layerzero plain logo
LayerZero integrates with TACEO Merces to enable private cross-chain token transfers
The collaboration wraps ERC-20 tokens into confidential representations using multi-party computation, targeting institutional demand for on-chain privacy.
Cross-chain transfers have gotten fast. They’ve gotten cheap. What they haven’t gotten is private. LayerZero and TACEO are trying to fix that last part.
The two projects have integrated TACEO’s Merces privacy layer with LayerZero’s cross-chain messaging infrastructure, enabling token transfers across blockchains that shield both participant identities and transfer amounts. The integration coincides with Merces’ mainnet launch on Monad and World Chain on September 24, 2026.
What Merces actually does
The core mechanic is deceptively simple in concept: Merces wraps standard ERC-20 tokens, like USDC, into private virtual accounts using a technique called secret sharing. The balances exist on-chain, but no single party can read the plaintext data.
Under the hood, the system relies on multi-party computation, or MPC. This is a cryptographic approach where multiple parties jointly compute a function over their inputs without revealing those inputs to each other. In practical terms, it means Merces can process transactions while keeping the underlying financial details confidential.
State changes get verified on-chain through what TACEO calls 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.
AI, tech, and the markets they move—in one daily briefing.
Daily. Free. Join 34,000+ readers across crypto, finance, and policy.
Why LayerZero’s involvement matters
Cameron Nili, LayerZero’s Banking & Capital Markets Lead, framed the integration as filling the remaining privacy gaps in cross-chain transfers. His emphasis on institutional use cases is telling. Banks, asset managers, and corporate treasuries have long cited the transparency of public blockchains as a dealbreaker. When your competitor can track your treasury movements in real time, the appeal of on-chain finance diminishes considerably.
The integration means that a token wrapped through Merces can now travel across LayerZero-supported chains without exposing the details that institutions want to keep confidential.
The team behind the cryptography
TACEO spun out of TU Graz, the Austrian university with a serious pedigree in applied cryptography research. TACEO was established in July 2022, founded 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.
Compliance is baked into the architecture as well. Merces includes allowlists, anti-money laundering hooks, and selective disclosure mechanisms. Rather than building pure privacy and retrofitting compliance later, TACEO built the compliance tooling into the protocol from the start.
What this means for on-chain finance
Stablecoin flows, in particular, have become a primary use case. When a corporation moves millions in USDC between chains, the current default is full public visibility. Merces directly targets that pain point.
Most existing privacy solutions operate within a single chain. By integrating directly with a leading cross-chain messaging layer at mainnet launch, TACEO has positioned Merces as a multi-chain privacy solution from day one, rather than a single-chain tool that might eventually expand.