Penumbra: Zero-Knowledge Decentralized Exchange

Penumbra is a fully private Proof-of-Stake (PoS) network and decentralized exchange (DEX) for the Cosmos ecosystem. Penumbra integrates privacy with PoS through a novel private delegation mechanism that provides staking derivatives, tax-efficient staking, and on-chain governance with private voting. Penumbra connects to the Cosmos ecosystem via IBC, acting as an ecosystem-wide shielded pool and allowing private transactions in any IBC-compatible asset. Users can also swap these assets using ZSwap, a private DEX supporting sealed-bid batch auctions and Uniswap-v3-style concentrated liquidity. Sealed-bid batch auctions prevent frontrunning, provide better execution, and reveal only the net flow across a pair of assets in each block, and liquidity positions are created anonymously, allowing traders to approximate their desired trading function without revealing their individual beliefs about prices.