Privacy Preservation

Shielded Intents

In most DeFi protocols today, every action is publicly visible on-chain, revealing who did what and at what time. While this transparency provides verifiability, it also leaks sensitive data—from user balances to strategy details. This can be detrimental to businesses or advanced traders who rely on proprietary alpha.

The Anoma architecture confronts this challenge head-on by distinguishing between “the who” and “the what,” i.e., the identity of the user (or solver) and the data/logic of their intents. By controlling which parts of an intent are visible, we can preserve privacy for advanced use cases such as cross-chain derivatives, principal-protected strategies, or high-frequency trading.

Intent Privacy Levels

1. Transparent Intents

   • Suitable for standard DeFi transactions where both user identity and transaction details can be public.

2. Shielded Intents

   • Offers pseudonymity by concealing user identity while exposing transaction data to authorized solvers and zero-knowledge provers for validation.

3. Private Intents

   • Designed for maximum secrecy to protect proprietary methods.

   • Solvers see only encrypted data, ensuring correctness via ZK proofs or cryptographic methods.

   • Hides both user identity and transaction details using technologies like TEEs, MPC, or Threshold FHE.

Protecting Proprietary Strategies

1. Executing Trades with Minimal Exposure

   • Solvers can execute or match trades by verifying only essential constraints, maintaining strategy privacy and user anonymity.

   • Using zero-knowledge proofs or partial disclosure, solvers validate logic without revealing details, either off-chain or with minimal on-chain data.

   • Strategy providers can define private actions such as:

     • "Activate a delta-hedge if the volatility index reaches a certain level."

     • "Implement an option spread if the underlying asset moves by a specific amount."

2. Importance of Privacy in Trading

   • Enterprise Adoption: Institutions demand confidential trading practices to protect positions and risk parameters from competitors.

   • Competitive Edge: Hedge funds and quants depend on unique insights, which lose value if exposed on-chain.

   • Protection Against Front-Running and MEV: Publicizing advanced strategies can invite malicious actors to copy or front-run trades, undermining the original intent.