Developer Says Ethereum Lacks Poseidon Precompile, Blocking zkEVM Privacy on Layer 1

Published: 2026-02-27 11:00:05 |

Ameen Soleimani, a prominent developer, criticized Ethereum for not implementing the Poseidon hash precompile — a low-cost, EVM-level function that accelerates zk proof verification — arguing this omission prevents practical Layer 1 privacy and raises transaction costs for shielded transfers. Poseidon has been available on other chains (Solana, Starknet, Stellar) since 2020–2022. Soleimani said Starknet offered assistance but was rebuffed and highlighted the stalled EIP-5988 proposal (filed in 2022) to add Poseidon to the EVM. He argues Ethereum’s roadmap pushes privacy to Layer 2 while neglecting essential zk primitives at Layer 1, keeping private transactions expensive. The debate follows prior privacy roadmap comments from Vitalik Buterin in 2025 and public hopes from industry figures like Ernst & Young’s Paul Brody for concrete action in 2026. For traders: the issue signals ongoing technical friction in Ethereum’s privacy development, potential delays to native shielded transfers, and comparative advantages for chains already supporting Poseidon-derived zk tooling.

Neutral

The news is primarily technical and governance-focused rather than market-moving in the short term. Lack of a Poseidon precompile creates a functional disadvantage for native Layer 1 privacy on Ethereum and could favor competing chains (Solana, Starknet, Stellar) that already support Poseidon, potentially shifting developer activity and innovation toward those ecosystems. However, immediate price impact on ETH is likely limited: the announcement contains no new protocol change, funding event, or timeline — only criticism and a stalled EIP (5988). Historically, technical delays or governance disputes (e.g., postponed Ethereum upgrades) tend to produce short-term volatility when tied to concrete dates or large ecosystem actors; absent those factors, effects remain muted and gradual. Short-term: traders may see increased attention and speculative flows into rival chains or layer-2 projects that advertise cheaper zk tooling, producing modest sector rotation. Expect heightened developer and community discussion, but not an immediate sell-off of ETH unless follow-up news (rejection of Poseidon with clear roadmap) emerges. Long-term: if Ethereum continues to defer Layer 1 zk primitives, it could slow adoption of native shielded transfers and raise costs for privacy-centric dApps, encouraging builders to deploy on chains with built-in Poseidon support. That could gradually reduce Ethereum’s share of zk-focused activity and fee revenue for certain use cases. Conversely, if Ethereum adopts Poseidon (via EIP or alternative), that would materially improve Layer 1 privacy economics and be bullish for ETH’s product competitiveness. For traders, the story is a watch item: monitor EIP-5988 progress, developer discussions, and any client-level or hard fork proposals; these are the events that could shift the market from neutral to bullish or bearish.