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Vitalik Buterin and Davide Crapis Propose Privacy-Preserving Payment System for AI APIs

Ethereum co-founder Vitalik Buterin and Ethereum Foundation AI lead Davide Crapis have outlined a new framework to make interactions with large language models (LLMs) private, secure, and spam-resistant, without sacrificing efficiency.

In a blog post published on Wednesday, the pair argued that as AI chatbot usage accelerates, the current payment and access models expose users and providers to significant privacy and operational risks. Their proposed system leverages zero-knowledge proofs and smart contracts to allow anonymous yet verifiable payments for AI services.

A privacy dilemma for AI providers

Every time a user sends a message to an AI chatbot, an API call is made. According to Crapis and Buterin, managing these calls presents a difficult trade-off for providers.

Most platforms today rely on identity-based access, requiring users to submit personal information such as email addresses or credit card details. While this guarantees payment, it creates data privacy concerns and leaves usage logs vulnerable to leaks, subpoenas, or misuse.

The alternative, processing payments on-chain for each request, solves the identity issue but introduces new problems. On-chain payments are often slow, costly, and publicly traceable, undermining anonymity.

Their solution proposes that users deposit funds, such as USDC, into a smart contract. From there, they can make multiple API requests while using zero-knowledge proofs to confirm they have sufficient balance, without revealing their identity or linking individual queries together.

Anti-spam mechanism and stake slashing

To prevent abuse, including double-spending, spam, jailbreaking attempts, and the creation of prohibited content, the proposal introduces a dual-staking enforcement mechanism.

If a user attempts to cheat the system by double-spending, their deposit can be claimed by anyone, including the server operator. In cases where a user violates the platform’s terms of service, their staked funds would be permanently burned, with the slashing event recorded on-chain.

In late January, Buterin revisited and publicly revised a core position he held in the early years of blockchain design, citing advances in zero-knowledge technology and real-world resilience concerns as key reasons for the shift.

 

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