We believe privacy should be Common, trust should be Common, and security should be Common. That’s why we’ve built a unique DeFi solution that improves on both CEXes and DEXes to strike the right balance between transparency and financial freedom, privacy, and efficiency for DeFi markets.
…so what is Common, exactly?
The whitepaper defines it as a novel decentralized exchange (DEX) design that solves two problems:
- Price inefficiency.
- Lack of user privacy.
To deliver on this, Common combines a private order book with advanced cryptographic techniques and a Swap Engine that is able to attract cross-chain liquidity.
- Solving price inefficiencies
Once you’re on the platform, you get the best of DeFi and the best of CeFi. Common offers optimal price efficiency and counts with deep liquidity thanks to its implementation model and cross-chain capabilities.
- Order book model: This model brings some of the efficiency seen in CEXes into a DEX — albeit in a private setting. It enables trading at better prices as well as UX improvements where all trades can be placed as private limit orders on an order book that are then processed internally in batches.
- DEX aggregation: Robust multi-chain infrastructure allows for bridging all the liquidity that’s been fragmented across web3. This kind of aggregation lets users trade assets from different ecosystems, all in one place where users can choose to hold assets in private liquidity pools (shielded pools).
- Dutch auction: Common introduces efficient price discovery that will bring deep liquidity to the exchange and offer superior price efficiency as a result. A Dutch auction mechanism acts as an incentive to bring liquidity from any external source — be it CEX or DEX — and trade against Common. In this implementation of a Dutch auction, assets that weren’t matched internally are listed at order prices and keep the auction live for a certain period of blocks. If the assets are not bought at the order’s price, their price will be lowered, and the process will continue until the assets are bought.
- Solving privacy
On Common, privacy doesn’t just mean keeping your identity private. It also means keeping your transactions private. Sharing your financial activities across web3 will always be your prerogative only. Information about user funds is protected using ZK technology and homomorphic encryption techniques, so that you can use:
- Private batched orders: ZK and sMPC technology enable Common to ensure that orders only get revealed to the rest of the network upon execution. Even then, they are processed in batches after being settled internally. This mitigates the MEV problem and limits the risk of front-running by other parties.
- Shielded pools: Users can opt for holding their tokens in shielded pools, where they are known only to their holders. As such, shielded pool users cannot be profiled based on the assets they hold, nor the trades they take.
- Compliant privacy: Design choices have been made to ensure Common complies with GDPR, KYC/KYB, and AML laws. Integrations with on-chain monitoring Coinfirm and the decentralized identity solution of idOS enable DeFi to be privacy-enhanced yet respectful of obligations.
- Opt-in privacy: To get into the private setting, users will have to go the compliance verification route–but the platform itself in a permissionless manner can be used freely, just as with any other DeFi product.
…Solving for other common things, too
As a private DeFi suite, Common doesn’t stop at price and privacy. Other key advantages of using Common include:
- Self custody: To ensure that users have all the advantages of a DEX, Common never takes custody of assets–users do.
- Community focus: The DEX implementation is open-source and lets the community vote for new trading pools and pairs. In the future, it will have its own token to incentivize liquidity providers in these pools and let them participate in governance processes.
- Institutional support: Common will also offer enhanced trading experience for institutions that seek on-chain privacy for their operations.
Building on Aleph Zero
An efficient and decentralized order book exchange with on-chain privacy features based on zero-knowledge technology can’t be built on any infrastructure. Common is going live thanks to the ease of development and scalability that comes from building on Aleph Zero.
The advantages are obvious.
Building in public
Common is a community-oriented project that will start and launch with a focus on builder participation. We want to include you to make sure we’re building this well.
Soon, you’ll be able to join the Common public testnet to check the first implementation of AMM and Liquidity Pools.
Let’s create a private DeFi together. Let’s make financial privacy Common.