Crypto Broker Hidden Road Collaborates With Confidential Exchange Enclave Markets

The partnership combines a confidential trading environment with execution and settlement done directly from custody via Hidden Road’s network.

AccessTimeIconJul 27, 2023 at 1:00 p.m. UTC

Hidden Road, a cryptocurrency brokerage and credit network for institutions, has entered into a partnership with Enclave Markets, a fully encrypted exchange that allows participants to confidentially trade blocks of digital assets.

Front-running of trades is an acute problem in crypto, which features unique issues like maximal extracted value (MEV), where blockchain miners and verifiers can profit from pending transactions. Traders at competing firms may also avoid trading with one another to prevent potential information leakage, hence the need for an anonymous trading environment.

  • Fed Sees Just One Rate Cut This Year; CRV Slides as Curve’s Founder Faces Liquidation Risk
    01:49
    Fed Sees Just One Rate Cut This Year; CRV Slides as Curve’s Founder Faces Liquidation Risk
  • What's Next for Bitcoin After Fed Predicts Just One Rate Cut for 2024
    00:50
    What's Next for Bitcoin After Fed Predicts Just One Rate Cut for 2024
  • Litecoin Creator Charlie Lee on Company Evolution
    09:05
    Litecoin Creator Charlie Lee on Company Evolution
  • U.S. CPI Returns Flat in May; Donald Trump Wants All Remaining Bitcoin to Be 'Made in USA'
    01:45
    U.S. CPI Returns Flat in May; Donald Trump Wants All Remaining Bitcoin to Be 'Made in USA'
  • Enclave, an idea originally proposed and incubated by the Ava Labs team, has coded up a exchange matching engine and account management system inside an Intel Software Guard Extensions (SGX) secure enclave, a type of hardware used to minimize cyber security threats.

    Enclave’s Fully Encrypted Exchange, or FEX, offers a confidential trading environment rather like a dark pool in traditional markets. The model essentially creates a crossing network using a pricing oracle to establish a midpoint price for an asset, averaged across various trading venues.

    When a user logs on, funds an account and submits an order, they only need the size and direction of the proposed trade; they don’t need to put in the price, because all the trades are matched at that midpoint price whenever there’s liquidity on the other side, explained Enclave Markets CEO David Wells.

    The partnership with Hidden Road further assures institutions since trading and settlement of assets is done directly from custody, with the added buying power of a credit line that’s typically offered by prime brokers.

    “Traditional institutions don’t want to integrate directly with exchanges, send their funds and have that counterparty risk,” said Wells in an interview with CoinDesk. “An API call allows you to submit your order to the Enclave marketplace liquidity pool. We then match that order and report that trade back to Hidden Road, who do all the settlement and clearing on their side, netting those trades out against other trades done that day in different venues.”

    As well as integrating with Hidden Road’s network of custodians, Enclave is also partnering directly with custody platforms, including BitGo, Wells pointed out.

    Hidden Road, which raised $50 million last year from big players like Citadel Securities and Coinbase, has been busy adding partners in bid to build more grown-up crypto trading infrastructure.

    “Enclave’s novel, albeit familiar, approach offers Hidden Road counterparties a secure, anonymous and streamlined option for trading digital assets,” said Michael Higgins, Global Head of Business Development at Hidden Road in a statement.

    Edited by Parikshit Mishra.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Ian Allison

    Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.