Concept
vAMM for Encrypted Flows • Institutional-Grade Dark Pool for Perps
The Oblivion Pool is SnarkSide’s foundational liquidity layer — a privacy-preserving virtual AMM (vAMM) designed to support fully encrypted trading flows. Unlike conventional AMMs or orderbook models, the Oblivion Pool exposes no liquidity depths, no price curves, and no order flows to the public domain. It functions as a fully shielded execution environment, suitable for institutional-grade perpetual futures trading, where privacy, order invisibility, and non-traceability are mandatory.
In this model, liquidity is not “visible” in the traditional sense. There are no quotes, no on-chain ticks, and no centralized pricing curves exposed to the public. Instead, trades are settled against a cryptographically committed price curve — bounded by zero-knowledge constraints — and liquidity providers are rewarded without ever revealing their exposure, size, or risk profile.
Why a Private Liquidity Layer?
Problems in Traditional Models:
Orderbooks reveal trader intent in real time.
AMMs leak pricing sensitivity and pool imbalances.
Liquidity is a public good ripe for adversarial exploitation (MEV, sandwiching, oracle skew).
Large players avoid on-chain execution due to visibility and traceability.
In DeFi, transparency is often weaponized. The more public the market, the more adversarial its surface becomes.
SnarkSide’s Response:
Create a virtual AMM whose pricing function is embedded within zero-knowledge proof circuits, not smart contract state.
Hide the actual size, direction, and timing of liquidity flows.
Eliminate slippage caused by predictable impact or visible trade settlement.
The Oblivion Pool enables shielded execution with enforceable constraints, preserving privacy without sacrificing capital efficiency.
Core Principles
Zero Observable Liquidity There is no publicly accessible price chart, pool depth, or bid/ask distribution. All flows are private.
Constraint-Driven Pricing Trades must satisfy pricing constraints embedded in zk-circuits, using a deterministic pricing model (vAMM curve).
vAMM Mechanics Without Exposure Instead of relying on visible reserves (
x * y = k), we commit to a private state variable representing the pool invariant, and enforce balance changes via ZK logic.Encrypted LP Commitments Liquidity providers stake collateral and receive encrypted LP tokens, which track their proportional share without exposing amounts or timing.
vAMM Execution in ZK
In a conventional vAMM, the price is derived as:
Price = f(notional_position, net_open_interest)In SnarkSide:
This function is encapsulated inside a ZK circuit.
Traders submit intents with size, direction, and expiry.
The circuit enforces that the resulting mark price change conforms to a bounded curve adjustment.
Oracle drift and divergence are tracked via internal deltas, committed but not exposed.
Constraint Example (Simplified):
assert(
mark_price_after = vAMM(entry_price, net_delta)
&&
abs(mark_price_after - oracle_price) < max_slippage
)LP Commitment & Reward Model
Liquidity providers commit margin into the pool through encrypted LP vaults, structured as:
lp_commitment = Poseidon(
amount_provided,
lockup_expiry,
nullifier_lp,
salt
)Their vaults are:
Invisible on-chain
Non-transferable without proof-of-ownership
Withdrawable only after lockup via a one-time SNARK
Rewards are generated based on:
Matched trade volumes
Funding differentials
Spread enforcement penalties
But none of these are traced back to individual LPs — only aggregate fees are publicly tallied.
Institutional Fit
The Oblivion Pool is designed to accommodate hedge funds, DAOs, and high-volume market participants that:
Require execution privacy
Avoid adverse selection from transparent pools
Seek yield from passive margin without exposure to public LP behavior
Traditional dark pools in TradFi dominate volume precisely because they prevent signaling. Oblivion aims to replicate this — but on-chain, and without counterparty trust.
Trade Lifecycle in the Oblivion Pool
Trader submits encrypted intent (size, direction, expiry)
Circuit matches intent against vAMM constraints
Price impact is computed off-chain, validated via SNARK
Funding flows and fees are distributed to encrypted LP vaults
No public logs of trade, settlement, or liquidity touchpoints are emitted
Summary
The Oblivion Pool transforms the nature of liquidity in DeFi:
From visible to encrypted
From manipulable to cryptographically enforced
From adversarial to neutral
It is a dark pool for perpetual futures, backed by deterministic cryptography, not by transparency theater.
No trace. No noise. Only truth — enforced in zero-knowledge.
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