Introducing Venice Finance: Bringing Privacy to DEXs

Venice is building a future of front-running resistance, privacy preservation, and cross-chain liquidity aggregation.

Published in

Venice Finance

4 min readDec 17, 2021

Venice Finance is a next-generation decentralized exchange (DEX) that will use zero-knowledge proofs to keep transaction data private. Through privacy, traders can protect their strategies, users will have more safety, and more institutions will be able to move into the Web3 space.

Privacy can also help prevent front running, a tactic where malicious actors snipe trades or arbitrarily reorder transactions in a block to make a profit.

Venice Finance is now launching on the Findora blockchain in Q1 of 2023, and will be one of the first DEXs in the ecosystem. Starting in Q2, however, it will start integrating Findora’s privacy SDK to provide a slate of services no DEX has previously offered. As one of the first DEXs on Findora, Venice hopes to capitalize on its growth in 2023.

Some of the privacy functions we aim to offer include:

Front-running resistance
Private cross-chain swaps
Wallet address shielding
Viewing keys of auditing institutions
Zk-proof of reserves
Protecting the token type and token amount in on-chain data

Lets take a brief look at some of these features:

Front Running Resistance

One of Venice’s top goals is to give users protection against front-running, a tactic in which part of the value of trade is siphoned off to a third party. It can be done by a miner arbitrarily reordering transactions in a block to give themselves a quick profit or by black-hat programmers sniping trades with bots that comb through the mempool.

From 2020 through 2023, over $680 million was lost to front-running on Ethereum alone. In fact, as an open ledger, Ethereum is such an adversarial environment that it has been described as a dark forest, where value that doesn’t settle fast enough is swallowed up by others. The lack of privacy puts many users at risk and makes trading less efficient. Venice will lead the way in solving those issues.

Private Cross-Chain Swaps

Venice aims to be a liquidity hub for private cross-chain transaction settlement. Once someone migrates assets to Venice, they’ll be able to trade them privately for tokens on other chains using Venice.

This ability lets trading companies protect their proprietary trading strategies and allows businesses to avoid signaling their intentions to competitors. It is an important feature that will allow more businesses and institutions to enter the space.

Viewing Keys for Auditability

Many US regulators have shown their intent on targeting DeFi in the name of consumer protection. It is highly likely that in the near future, it will be necessary for DEXs and other dApps to work with regulators.

Venice is preparing for this possibility by offering privacy with transparency. As cryptographic technology advances, we aim to provide auditors or token issuers with viewing keys that would allow only them to see specific transaction data. User information on-chain would remain private; only a select, necessary group would be allowed decrypt certain transaction data.

Venice hopes to make privacy the default with auditability available when needed — much like how traditional finance operates now.

Making Privacy Coins Programmable

A platform like Venice can help increase the functionality of existing privacy solutions.

Tokens like Monero and Zcash are currently not programmable which means users cannot stake them and earn yield. But once migrated to Venice, users could leverage the DEX to earn yields on those tokens.

Venice creates a new privacy platform and extends existing tokens' utility.

Behind the Curtain of Cryptography

Venice will use Findora’s Zk-SNARKs technology to achieve these goals and more.

Using cryptographic methods like Bulletproofs and Turbo-PLONKs, Venice can keep user data on-chain private. Transactions will be proven to be valid on-chain, but specific data will be protected. Bulletproofs and Turbo-PLONKs allow these complicated proofs to be calculated in seconds allowing for scalability.

You can read more about the cryptography behind Venice by checking out the Findora website and documentation.

The Trading Capital of the World

Venice is committed to permissionless access, privacy protection, and auditable transparency. We want to create a world where anyone can access Web3 financial services without sacrificing privacy.

Deploying on Findora, we want to quickly expand access for assets from Ethereum, BNB Chain, and Polygon before expanding to other EVM-compatible chains. By establishing a broad ecosystem base and by combining privacy with auditability, Venice lays the foundation for institutions to move capital and operations into Web3.

Just as Venice was once the trading capital of the Mediterranean world, we will become the premier privacy DEX in Web3, setting DeFi on a new course to greater user protections and mass adoption.

About Venice Finance

Venice is a next-generation, Zero-Knowledge powered decentralized exchange, primarily focused on privacy preservation, front-running resistance, and cross-chain liquidity aggregation.