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The first use case for DeFi Adaptors, zSwap, is designed to facilitate swap transaction flow towards some of the most widely used protocols in the Polygon DeFi ecosystem — Quickswap, Uniswap v3, and Curve. This functionality is found within the “Swap” tab in Panther’s decentralized application (dApp).
zSwap features a user interface similar to the DEXs mentioned above for a familiar user experience. It also allows users to dictate the token IDs for the assets they want to sell/buy from a list of accepted assets (see below), enabling them to choose the specific swap pair they wish to trade. Users can also input the amount of the sell token they wish to trade, and the zSwap function will query an exchange rate based on these inputs and provide users with up-to-date values. This ensures that users can make informed decisions about their trades and optimize their transactions for the best possible outcome.
zSwap’s goal is to cater to a wide range of user types, including institutions, and market makers. At mainnet release, zSwap will support the interaction with three different platforms, with the ability to highlight the best platform or “route” for users to conduct their swaps, allowing them to swap tokens at the most favorable rates and incur smaller fees.
The ability for users to swap assets privately serves a double purpose:
Allowing users to trade between all allowlisted assets available using the platforms above.
Contributing to the privacy that Pools provide to users holding assets within them.
In other words, no one can link assets within the pool to specific users since they can swap assets and trade with one another within it, even if deposits/withdraws to the Pool itself are viewable by observers.
The following scenario illustrates how zSwap works in a practical setting:
Alice wants to swap her ETH for USDC. As a privacy-conscious user, she already holds her ETH as zETH within Panther Protocol (ETH deposited into a Shielded Pool). This grants her access to the privacy-preserving functionalities of zSwap.
Alice connects her wallet to Panther and navigates to the Swap page on her Zone Manager’s dApp interface.
Alice navigates to the left side of the UI and chooses the selling token and an amount based on her historical deposits (e.g. zETH). She then chooses the receivable token (e.g. zUSDC).
zSwap automatically calculates the exchange rate between the sellable and receivable asset (e.g. 1750 zUSDC per 1 zETH) according to real-time market data from DEXs.
zSwap will automatically display the best swapping route identified and the details of the swap. Alice can choose to expand the list of DEX routing options to compare the costs of using a different DEX and select it if she decides to do so.
After Alice finds a preferred option among all the DEX options available, she executes the transaction by pressing the Swap button.
The DeFi Adaptor generates a unique hashed time-locked contract (HTLC) for this atomic swap.
During the swap process, Alice reveals her secret keys within the predefined time limit, allowing the DeFi Adaptor to execute the atomic swap. This process preserves her privacy, as Panther’s user identity and transaction details remain shielded within the Pool.
Once her transaction goes through, the newly deposited asset (in our example, USDC) is delivered to Alice as a zUSDC. Alice also gets rewarded for conducting a transaction on zSwap through Privacy Reward Points (PRPs), which reward users for increasing the anonymity set of the Panther ecosystem. Should an issue cause the transaction to fail at any step of the way, Alice’s asset balance would remain unchanged.
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One key component that will help realize Panther’s vision of decentralized, privacy-preserving DeFi access is to develop plugins specific to existing protocols and connect them to Panther Pools (Panther’s private ). This overall solution is referred to as DeFi Adaptors.
Each plugin enables zAssets to interact with DeFi protocols by passing relevant values and function types, resulting in a seamless transaction flow while maximizing the benefits of both protocols for the user. Thanks to this system, users gain access to Panther’s privacy-preserving features while integrating with DeFi services (such as atomic swaps, liquidity provisioning, and staking) without letting go of the underlying security of the blockchain networks Panther is deployed on.
Panther’s catalog of DeFi Adaptors will be ever-expanding to interact with a broad range of DeFi dApps and protocols. Each of these different interaction types will have a dedicated Adaptor, and, as you will see below, the DeFi Adaptor dedicated to swapping assets through DEXs is called .
Thanks to this system, users gain access to Panther’s privacy without letting go of the underlying security of the blockchain networks Panther is deployed on.
DeFi Adaptors will debut on Polygon at the release of .
Since transactions happen to and from Pools, with diverse users entering and withdrawing from them, transacting within them, and interacting with outside protocols (including swapping assets), an external observer finds it extremely challenging to surveil any user. This is demonstrated in the diagram below.
Some use cases of DeFi Adaptors include:
Swaps: DeFi Adaptors facilitate users accessing swaps and interacting with the decentralized finance ecosystem from Panther’s Shielded Pools. This enables users to securely and privately exchange assets while safeguarding their data privacy.
Liquidity provisioning: DeFi Adaptors allow users to contribute their zAssets to liquidity pools in decentralized exchanges (DEXs) or automated market makers (AMMs). This enables users to earn passive income through fees generated from trades without creating a link to their wallets and identity.
Staking: DeFi Adaptors can enable users to stake their zAssets in various decentralized platforms, such as proof-of-stake networks or yield farming protocols. This allows users to earn rewards or interest on their assets.
Cross-chain compatibility: DeFi Adaptors can be designed to work across multiple blockchain platforms and systems, promoting cross-chain collaboration and enabling users to interact with a wide range of DeFi applications while preserving their privacy.
Seamless Integrations: DeFi Adaptors can be integrated into user-friendly wallets and platforms, ensuring that even users with limited technical knowledge can access the benefits of Shielded Pools while participating in the DeFi ecosystem.
Another critical feature of DeFi adaptors is their ability to integrate with Panther’s . Panther’s Shielded Pools allow users to deposit (multiple types of) tokens and trade within the pool without being traced. Using and cryptography, DeFi Adaptors ensure that users’ assets cannot be traced back to any particular user.
Adaptors enable users to break the on-chain link between their assets and DeFi activity. By facilitating private asset transactions and enhancing the Zero-Knowledge transaction flow towards widely used DeFi protocols, adaptors like help to ensure that users’ sensitive financial information is kept secure.
In development on testnet
In development on testnet |
zSwap uses advanced algorithms to identify the optimal routing path for trade execution while allowing the user to choose other sub-optimal options if that is their preference. It provides an optimized user experience by automatically defaulting to the platform with the least price impact based on the trade variables that the user wishes to execute.
Additionally, zSwap calculates the difference between the best available opportunity and the rest in terms of the price impact of each DEX (e.g. a trade could feature a 2% impact in Curve as opposed to a 0.3% impact in Uniswap). In the future, zSwap might be expanded to support more DEX integrations to allow further diversity of asset flow and access to deeper liquidity.
