Privacy-Preserving Decentralized Exchange Marketplaces

TL;DR

This paper introduces Rialto, a decentralized exchange marketplace that ensures trader privacy and security while maintaining transparency, fairness, and scalability for various financial instruments.

Contribution

The paper presents Rialto, a novel decentralized exchange platform that preserves trader privacy and security without sacrificing market fairness or scalability.

Findings

Rialto achieves confidentiality of order rates and balances.

The marketplace maintains unlinkability between traders and orders.

The solution scales effectively for large markets.

Abstract

Decentralized exchange markets leveraging blockchain have been proposed recently to provide open and equal access to traders, improve transparency and reduce systemic risk of centralized exchanges. However, they compromise on the privacy of traders with respect to their asset ownership, account balance, order details and their identity. In this paper, we present Rialto, a fully decentralized privacy-preserving exchange marketplace with support for matching trade orders, on-chain settlement and market price discovery. Rialto provides confidentiality of order rates and account balances and unlinkability between traders and their trade orders, while retaining the desirable properties of a traditional marketplace like front-running resilience and market fairness. We define formal security notions and present a security analysis of the marketplace. We perform a detailed evaluation of our solution, demonstrate that it scales well and is suitable for a large class of goods and financial instruments traded in modern exchange markets.