token distribution allocated 10% to founders and developers with a 1-year vesting period, 5% to early supporters, and the remaining 85% designated for governance incentives and community treasury. The distribution model appears reasonably fair with appropriate vesting periods.
Technical Implementation
The protocol uses zero-knowledge proofs to enable private transactions while maintaining compliance capabilities through optional transaction viewing keys. The technology itself is sophisticated and represents genuine innovation in blockchain privacy.
Crypto Impact
To assign a comfort level investing in Tornado Cash from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to Tornado Cash.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
You only have one vote per asset so use it wisely.
You can change your vote if you change your mind.