Privacy Features
How Obscura Solves the Core Problems of Current Decentralized Exchanges
In the introduction, we outlined three major challenges faced by current decentralized exchanges (DEXes): lack of pre-trade privacy, lack of post-trade privacy, and MEV (Miner Extractable Value). By utilizing pairwise MPC matching and zero-knowledge settlement within the MPC-ZKP Architecture, Obscura effectively addresses all three issues:
1. Pre-Trade Privacy
Wallets are maintained locally by relayers, ensuring the smart contract never accesses order or balance information.
Handshakes between relayers propagate commitments to orders rather than plaintext orders, keeping order details private until a match occurs.
No information about an order is revealed in advance of a valid match, providing complete privacy before trades.
2. Post-Trade Privacy
On-chain state consists only of a Merkle tree of wallet commitments, ensuring that balances, orders, and trade details are never publicly visible, even after a successful match.
Counterparties to a trade only learn the specific tokens swapped during a match, but not the full size or context of the trade.
If no match occurs, no additional information is revealed, preserving privacy for unmatched orders.
3. Minimal MEV
Obscura’s smart contract relies exclusively on zero-knowledge proofs to verify trades.
Block producers and sequencers have no ability to front-run, back-run, or sandwich trades, eliminating MEV attacks.
Obscura’s Privacy Properties
Third-Party Privacy
External parties, including block producers or sequencers, learn nothing about the exchange’s internal state.
Only global token inflows, outflows, and the total number of open orders are visible.
Counterparty Privacy
Counterparties in a trade learn which tokens were swapped if a match occurs but gain no additional insights (e.g., total wallet balances or order size).
If no match occurs, counterparties only learn that no valid order was available.
Relayer Privacy
Relayers managing a wallet gain view-only access to its contents (e.g., balances and outstanding orders).
Relayers cannot modify wallet data or execute unauthorized actions.
By solving these critical challenges, Obscura ensures complete privacy, security, and fairness for every trade, both before and after execution. This innovative architecture establishes a new standard for decentralized trading in terms of trustlessness and user confidentiality.
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