Aztec Flips the Switch on Ethereum's Privacy Layer
Aztec Network, the zero-knowledge privacy Layer 2 built on Ethereum, officially launched its $AZTEC token generation event on February 12, 2026. The TGE unlocks token transferability and activates the AZTEC/ETH Uniswap v4 liquidity pool, marking the transition from a staked-only network to a fully tradeable ecosystem. CoinGecko listed $AZTEC immediately, placing it at rank 426 by market cap within hours of going live.
The launch caps a seven-year development cycle that began with a $2.1 million seed round from ConsenSys in 2018, progressed through a $17 million Series A led by Paradigm, and culminated in a $100 million Series B fronted by a16z in 2022. The total capital raised across equity rounds exceeds $119 million, not counting the $61 million community token sale that closed in December 2025.
A $61 Million Auction That Rewrote the TGE Playbook
Rather than following the airdrop model that has become default for L2 launches, Aztec ran a Continuous Clearing Auction co-developed with Uniswap Labs. The auction collected 19,476 ETH from more than 16,700 participants over four days in early December, starting at a floor valuation of $350 million, a 75% discount to its equity financing rounds.
Per-user caps of 240 ETH were enforced to prevent whale concentration. Aztec reported that roughly half of the capital came from existing community members, including testnet operators and early users of the now-shuttered Aztec Connect privacy bridge. The format was specifically designed to prevent front-running and timing games that have plagued other token launches.
The total genesis supply is 10.35 billion AZTEC tokens. The public sale distributed 1.547 billion tokens, representing 14.95% of supply. At TGE, a Uniswap v4 liquidity pool seeded with 273 million AZTEC tokens (2.6% of total supply) and a matching ETH amount at the final clearing price went live to bootstrap secondary market trading.
Inside Ignition Chain: 3,400 Sequencers, Zero Team Nodes
What separates Aztec from every other L2 currently running on Ethereum is its architecture. Ignition Chain, the network's mainnet that launched in November 2025, hardcodes decentralized sequencing, proving, and governance directly into the base protocol.
The numbers tell the story. Over 185 operators across five continents run infrastructure on Ignition, with 3,400+ sequencers now active. Block rewards distribute every epoch (every 32 blocks), splitting 70% to sequencers and 30% to provers who generate zero-knowledge block proofs. Critically, neither Aztec Labs nor the Aztec Foundation run any sequencers or participate in governance, a claim almost no other L2 can make at launch.
Validators must stake 200,000 AZTEC tokens to participate, and nearly 556 million tokens were already staked before the TGE. Fractional staking is not currently supported, creating a meaningful barrier to entry that filters for committed operators rather than passive yield seekers.
What $AZTEC Holders Should Know Right Now
The governance vote that triggered the TGE required at least 100 million AZTEC tokens to participate, with a two-thirds supermajority needed to pass. The community cleared that bar on January 26, 2026. A seven-day voting window followed by a seven-day execution delay brought the unlock to February 12.
For holders who participated in the December auction, the immediate steps are straightforward. Token Vault creation on Ethereum secures tokens and enables staking and governance before withdrawal. Holders with 200,000+ tokens can stake immediately and earn block rewards. Those below the threshold can withdraw without staking.
One detail worth watching: team and investor tokens are locked from governance participation for 12 months. This means the community effectively controls the protocol's direction for its entire first year, a structure designed to prevent the insider governance capture that has dogged other DeFi protocols.
Privacy as Infrastructure, Not Just a Feature
Aztec's launch arrives at a moment when privacy in crypto occupies a paradoxical position. Regulators globally are tightening surveillance requirements, with the EU's MiCA framework and FinCEN's proposed rules both pushing toward more transparency. Yet demand for confidential transactions has never been higher, driven by institutional players who need trade privacy for competitive reasons, not evasion.
Aztec's approach threads this needle by building privacy at the execution layer using zero-knowledge proofs rather than at the transaction layer like Tornado Cash or mixing services. Smart contracts on Ignition Chain can be fully private, partially private, or fully public, giving developers the flexibility to build compliant applications that still protect sensitive data.
This positions Aztec differently from other privacy-focused projects. Where Aster Chain is building a privacy-first L1 focused on hidden order books for perpetuals trading, Aztec aims to be general-purpose infrastructure for any application that needs confidential computation on Ethereum.
For crypto card users and wallet holders, the implications are practical. Private smart contracts could enable confidential payment channels, shielded reward calculations, and spending data that remains invisible to onchain observers. Projects building self-custody wallets could integrate Aztec's privacy layer to protect transaction histories while maintaining the verifiability that regulators require.
The Vitalik Buterin connection adds weight. Buterin participated in Aztec's Series A as an angel investor and has repeatedly advocated for ZK-based privacy as Ethereum's path forward, arguing that privacy and compliance are not mutually exclusive when built with zero-knowledge cryptography.
FAQ
What is Aztec Network? Aztec is a privacy-preserving Layer 2 on Ethereum that uses zero-knowledge proofs to enable fully private smart contracts. Its Ignition Chain mainnet launched in November 2025 as the first decentralized L2 with hardcoded decentralized sequencing and proving.
How much did the $AZTEC token sale raise? The community auction raised 19,476 ETH (approximately $61 million) from over 16,700 participants in December 2025, using a Continuous Clearing Auction mechanism co-developed with Uniswap Labs.
How many AZTEC tokens exist? The total genesis supply is 10.35 billion tokens. The public sale distributed 14.95% of supply. A Uniswap v4 pool with 273 million tokens (2.6% of supply) bootstraps secondary market liquidity.
Who invested in Aztec? Key backers include a16z (led the $100M Series B), Paradigm (led the $17M Series A), ConsenSys, Coinbase Ventures, Variant Fund, and Vitalik Buterin as an angel investor. Total equity funding exceeded $119 million.
Can I stake AZTEC tokens? Yes, but you need a minimum of 200,000 AZTEC tokens. Staking secures Ignition Chain and earns block rewards. Fractional staking is not currently supported.
Overview
Aztec Network's TGE marks the culmination of a seven-year build toward programmable privacy on Ethereum. With $119 million in equity funding, a $61 million community-first token sale, 3,400+ active sequencers, and a governance structure that locks insiders out for 12 months, Aztec enters the market with more decentralization credentials than most L2s achieve in their third year. Whether the market values privacy infrastructure during a period of extreme fear remains the open question, but the technical foundation is live, funded, and running without training wheels.
Recommended Reading
- Aster Chain Targets March for Its Privacy-First L1 Mainnet, Betting That Hidden Orders Beat Transparent Trading
- Vitalik Buterin Wants Ethereum to Power AI With ZK Privacy Payments, Not Race for AGI
- Ethereum's Staking Ratio Surpasses 30% for the First Time, Locking $120 Billion and Tightening Liquid Supply
