The openness and auditability of blockchains has long been hailed as a feature, a way for anyone to verify activity and ensure transactional legitimacy. While transactions have historically been pseudonymous, the proliferation of sophisticated data firms that categorize, label, and track addresses has stripped away this protection, transforming blockchains’ openness into a challenge for institutions. Consequently, we’ve witnessed a surge in copy trading, reputational hits for selling and return-eroding information leakage, with no institutional-class confidentiality available.
For institutions already entrenched in the ecosystem, regaining pseudonymity is non-negotiable, whereas achieving complete confidentiality is imperative to appeal to traditional financial institutions.
Compliant Confidentiality
Singularity is the first compliant, multifaceted way to transact onchain with anonymity in “lit” pools, and full confidentiality in dark pools.
The ‘Singularity Contract’ is a shielded pool where anonymity scales with TVL and duration, wrapped in KeyRing’s compliance solution, ensuring only verified entities with the required credentials can commit funds. Control over assets in the Singularity contract are governed by a UTXO model using notes, which are created when assets are deposited. Note owners have the ability to move their assets and can achieve anonymity when transacting with external “lit” pools as all transactions originate from and return to the same Singularity Contract. Singularity has integrated with multiple major DeFi pools such that users will have the benefit of taking advantage of the vast permissionless on-chain liquidity now overlayed with commercial confidentiality.
Still, Shielded pools are imperfect when depositing addresses are known: transacting parties can be probabilistically inferred based on their deposits relative to the assets previously in the pool, or how quickly assets enter and exit in like-sizes. As time progresses and TVL scales, the confidence in these deductions diminishes; Still, for many long-tail assets, liquidity constraints may prevent a sufficient anonymity set, and for many institutions, relying on pseudonymity alone may be insufficient.
Shielded Pool -> Dark Pool
Dark Pools in traditional finance have existed since the 80s, initially introduced as a means to enhance liquidity and lower risk with full confidentiality, with reports suggesting that as much as 40-50% of average daily volumes in US markets pass through them. But in open system like blockchains, getting from pseudonymity to full confidentiality requires a special design and venue, where trades aren’t settled on the main chain. Today, institutions resort to OTC desks to obfuscate their orders, but liquidity is fragmented and information leakage continues to persist, underscoring the need for improved, cryptographically protected venues.
The Singularity Contract features a Dark pool where trades involve a reassignment of notes rather than the direct exchanging of assets; put another way, all assets remain in the contract, and simply the rights to spend them are traded. In a matched limit order to buy 10 ETH at 3000 USDC/ETH, Alice signs the details of the swap and reassociates the note of 30,000 USDC to her counterparty Bob, while Bob does the same for his note of 10 ETH to Alice. All this happens within the Singularity contract where complete confidentiality is achieved as no details of the transaction (asset, amount, participants) are exposed. The swapping can be asynchronous and instantaneous once both parties have signed, without needing a third party intermediary for custody.
Team
Singularity has a strong institutional and technical team led by CEO Jemma Xu, CTO Loong Wang, and VP of Engineering Jay Xu (no relation to Jemma Xu).
Jemma brings a wealth of experience from her tenure in institutional-focused asset management platforms and years of investing in digital assets at a fund level. With a strong network and firsthand understanding of institutional requirements, she has architected Singularity to address the current challenges faced by institutions and effectively communicate the advantages of transacting in Singularity.
Loong was a founding member and CTO of REN Protocol, a cross-chain liquidity bridge that has facilitated over $13B in volume. REN initially started as a dark pool in 2017, but pivoted due to the technical and regulatory hurdles of the time that prevented them from getting a product to market that fit the needs of a then much more limited institutional investor base. Today, as institutional investors increasingly engage onchain, the demand for compliant solutions has surged, underscoring the relevance of Loong’s expertise in Singularity’s development.
Jay brings with him a wealth of Web2 senior engineering experience, having led large decentralized technical teams and architected systems and applications at Ebay, Baidu and Meituan that are still used by millions of users today.
Conclusion
Singularity solves one of the largest problems faced by institutions currently transacting in the space while maintaining compliance. As the anonymity set scales over time, the benefits of using singularity to transact in lit pools grows, as does the availability of dark pool liquidity. We believe Singularity will fundamentally change the way institutions transact onchain today and bring in a new wave of participants currently sidelined.
If you are an institution looking for confidentiality onchain, the team is currently onboarding early users – you can learn more about Singularity’s solution here.
Disclaimer
Information is provided for general educational purposes only. This presentation is not an offer to sell securities or a solicitation of offers to buy securities. Nothing contained herein constitutes investment or other advice nor is it to be relied on in making an investment decision. For more important information, please see disclaimer
