Last Updated on September 24, 2022
Tornado Cash is a non-custodial privacy solution for the Ethereum network based on zkSNARKs technology.
How It Works: Tornado Cash utilizes smart contracts that accept deposits made in ETH that are then withdrawn to other addresses. Since the withdrawal is made from the project’s smart contract liquidity pools, there is no way of knowing who the original sender is.
Monero and ZCash being notable examples. But both projects have their own chains, and there is no way for them to cover privacy on other blockchains as well.
Technical: Tornado Cash generates a secret hash every time a user deposits assets. The smart contracts accept the deposit along with the hash, called a commitment. The purpose of the commitment is to identify the real sender and prove during the withdrawal process that the user in question owns the assets. By inputting the hash upon making the request, the user essentially confirms their identity while remaining anonymous on-chain to everyone else.
How Decentralized? Tornado Cash is completely owned and governed by its own community. This was made possible in May 2020 when the development team of the platform waived authority atop the protocol’s multi-signature online wallet in a trusted setup ceremony. After that turnover, even the founders along with the developers have absolutely no control over Tornado Cash and the platform can be considered to have been completely decentralized
Source: https://www.certik.com/resources/blog/7wuz4yIiH6ULQs6894WfTW-what-is-tornado-cash