The research paper Toxic Decoys: A Path to Scaling Privacy-Preserving Cryptocurrencies has been accepted for publication in the Proceedings on Privacy Enhancing Technologies (PoPETs) and will be presented at corresponding symposium, PETS 2025, which takes place in Washington, DC, from July 14-19, 2025.

This work tackles the ever-growing storage demands of anonymous cryptocurrencies. It introduces a new scheme that randomly partitions the fresh outputs of transactions into fixed-size bins. Subsequent transactions reference these outputs when they transfer the tokens further.

The basic idea is that once a bin has been referenced as many times as its size, it can safely be pruned from the ledger. This preserves both privacy and security, but reduces the data that needs to be stored on the distributed ledger. Randomization ensures that attackers cannot predict in which bin an output will be placed. This prevents targeted flooding, allowing the system to scale by increasing the number of bins while remaining resilient under adversarial conditions. The research paper establishes this result by formally defining a cryptocurrency and its unpredictability, untraceability, and scalability notions. The work also presents a construction using Merkle trees that illustrates how partitioning and pruning are possible over a well-known authenticated data structure.

A detailed simulation of the new technique, using a transaction data set gathered from the Monero cryptocurrency, shows that the storage space can be reduced by approximately 60% while maintaining the same degree of privacy.

The full paper appears in the Proceedings on Privacy Enhancing Technologies 2025. Congratulations to François-Xavier Wicht for this success.