A privacy-focused decentralized exchange using eERC20 encrypted tokens on Avalanche C-Chain. The DEX will enables private trading where balances, trade amounts, and user positions remain confidential while maintaining full decentralization.
Problem Statement Current DEXs expose all trading data publicly, enabling:
- MEV attacks (front-running, sandwich attacks)
- Trading strategy exploitation
- Portfolio privacy violations
- Competitive disadvantage for large traders
Solution Private DEX using eERC20 encrypted tokens that:
- Hides user balances and trade amounts
- Prevents MEV exploitation
- Maintains trading privacy
- Leverages Avalanche's speed and low fees
Technology Stack Blockchain:
- Network: Avalanche C-Chain Testnet
- Token Standard: eERC20 (Encrypted ERC20)
- Development Framework: Hardhat
Smart Contracts:
- Language: Solidity
- Libraries: OpenZeppelin, eERC20 standard library
- Testing: Hardhat test suite
Frontend:
- Framework: React 18 + Next.js 14
- Web3 Library: ethers.js v6
- UI Framework: Tailwind CSS
- State Management: React Context
Core Architecture eERC20 Integration Points:
- Encrypted Balances: User balances stored encrypted on-chain
- Private Transfers: Swap amounts hidden from public view
- Confidential Liquidity: LP positions remain private
- Encrypted Events: Transaction logs maintain privacy
AMM Logic:
- Constant Product Formula:
x * y = k - Encrypted reserve updates
- Private slippage calculations
- Hidden trading fees
Security Considerations:
- Reentrancy protection
- Integer overflow protection
- Access control for admin functions
- Input validation for all user interactions
Competitive Advantages
- First-mover: Early privacy DEX on Avalanche
- Technical depth: eERC20 integration complexity
- Real problem: Solves actual MEV/privacy issues
- Avalanche-native: Built specifically for the ecosystem
- Scalable roadmap: Clear path to full product