Sienna Swap: Privacy-Preserving AMM with Front-Running Resistance
Built a privacy-preserving automated market maker DEX on Secret Network that eliminates MEV extraction and front-running through encrypted transaction processing.
The Challenge
Decentralized exchanges had revolutionized crypto trading, but they came with a hidden tax: front-running. On transparent blockchains, every pending trade was visible in the mempool, creating a systematic extraction of value from regular users.
Sienna Network faced this problem head-on:
The MEV Problem: Miners and sophisticated bots could see pending swap transactions, execute their own trades first, and profit at users' expense. Studies estimated that MEV extraction cost Ethereum users hundreds of millions of dollars annually. Every large swap on a public AMM was essentially advertising "front-run me."
Privacy as Table Stakes: For Sienna's privacy-focused user base, transaction visibility wasn't just about MEV - it was about fundamental financial privacy. Users didn't want their trading activity, portfolio rebalancing, or investment strategies visible to the world.
Technical Complexity: Building an AMM that maintains accurate pricing, provides liquidity providers with fair returns, and enables efficient arbitrage - all while keeping individual transactions private - required solving problems no one had tackled before.
User Experience Trade-offs: Privacy solutions often came with UX penalties: slower transactions, complex key management, limited wallet support. Sienna needed a DEX that felt as smooth as Uniswap while delivering privacy by default.
Our Approach
We designed Sienna Swap to deliver the best of both worlds: the proven mechanics of constant-product AMMs with the privacy guarantees of Secret Network's encrypted computation.
Why AMM Over Order Book?
For a privacy-preserving DEX, we evaluated multiple architectures:
| Model | Privacy Potential | Liquidity Efficiency | Implementation Complexity |
|---|---|---|---|
| Central Limit Order Book | High (encrypted orders) | High | Very High |
| Constant Product AMM | High (encrypted swaps) | Good | Moderate |
| Batch Auctions | Medium | Medium | High |
AMMs offered the best balance: proven economics, simpler privacy implementation, and established user familiarity. The constant-product formula (x * y = k) provides deterministic pricing without revealing individual trade details.
Front-Running Resistance by Design
Secret Network's architecture provides inherent MEV protection:
- Encrypted Mempool: Transactions are encrypted before broadcast - no one can see swap details until execution.
- TEE Execution: Swaps execute inside Trusted Execution Environments where state is encrypted.
- Atomic Settlement: No window exists between price observation and trade execution for front-runners to exploit.
Permissionless Design
Despite the privacy features, we maintained DeFi's core principle: anyone can participate without gatekeepers. Users need only a compatible wallet to swap, provide liquidity, or create new trading pairs.
The Solution
Sienna Swap implements a full-featured AMM with privacy as a foundational property rather than an add-on.
Core AMM Mechanics
Liquidity Pools
- Standard two-token pools with constant product pricing
- LP tokens represent proportional pool ownership
- Fees accrue to liquidity providers automatically
Swap Execution
- Users specify input token and minimum output amount
- Swap executes atomically with price determined by pool state
- Slippage protection ensures users receive expected value
Price Discovery
- Pool ratios reflect market prices through arbitrage
- External price feeds available for reference
- All while individual swap amounts remain private
Privacy Implementation
What's Private
- Individual swap amounts and directions
- User addresses participating in swaps
- Portfolio composition and trading patterns
- LP position sizes
What's Public
- Total pool liquidity (enables price discovery)
- Aggregate trading volume (demonstrates market activity)
- Fee parameters (ensures transparency)
Technical Mechanisms
- Viewing Keys: Users generate personal keys to access their own transaction history and LP positions
- Encrypted State: All position and balance data stored encrypted on-chain
- Private Tokens: Integration with SNIP-20 token standard for privacy-preserving assets
Integration & Ecosystem
Wallet Support
- Keplr browser extension with native Secret Network support
- Hardware wallet integration via Ledger
- Mobile-friendly design for broad accessibility
Cross-Chain Assets
- IBC-enabled assets from across Cosmos
- Secret Bridges for assets from Ethereum and other chains
- Native SCRT and wrapped token support
Additional Infrastructure
Post-launch, we extended the platform with:
- JavaScript/TypeScript SDK for developer integration
- Token vesting contracts for project launches
- Rewards distribution for liquidity mining programs
Development Process
| Phase | Duration | Focus |
|---|---|---|
| Architecture Design | 3 weeks | AMM mechanics, privacy model, contract structure |
| Core Development | 8 weeks | Swap logic, liquidity provision, fee distribution |
| Frontend & Integration | 4 weeks | User interface, wallet connection, transaction handling |
| Testing & Security | 3 weeks | Comprehensive testing, audit preparation |
| Launch & Iteration | Ongoing | Mainnet deployment, SDK development, additional features |
Team: 5 full-stack blockchain developers with Cosmos specialization
Initial Development: 4 months to mainnet launch
Results
Platform Capabilities
| Feature | Details |
|---|---|
| Swap Privacy | Full - amounts and addresses encrypted |
| Front-Running Protection | Native - encrypted mempool prevents MEV |
| Liquidity Provision | Permissionless pool creation and LP |
| Supported Assets | SCRT, sTokens, IBC assets, bridged tokens |
| Wallet Support | Keplr, Ledger |
User Experience
- Near-Instant Execution: Secret Network's fast finality enables responsive trading
- Clean Interface: Intuitive UI familiar to users of other AMMs
- Transparent Fees: Clear fee structure with no hidden MEV extraction
Technical Achievements
- First Privacy-Preserving AMM: Pioneered the combination of AMM mechanics with encrypted state
- Zero MEV Extraction: Users protected from front-running by design
- Production Stability: Successful mainnet operation with consistent uptime
Developer Ecosystem
The JavaScript/TypeScript libraries we built enable other projects to integrate Sienna Swap functionality, extending the protocol's reach beyond direct users.
Technologies Used
Secret Network CosmWasm Rust Cosmos SDK IBC Protocol SNIP-20 Fadroma React TypeScript JavaScript Keplr Azure
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