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Sodot, a crypto key management company specializing in self-hosted MPC and TEE products, has added Multi Party Computation signing support for the privacy focused Layer 1 blockchain, Aleo.
According to an announcement shared with Analytics Insight, the partnership is meant to address an alarming $1.22 trillion confidentiality risk that could challenge the adoption of stablecoin payment rails by institutions.
Stablecoin use by institutions has increased due to faster settlement and lower costs. Yet most activity still runs on public blockchains which operate on transparent rails. While transparency is one of the core features of the blockchain, it threatens exposing balances, transaction flows and counterparties’ positions.
This introduces an operational and strategic risk for institutional entities that run enterprise treasuries and regulated financial services.
Aleo’s recently published Privacy Gap Report reveals the confidentiality risk facing the stablecoin market in detail. Adjusted stablecoin volume reached $1.25T in September 2025, noted the report. Custodian activity rose 256 percent year over year in the same dataset.
However, over the past 24 months, only $624.4M flowed through private rails. The report further highlights that nearly 99% of transactions remained on transparent networks, largely because existing MPC wallets can expose trade metadata to service providers, exposing firms to front-running risks.
The report also cited examples of on-chain visibility danger for active firms. It pointed to Wintermute averaging about 73,000 daily transactions. It also referenced OSL with an average ticket size of $1.47M, as described in the report. The report argued that visible transaction patterns can reveal inventory movement, counterparty exposure and in some cases leak price discover information meant to remain confidential.
In addition to this, bad actors such as market manipulators and cyber criminals can get ahead of the curve by simply paying attention to blockchain transactions.
Aleo identifies as one world’s first-mover in private smart-contract blockchain infrastructure. This is possible through its Provable Shield Wallet, which uses zero-knowledge cryptography to conceal on-chain transactions.
With Sodot’s MPC support integration, the collaboration addresses a major infrastructure gap for stablecoin institutional adoption.
“With adding MPC support for Aleo by Sodot, we’re removing the final friction point for private institutional finance. This partnership delivers the ‘Holy Grail’ of on-chain assets: data privacy via zero-knowledge proofs, backed by multi-party security. This goes beyond just protecting sensitive financial data; we’re building the trustless infrastructure required for the next $10 trillion in private capital to move on-chain.” said Leena Im, COO, Aleo
Notably, Sodot’s MPC solution is currently the only one that is compatible with Aleo’s distinct crypto architecture. The development is a significant milestone given that most institutions’ security posture is often dependent on MPC to distribute risks.
At the core, Sodot is introducing MPC signing support for Aleo’s unique transaction architecture. This will allow customers, including custodians, asset managers, and leading wallet providers, to be able to integrate Aleo’s end-to-end encryption into their existing workflows. In doing so, organizations can seamlessly sign private on-chain transactions on Aleo while maintaining control of their key material. This is possible through Sodot’s distributed key management solution.
“At Sodot, our mission is to redefine how crypto companies manage their most sensitive keys. By implementing MPC for Aleo, we are enabling our customers to extend the core promise of security into the realm of transactional privacy, for both funds and data,” said Ido Sofer, CEO of Sodot.
The announcement also included a projection tied to adoption. It noted that if 5% of institutions used Aleo private rails, about $1B to $2.5B in stablecoin transactions each month could become hidden from outside observers.
“Following the shared work by the teams, Aleo is better positioned to meet the security and operational standards required for institutional adoption,” emphasized Sofer.
