The protection of privacy, a notion that comes to the fore very often in the crypto space and which continues to generate a lot of ink. This is also a feature that ensures many projects in this space have massive public support. This is notably the case with Uniswap, which uses it to consolidate its dominance within DeFi. With Incongnito, a privacy-focused blockchain, the decentralized exchange had notably launched pUniswap a way to trade privately. On the back burner since September, the functionality is accessible again to the delight of its users.
A new version with lower costs
The idea of including a privacy protection feature in the DeFi space took hold of its own the scale taken by the sector. Indeed, the overwhelming majority of DeFi projects are based on the Ethereum ecosystem which implies a large number of interactions. As a result, transactions on this space can be easily traced to specific wallet addressess. If the advent of pUniswap remedied this problem, the current version of Incognito would bring more guarantees and benefits to its users. These include reduction of transaction costs as explained on the Incognito blog.
“With this second release, channel fees have been incorporated into the selection of pools, to ensure that you get what you pay for when trading. Low Incognito fees mean that for small transactions, pDEX will be your best value. But until the liquidity of pDEX rivals that of Uniswap, your best bet could be Uniswap for large trades, “explains the blog post. To better support users, Incognito includes a function telling them whether they should use pDEX – Incognito’s native decentralized exchange – or pUniswap.
A use case that bothers regulatory authorities
In effect, pUniswap uses an Incognito shielding smart contract to interact with Uniswap, in other words Incognito acts as a sort of proxy without trust. This function therefore allows any user to carry out transactions without having to interact with the Ethereum network. The consequence of this process is that almost all Incognito users use the same wallet to complete their transactions. A situation that is not necessarily well received by regulators who complained about the lack of strict regulations in the DeFi space. The privatization of the data generated by the use of Incognito should certainly become the new scourge to be watched by them.
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Already the subject of strong criticism for its lack of transparency, DeFi is more than ever in the sights of regulators with this new function of Uniswap.