Expressions of Interest

Indications of Interest: Balancing Privacy and Liquidity on Obscura

As detailed in the Lifecycle and Privacy, Obscura’s base-layer protocol offers exceptional privacy: No information is leaked to third parties, either before or after a trade is matched and settled.

While this ensures optimal execution quality by fully protecting trader anonymity, it introduces a tradeoff: Orders are invisible to others, requiring traders to wait for natural counter-flow to complete their trades. To address this, Obscura introduces Indications of Interest (IOIs)—an optional feature that allows traders to trade off some privacy for increased execution speed.

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What Are Indications of Interest?

Indications of Interest are optional flags that traders can include in their handshake, advertising certain properties of their order to attract potential counterparties. These indications allow traders to reveal selective information about their order without compromising its full details.

Obscura supports the following indications of interest:

1. Order Type: Whether the order is limit or pegged to the midpoint.

2. Trading Pair: The base/quote pair (e.g., SOL/USDC).

3. Order Side: Whether the order is a buy or sell.

4. Limit Price: The maximum/minimum acceptable price for the trade (e.g., 50 SOL/USDC).

5. Order Size: The size of the order (e.g., 200 SOL).

6. Minimum Fill Size: The smallest acceptable match size (e.g., at least 10 SOL per fill).

These indications are implemented as zero-knowledge predicates within the handshake tuple. Each predicate is cryptographically proven to ensure the indications are valid, preserving the integrity of the trading process.

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Using Indications of Interest

By including indications of interest, traders can strategically reduce privacy to increase liquidity. For example, a trader might broadcast that they are placing a buy order for SOL/USDC at the midpoint price, without revealing the full size or other sensitive details of the order.

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Lit Order Book Functionality

If all indications of interest are enabled and cryptographically proven, the order effectively becomes lit, creating an in-memory lit Central Limit Order Book (CLOB) within Obscura. This allows for seamless integration between dark and lit trading, enabling traders to toggle between complete privacy and increased visibility depending on their execution needs.

With Indications of Interest, Obscura provides flexibility for traders to balance privacy, liquidity, and execution speed, ensuring a dynamic trading environment that meets the needs of all participants.