RepLen

Liquidity Providers (LPs) on automated market makers unintentionally leak valuable information through their on-chain actions. Adding, removing, or rebalancing liquidity immediately exposes strategy, timing, and intent, which MEV bots and informed traders can exploit. This project introduces a Liquidity Provider Privacy Shield built on Uniswap v4 Hooks, designed to reduce unnecessary information exposure from LP actions while preserving full on-chain verifiability and protocol integrity. Rather than hiding liquidity or obscuring pool state, the system minimizes when and how LP actions affect the pool, making liquidity provision more resilient to adverse selection and extractive dynamics. Liquidity Provider Privacy Shield is a Uniswap v4 Hook that minimizes strategic information leakage from LP actions—such as adding, removing, and rebalancing liquidity—by buffering and smoothing their on-chain impact, making liquidity provision more resilient to MEV and adverse selection while remaining fully verifiable. This project focuses on market-mechanism privacy, not identity or balance secrecy.

``The Liquidity Provider Privacy Shield operates by decoupling liquidity intent from immediate execution through a structured, on-chain policy enforcement process. When a liquidity provider submits a request to add, remove, or rebalance liquidity, the action is first registered as an intent within the Hook rather than being applied directly to the pool. This intent is stored with predefined parameters such as amount, range, and timestamp, while the pool’s active liquidity remains unchanged. The Hook then applies a deterministic privacy policy that governs how and when the requested change will take effect. These policies include time-delayed activation, where liquidity becomes active only after a fixed number of blocks; gradual liquidity smoothing, where large changes are broken into smaller incremental updates; and batched execution, where multiple LP intents are processed together. Through these mechanisms, the system prevents sudden liquidity shifts and eliminates clear timing signals that can be exploited by automated traders. Once the delay period expires or the scheduled increments are completed, the Hook settles the intent on-chain, updates the pool state, and ensures that fee accounting and position tracking remain accurate. All stages of this process are transparent, auditable, and deterministic, allowing any observer to verify that liquidity changes were executed according to predefined rules, while making real-time strategy inference significantly more difficult. “For the hackathon, we intentionally keep intents in memory to focus on market-mechanism privacy. Persisting intents is straightforward but orthogonal to the core idea.”