Coming Next: World's First DEX to Offer Privacy Protection

Inheriting default programmable privacy from Findora’s privacy-preserving UTXO ledger, FairySwap is able to protect its users from malicious privacy exploits prevalent on Ethereum and other fully-transparent ledgers, including transaction linkability, identity traceability, front-running and so on.

This is achieved through a process called Privacy Loop, which breaks the on-chain link between sources of transactions and their destination. Leveraging cryptographic algorithms including atomic swaps and anonymous transfers to create ZK synthetic assets, FairySwap creates aa “decontamination” process to help users establish anonymous on-chain identities. Users can use these secret on-chain identities to migrate and trade their assets from “contaminated” accounts on any of the many ecosystems supported by Fairyswap for privacy protection. FairySwap thus automates the transfer of user assets from a traceable account, linked to an identity that was KYC’d on a CEX, to an untraceable address on FairySwap’s DEX.

Figure 1: there are two types of address space in Findora Layer 1, i.e. the

Findora EVM address space (address space I) and the Findora UTXO address

space (address space II). An asset withdrawn from a Centralized Exchange (CEX) to a Findora EVM address is linked to the users’ KYC’ed identity.

User Flow

Four addresses and 2 sets of mnemonic keys are created in a Privacy Loop: UTXO addresses A, & B, and Findora EVM address 0x… (UTXO address B and EVM address 2 share the same mnemonic; UTXO address A and EVM address 1 share the same mnemonic;)

1. Internal transfer from EVM Address 1 to UTXO address A

2. Convert transparent UTXO token to ZK synthetic asset

3. Anonymous transfer of the ZK synthetic asset from UTXO address A to UTXO address B

4. Convert ZK synthetic asset to transparent UTXO token

5. Internal transfer from UTXO address B to Findora EVM address 2

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