Privacy Perps
All position and account data on Paradex is private to the account holder
Orders, Positions and Trades are private on:
Orders are only stored on the Paradex Cloud and are only known to the operators of Paradex Cloud. Users can only access their own orders through authenticated access.
Privacy on Paradex Chain is guaranteed through a custom RPC configuration. RPC nodes mask position and account fields by default, and only return private data to the owner after authenticating the request via a valid signature. Bridge partners are only granted selective access to the transaction data (account state remains private) required by their smart contracts to process deposits and withdrawals.
Encrypted state diffs with ZK verification are regularly posted to Ethereum as part of the zkrollup architecture. The Paradex Privacy Council holds the decryption keys needed to decrypt in the event of an emergency.
In the zkrollup architecture, state update transactions contain an aggregated (“squashed”) state diff that is used to reconstruct state from L1 DA. In the sequencer, an aggregator determines which blocks are included in a given state update, combines the squashed state difference across those blocks, serializes it into the blob payload, and forwards the commitment so that the proof system (SHARP) and Ethereum can enforce that the published diff matches the proven state transition. Encryption prevents the ability of monitoring these state update transactions and reconstructing the aggregated balances/positions of users over time.
In Paradex’s Privacy Architecture, the blob data is encrypted before posting to Ethereum and the ZK proof validates the correctness of the state transition and the correctness of the encryption/commitment to the encrypted diff. This encryption path is unique to the Paradex Chain and not part of Public Starknet defaults.
Paradex utilizes hybrid encryption. Encryption is performed using the following steps
For each state update, a random symmetric key encryption k (a felt252)
At the beginning of the blob, k is encrypted with all the public keys using the Stark curve (with generator G) of the Privacy Council
i with public key Pubᵢ, a random variable rᵢ is randomly selectedk for each council member i using the function (Rᵢ= G*rᵢ , Yᵢ = blake(Pubᵢ*rᵢ) + k)Finally, the entire blob is encrypted using blake(i, k) + pᵢ, where pᵢ is the i-th element of the blob
Decryption can only be performed by council members using their decryption keys.
k is reconstructed through k = Yᵢ - Rᵢ * PrivᵢParadex submits state to Ethereum to preserve the possibility of an escape hatch in the event Paradex becomes inoperable. In that situation, the council can decrypt and publish the necessary state to enable recovery.
The current members of the Privacy Council are:
As Paradex scales, the council will be expanded for even stronger decentralization.