Swap

Users can swap between any pair of assets without revealing their trading history to the world using ZSwap, Penumbra’s shielded automated market maker design based on frequent batch auctions.

Swaps are sealed on submission, combined in encrypted form, and executed as a single batch with a common clearing price. This prevents front-running and provides better trade execution. Only the batch totals are revealed, providing long-term privacy for individual traders’ activity.

Transparent chains allow miners to extract value (MEV) by inspecting the contents of transactions and reordering or front-running them. But as a fully shielded chain, Penumbra has no MEV, because transactions do not leak data about user activity.