Private Relay uses ingress and egress relays. The ingress proxy does know your IP but not which sites you are visiting and what you are doing. The egress proxy

Private Relay uses ingress and egress relays. The ingress proxy does know your IP but not which sites you are visiting and what you are doing. The egress proxy is only connected to the ingress, sees what you visit but does not know who you are. Both proxies are run by different parties. With a VPN you would have to trust one provider, who sees all of your traffic.