What is Soda Labs? A Private Trading Infrastructure on Blockchain with Bubble

Public blockchains allow users to verify transactions but also make balances, cash flows, and financial activities easily traceable. This is one of the barriers for banks, investment funds, and businesses when implementing financial services on the blockchain.

Soda Labs develops Bubble to address this issue through encrypted data computation technology, helping to protect sensitive information without the need to build a separate blockchain. So what is special about Soda Labs? Let's explore this private trading infrastructure with Coin68 in the article below!

What is Soda Labs? A Private Trading Infrastructure on Blockchain with Bubble

What is Soda Labs?

Soda Labs is a company that develops data security infrastructure for financial applications on the blockchain. The main product of the project is Bubble, a co-processor that allows smart contracts to perform computations on encrypted data without revealing the input information.

Soda Labs Homepage

Instead of building a separate Layer 1 blockchain, Bubble operates as an additional computation layer for existing networks. Smart contracts continue to process transactions on the blockchain, while computations related to sensitive data are sent to an external secure computing network.

This solution targets banks, payment organizations, investment funds, and asset tokenization platforms that need to protect transaction information while still leveraging the verification capabilities of the blockchain.

What Makes Soda Labs Special

The uniqueness of Soda Labs lies in its combination of secure computation technology with a decentralized data access system, allowing applications to process sensitive information without transferring all operations to a private blockchain.

Computation on Encrypted Data

Bubble uses Garbled Circuits (GC) technology combined with Multi-Party Computation (MPC) to perform calculations without disclosing input data. In this, Garbled Circuits convert computations into cryptographic circuits, while MPC allows multiple parties to collaboratively process information without any party holding all the original data. Bubble uses AES-256 encryption standards to protect input data and the gcVM execution environment to handle secure computations.

How Transactions are Executed in gcVM

This mechanism can be applied to balance checks, updating trading positions, or organizing sealed bids. For example, a lending protocol can check collateral asset conditions without publicly disclosing the entire financial information of the user.

However, security depends on the safety assumptions of the MPC network, particularly the number of parties that can collude with each other. Therefore, this technology does not imply that data is absolutely protected in all situations.

Access Control and Data Disclosure

In addition to secure computation, Bubble uses an Access Control List (ACL) to determine which addresses are allowed to use or request data decryption. Through this mechanism, applications can limit access to information based on specific entities. For instance, a business can protect transaction data from the public while still granting necessary access rights to auditors or compliance departments.

This approach helps combine privacy with financial oversight. However, meeting legal requirements still depends on how each organization designs its access and information disclosure policies.

Architecture and Operation of Bubble

Bubble is built on a model that combines smart contracts on the blockchain with an external MPC computing network. The main components include the Solidity library, access management contracts, connection services, and an encrypted data processing network.

The operational process consists of 4 steps:

• Step 1: Input Data Encryption

Users interact with the application through Bubble's development toolkit. The system provides a mechanism for users to recover the AES key on the device and encrypt information before sending transaction requests. This way, sensitive data does not need to be uploaded to the blockchain in a public manner.

• Step 2: Sending Calculation Requests

When a smart contract needs to process sensitive data, the application calls the MpcCore.sol library. Infrastructure contracts check access rights and then emit events describing the calculations to be performed. Data on the blockchain is represented by reference codes instead of directly storing the original information.

• Step 3: Off-Chain Processing

The connecting service receives the event and forwards the request to the MPC network. Here, participants collaborate to perform calculations through Garbled Circuits without needing to disclose the input data. The results after processing are linked to the corresponding reference codes so that the smart contract can continue to use them.

• Step 4: Retrieving and Decoding Results

Depending on the application design, the output data can be encrypted with the user's key or disclosed to the smart contract through a decryption request mechanism. It is important to note that the results decoded and returned to the contract may become public data on the blockchain. Therefore, developers must clearly define which information needs to be kept confidential and which can be disclosed.

Bubble provides tools integrated with Solidity but does not automatically turn every smart contract into a private application. Developers still need to adjust data types, move sensitive calculations to MPC, and set appropriate access rights.

Features of Soda Labs

Secure Money Transfer Feature

• Money Transfers and Stablecoins: Supports protecting balances, transaction values, and payment information, suitable for activities such as payroll, remittances, and corporate treasury management.

• Decentralized Finance (DeFi): Allows building trading, lending, and auction applications that restrict the public disclosure of financial positions or strategies.

• Real-World Asset Tokenization (RWA): Supports protecting ownership information and distributing tokenized assets while allowing data disclosure based on access rights.

• Investment Fund Management: Secures portfolios, positions, and asset rebalancing activities while still supporting data provision for audits.

• Wallet and Application Integration: Provides SDKs and Solidity libraries for developers to add encrypted data processing functionality to existing products.

• Deployment Options: Bubble supports three models: Shared Bubble using common infrastructure, Private Bubble for organizations wanting to operate independently, and Consortium Bubble allowing multiple members to participate in operations.

Additionally, Bubble distinguishes different levels of privacy, from public balances to protected balances and transactions that cannot be directly linked based on design mechanisms. This means that concealing transaction values does not necessarily hide wallet addresses or the entire relationship between transactions.

Token of Soda Labs

Currently, Soda Labs has not disclosed information about governance tokens or utility tokens. Information related to total supply, token allocation, unlocking schedules, and release plans has also not been updated. Coin68 will provide updates as soon as detailed information is available.

Development Roadmap of Soda Labs

Currently, the development roadmap for the Soda Labs project has not been provided in detail. Coin68 will update as soon as information is available.

Development Team of Soda Labs

Development Team of Soda Labs

• Avishay Yanai (Co-founder, CEO): PhD in cryptography and multi-party computation from Bar-Ilan University, with 5 years of experience developing MPC technology for enterprises at VMware.

• Meital Levy (Co-founder, CTO): PhD in algorithm optimization from Tel Aviv University, experienced in developing distributed systems and cryptographic protocols, previously led the development of the SCAPI library.

Investors and Funding of Soda Labs

Investors and funding of Soda Labs. Source: crypto-fundraising.

On October 8, 2026, Soda Labs announced the completion of a $3 million Seed funding round, with all investments coming from NextBlock, according to a statement published on Chainwire.

Summary

Through the article from Coin68, it can be seen that Soda Labs is developing Bubble to enhance the ability to process private data for financial applications on public blockchains. By combining Garbled Circuits, MPC, and access control mechanisms, the project allows computations on encrypted data without the need to build a separate blockchain.

Note: The content of this article is for informational purposes only and does not constitute investment advice or a recommendation to use any financial products. Readers should conduct their own research, assess technology risks, and comply with current legal regulations before making any decisions related to digital assets.