LayerZero integrates TACEO Merces for private cross-chain token transfers
In brief
- LayerZero and TACEO integrated Merces privacy layer to hide participant identities and transfer amounts in cross-chain transactions
- Merces mainnet launched September 24, 2026 on Monad and World Chain blockchains
- Multi-party computation and CoSNARKs technology verify state changes while preserving privacy
- Merces processed 5 million demo transactions on testnets at ~300 transactions per second
- Built-in compliance features include allowlists, AML hooks, and selective disclosure mechanisms
How Merces Shields Cross-Chain Activity
Merces wraps standard ERC-20 tokens, like USDC, into private virtual accounts using a technique called secret sharing. The system relies on multi-party computation, a cryptographic approach where multiple parties jointly compute a function over their inputs without revealing those inputs to each other. State changes get verified on-chain through CoSNARKs technology, a framework for generating cryptographic proofs in a distributed manner.
TACEO reports that Merces has already processed roughly 5 million demo transactions on testnets at approximately 300 transactions per second. That throughput matters for institutional flows.
Why Institutions Care About Privacy
Banks, asset managers, and corporate treasuries have long cited the transparency of public blockchains as a dealbreaker. Most existing privacy solutions operate within a single chain. By integrating directly with LayerZero at mainnet launch, Merces sidesteps that limitation.
Stablecoin flows, in particular, have become a primary use case. When a corporation moves millions in USDC between chains, competitors and counterparties shouldn't see the amount or the destination. Merces includes allowlists, anti-money laundering hooks, and selective disclosure mechanisms as built-in compliance features, addressing regulator and compliance officer concerns.
The Team Behind Merces
TACEO spun out of TU Graz, the Austrian university with a serious pedigree in applied cryptography research. The firm was established in July 2022 by cryptographers who contributed to notable cryptographic standards including Poseidon and SPHINCS+. SPHINCS+ is one of the post-quantum signature schemes selected by NIST for its post-quantum cryptography standardization process.
Cameron Nili, LayerZero's Banking & Capital Markets Lead, underscored the fit. Cross-chain transfers have gotten fast and cheap—what they haven't gotten is private. That's the gap this integration targets.
