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pattern-pretrade-privacy-encryption.md

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title Pattern: Pre-trade privacy (Shutter/SUAVE/private RFQ)
status ready
maturity pilot
layer hybrid
privacy_goal Prevent front-running and information leakage via encrypted order submission
assumptions Encrypted mempool (Shutter) or private builders (SUAVE), allow-listed counterparties
last_reviewed 2026-01-14
works-best-when
RFQ/secondary trading must not leak intent, size, or price pre-inclusion.
avoid-when
You accept public mempool visibility of orders.
dependencies
Encrypted mempool (Shutter) or private builders (SUAVE)
RFQ service
context both
crops_profile
cr os privacy security
low
partial
partial
low

Intent

Prevent front-running and information leakage by routing quotes/orders via encrypted/private submission; then settle with confidential tokens.

Ingredients

  • Infra: Shutter/SUAVE, allow-listed counterparties
  • Off-chain: RFQ broker, audit of quote requests

Protocol (concise)

  1. Buyer emits RFQ off-chain; quotes returned privately.
  2. Winning order submitted via encrypted route for inclusion.
  3. Settlement occurs on privacy L2/L1 pool; amounts remain hidden.

Guarantees

  • No public mempool leakage of intent/size/price.
  • Auditable RFQ lifecycle.

Trade-offs

  • Additional infra dependency; fallback path required.
  • Latency/availability tied to privacy routing.
  • CROPS context (both): CR could reach high if threshold committee selection becomes permissionless via stake-weighted rotation. OS improves to yes by open-sourcing all encryption and decryption logic under copyleft. Privacy could reach full by encrypting quotes end-to-end until settlement confirmation, not just during the pre-trade phase. Security could reach high by hardening collusion resistance through key compartmentalization across independent operators. In I2I, encrypted order flow prevents counterparties and intermediaries from front-running institutional block trades. In I2U, threshold encryption protects retail orders from MEV extraction by builders or relayers.
  • Post-quantum exposure: threshold encryption schemes (Shutter/commit-reveal) may rely on pairings broken by CRQC. Mitigation: lattice-based threshold encryption. See Post-Quantum Threats.

Example

  • Three quotes received; best quote settles; unfilled quotes remain undisclosed.

See also

  • pattern-confidential-erc20-fhe-l2-erc7573.md · pattern-secondary-market-rfq-batched-settlement.md

See also (external)