Introducing Xythum

Today marks a significant milestone in the evolution of decentralized finance. We are excited to publicly announce Xythum, a protocol-agnostic dark pool designed for the sovereign trader.

What is a Dark Pool?

A dark pool is a private venue for trading securities where order details are hidden until execution, preventing front-running and information leakage.

The Problem with Current DEXs

Every trade you make on a typical decentralized exchange is visible to the entire world before it executes. The moment you submit a swap transaction, it enters the public mempool where sophisticated actors can observe and exploit it.

This transparency creates several serious problems:

Front-running: MEV bots can see your pending transaction and execute an identical trade ahead of you
Sandwich attacks: Attackers can manipulate prices around your trade, profiting at your expense
Information leakage: Your trading strategy, positions, and intentions become public knowledge
Worse execution: Large orders suffer from price impact as the market anticipates your trade

MEV Impact

In 2023 alone, over $900M was extracted from users through MEV on Ethereum mainnet.

How Xythum Works

Xythum uses a combination of cutting-edge cryptographic techniques to create a truly private trading experience while maintaining full on-chain settlement and verifiability.

Core Architecture

At its heart, Xythum leverages three key technologies:

order-structure.ts

interface XythumOrder {
  commitment: Commitment;    // Hidden order details
  nullifier: Nullifier;      // Prevents double-spending
  proof: ZKProof;           // Validity proof
  encryptedPayload: Buffer; // Threshold-encrypted order
}

Zero-Knowledge Proofs: We use ZK-SNARKs to prove order validity without revealing order details
Threshold Encryption: Orders are encrypted so that no single party can decrypt them
Delayed Execution: A brief time-lock prevents observers from front-running matched orders

Zero-Knowledge Proofs

ZK-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge) allow us to prove statements about private data without revealing the data itself. This is the cryptographic foundation that enables private trading.

The Matching Engine

Unlike traditional dark pools that rely on trusted operators, Xythum's matching engine operates in a decentralized manner:

matcher.sol

contract XythumMatcher {
    function submitOrder(
        bytes32 commitment,
        bytes calldata proof
    ) external returns (bytes32 orderId) {
        require(verifyProof(commitment, proof), "Invalid proof");
        // Order details remain hidden
        emit OrderSubmitted(orderId, msg.sender);
    }
}

Privacy Guarantees

Xythum provides the following privacy guarantees:

Property	Description
Order Privacy	Order price, size, and direction are hidden until execution
Trader Anonymity	No link between depositor and trader addresses
Execution Privacy	Matched orders settle without revealing trade details
Compliance Ready	Selective disclosure for regulatory requirements

Important

While Xythum provides strong privacy guarantees, users should understand that all trades eventually settle on-chain. The privacy protection is against pre-execution exploitation, not permanent hiding of transactions.

What's Next

We're launching testnet access in Q1 2025. During this phase, you'll be able to:

Deposit test tokens into Xythum shielded pools
Submit private limit orders
Experience MEV-protected execution
Provide feedback to shape the protocol

Join the Community

We're building Xythum in the open. Join our community to get early access:

Follow us on Twitter/X
Join our Discord
Read our technical documentation

Xythum — Protocol-agnostic dark liquidity for the sovereign trader.