A new Ethereum privacy proposal suggests using modular design to align with EU GDPR regulations while maintaining decentralization. The proposal, introduced by Eugenio Reggianini, emphasizes the importance of pushing personal data management to edges (wallets and DApps), utilizing offchain storage with metadata-erasure, and cryptographically splitting roles. This transition could integrate several privacy-enhancing technologies (PETs) such as proto-danksharding, zk-SNARKs, Fully Homomorphic Encryption, and more, reducing personal data exposure and facilitating GDPR compliance. The modular compliance strategy breaks down GDPR implications across the execution, consensus, and data availability layers of Ethereum, focusing data controllership on the application layer while ensuring only necessary encrypted data is processed. However, the success of this framework will rely on broad community support and alignment with EU regulators.

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