Pendex

Private Leveraged Trading for Pre-IPO Assets

The first DeFi Dark Pool powered by Fully Homomorphic Encryption

Live Demo · Documentation

Award

Zama Developer Program - December 2025 Winner

Pendex won the Zama Developer Program Builder Track Award (December 2025)

Recognized for demonstrating real-world FHE applications in DeFi

Zama Developer Program December 2025 Winner

View Official Results

The Problem

Traditional DeFi perpetual trading platforms expose everything on-chain:

┌─────────────────────────────────────────────────────────────────────────────┐
│                    TRADITIONAL PERP PROTOCOL (PUBLIC)                       │
├─────────────────────────────────────────────────────────────────────────────┤
│                                                                             │
│  Position: 0x1234...5678                                                    │
│  ├── Size: $50,000 LONG              ← Everyone sees this                   │
│  ├── Entry Price: $157.25            ← Front-runners exploit this           │
│  ├── Leverage: 10x                   ← Liquidation hunters target this      │
│  ├── Liquidation Price: $141.52      ← Whales manipulate to trigger this    │
│  └── Owner: 0xABC...123              ← Copy traders follow this             │
│                                                                             │
│  Result: Front-running, liquidation hunting, copy trading attacks          │
│                                                                             │
└─────────────────────────────────────────────────────────────────────────────┘

Attack Vector	Description	Impact
Front-Running	MEV bots see your trade before execution	Worse execution price
Liquidation Hunting	Whales push price to trigger liquidations	Forced position closure
Copy Trading	Others mirror your trades without consent	Alpha extraction
Stop Loss Raids	Visible stop losses get targeted	Premature exits

Our Solution

Pendex encrypts everything using Zama's Fully Homomorphic Encryption:

┌─────────────────────────────────────────────────────────────────────────────┐
│                         PENDEX DARK POOL (ENCRYPTED)                        │
├─────────────────────────────────────────────────────────────────────────────┤
│                                                                             │
│  Position: 0x1234...5678                                                    │
│  ├── Size: 0x7f3a...encrypted        ← Nobody can see                       │
│  ├── Entry Price: 0x8b2c...encrypted ← Front-running impossible             │
│  ├── Leverage: 0x1d4f...encrypted    ← Liquidation hunting impossible       │
│  ├── Direction: 0x9a3e...encrypted   ← Long or Short? Unknown               │
│  └── Owner: 0xf2e1...encrypted       ← Optional: Full anonymity             │
│                                                                             │
│  Result: Trade with complete privacy - even validators can't see            │
│                                                                             │
└─────────────────────────────────────────────────────────────────────────────┘

How FHE Works

Fully Homomorphic Encryption (FHE) allows computation on encrypted data without decryption:

┌─────────────────────────────────────────────────────────────────────────────┐
│                     TRADITIONAL vs FHE ENCRYPTION                           │
├─────────────────────────────────────────────────────────────────────────────┤
│                                                                             │
│  TRADITIONAL:                                                               │
│  ┌──────────┐    ┌──────────┐    ┌──────────┐    ┌──────────┐              │
│  │ Encrypted│ -> │ DECRYPT  │ -> │ Process  │ -> │ Encrypt  │              │
│  │   Data   │    │   ⚠️     │    │   ⚠️     │    │  Again   │              │
│  └──────────┘    └──────────┘    └──────────┘    └──────────┘              │
│                        ↑              ↑                                     │
│                    DATA EXPOSED DURING PROCESSING!                          │
│                                                                             │
│  ─────────────────────────────────────────────────────────────────────────  │
│                                                                             │
│  ZAMA FHE:                                                                  │
│  ┌──────────┐    ┌──────────────────────────┐    ┌──────────┐              │
│  │ Encrypted│ -> │ Process while encrypted  │ -> │ Encrypted│              │
│  │   Data   │    │      ✅ SECURE           │    │  Result  │              │
│  └──────────┘    └──────────────────────────┘    └──────────┘              │
│                                                                             │
│                    DATA NEVER EXPOSED - EVER!                               │
│                                                                             │
└─────────────────────────────────────────────────────────────────────────────┘

FHE Data Types in Pendex

Type	Usage	Example
`euint64`	Encrypted 64-bit unsigned integer	Balance, Price, Size
`ebool`	Encrypted boolean	Long/Short direction
`eaddress`	Encrypted address	Anonymous position owner

FHE Operations Used

Category	Operations	Use Case
Arithmetic	`FHE.add()`, `FHE.sub()`, `FHE.mul()`, `FHE.div()`	P&L calculation
Comparison	`FHE.gt()`, `FHE.lt()`, `FHE.ge()`, `FHE.eq()`	Liquidation checks
Conditional	`FHE.select()`	Branchless encrypted logic
Negative	`FHE.neg()`	Two's complement for losses
Access Control	`FHE.allow()`, `FHE.allowThis()`	Decryption permissions

Dark Pool Architecture

What Others Can and Cannot See

┌─────────────────────────────────────────────────────────────────────────────┐
│                         PRIVACY GUARANTEES                                  │
├────────────────────────────────┬────────────────────────────────────────────┤
│     ❌ ENCRYPTED (Hidden)      │     ✅ PUBLIC (Visible)                    │
├────────────────────────────────┼────────────────────────────────────────────┤
│                                │                                            │
│  • Position size               │  • Asset being traded (SpaceX, OpenAI)    │
│  • Entry price                 │  • Position exists (not details)          │
│  • Leverage amount             │  • Total Open Interest (aggregated)       │
│  • Long/Short direction        │  • Mark prices from oracle                │
│  • Profit & Loss               │  • Liquidity score                        │
│  • Wallet balance              │  • Trading timestamps                     │
│  • Order trigger prices        │                                            │
│  • Owner address (optional)    │                                            │
│                                │                                            │
└────────────────────────────────┴────────────────────────────────────────────┘

Example

What an observer sees:
  "Wallet 0x123 has 3 positions on Pendex"

What they DON'T see:
  "Wallet 0x123 is $50K long on SpaceX with 5x leverage, entry $180"

Tradeable Assets

Pre-IPO Synthetic Shares

6 high-growth private companies available for trading:

Company	Category	Base Price	Valuation	Symbol
OpenAI	AI	$250	$250B	OPENAI
Anthropic	AI	$95	$95B	ANTHR
SpaceX	Aerospace	$180	$180B	SPACEX
Stripe	FinTech	$48	$48B	STRIPE
Databricks	Data	$55	$55B	DTBRKS
ByteDance	Social	$165	$165B	BYTDNC

Pricing Formula

Synthetic Share Price = Company Valuation / 1,000,000,000 shares

Example: SpaceX
$180B valuation ÷ 1B shares = $180 per synthetic share

Synthetic vs Real Shares

Feature	Real Pre-IPO Shares	Pendex Synthetic
Ownership	Company equity	Price exposure only
Voting Rights	Yes	No
Dividends	Yes	No
Short Selling	Very difficult	Easy (1-click)
Leverage	Requires margin account	Built-in 1-10x
Minimum Investment	$100,000+	$1
KYC Required	Yes (accredited)	No
Trading Hours	Business hours	24/7
Privacy	Fully tracked	FHE encrypted

Key Features

1. Dark Pool Trading

Trade privately without exposing positions. No front-running, no copy trading, no liquidation hunting.

2. Session Wallet (Popup-Free Trading)

One-time wallet setup stores an encrypted session key on-chain using FHE. Trade without MetaMask popups!

3. Direct sUSD Trading (Hyperliquid-Style)

No vault deposits required. Get sUSD from faucet and trade immediately.

4. Encrypted Limit Orders

Set stop-loss and take-profit orders that are invisible to MEV bots.

5. Anonymous Mode (eaddress)

Optional full anonymity - even your wallet address is encrypted.

6. GMX-Style Liquidity Pool

Stake LP tokens to earn 50% of trading fees. Trader losses = LP gains.

System Architecture

┌─────────────────────────────────────────────────────────────────────────────┐
│                           PENDEX ARCHITECTURE                               │
└─────────────────────────────────────────────────────────────────────────────┘

                              ┌─────────────────┐
                              │   USER WALLET   │
                              │   (MetaMask)    │
                              └────────┬────────┘
                                       │
                    ┌──────────────────┼──────────────────┐
                    │                  │                  │
                    ▼                  ▼                  ▼
          ┌─────────────────┐ ┌─────────────────┐ ┌─────────────────┐
          │   FRONTEND      │ │  SESSION WALLET │ │   FHE SDK       │
          │   (Next.js 14)  │ │  (Popup-free)   │ │   (Encryption)  │
          └────────┬────────┘ └────────┬────────┘ └────────┬────────┘
                   │                   │                   │
                   └───────────────────┼───────────────────┘
                                       │
                                       ▼
┌─────────────────────────────────────────────────────────────────────────────┐
│                      ETHEREUM SEPOLIA + ZAMA FHE                            │
├─────────────────────────────────────────────────────────────────────────────┤
│                                                                             │
│  ┌───────────────────────────────────────────────────────────────────────┐  │
│  │                        SHADOW VAULT (Core)                            │  │
│  │  ┌─────────────────┐  ┌─────────────────┐  ┌─────────────────┐       │  │
│  │  │    Encrypted    │  │    Anonymous    │  │   Encrypted     │       │  │
│  │  │    Positions    │  │    Positions    │  │   Limit Orders  │       │  │
│  │  │                 │  │                 │  │                 │       │  │
│  │  │  • euint64 coll │  │  • eaddress own │  │  • euint64 trig │       │  │
│  │  │  • euint64 size │  │  • euint64 coll │  │  • euint64 size │       │  │
│  │  │  • euint64 entr │  │  • ebool isLong │  │  • ebool isLong │       │  │
│  │  │  • ebool isLong │  │                 │  │                 │       │  │
│  │  └─────────────────┘  └─────────────────┘  └─────────────────┘       │  │
│  └───────────────────────────────────────────────────────────────────────┘  │
│                                       │                                     │
│            ┌──────────────────────────┼──────────────────────────┐          │
│            │                          │                          │          │
│            ▼                          ▼                          ▼          │
│  ┌─────────────────┐       ┌─────────────────┐       ┌─────────────────┐   │
│  │   SHADOW USD    │       │  SHADOW ORACLE  │       │  LIQUIDITY POOL │   │
│  │   (ERC-7984)    │       │                 │       │   (GMX-style)   │   │
│  │                 │       │  • Base prices  │       │                 │   │
│  │  • Encrypted    │       │  • Demand mod   │       │  • Encrypted LP │   │
│  │    balances     │◄─────►│  • OI tracking  │◄─────►│    balances     │   │
│  │  • Confidential │       │  • 6 assets     │       │  • Fee sharing  │   │
│  │    transfers    │       │                 │       │                 │   │
│  └─────────────────┘       └─────────────────┘       └─────────────────┘   │
│                                       │                                     │
│                                       ▼                                     │
│                          ┌─────────────────────┐                            │
│                          │   WALLET MANAGER    │                            │
│                          │  (Session Keys)     │                            │
│                          │                     │                            │
│                          │  • Encrypted key    │                            │
│                          │    storage (FHE)    │                            │
│                          │  • EIP-712 decrypt  │                            │
│                          └─────────────────────┘                            │
│                                                                             │
└─────────────────────────────────────────────────────────────────────────────┘

Session Wallet

The Problem with Traditional DeFi

Every transaction requires a MetaMask popup → Poor UX for active traders

Our Solution: Encrypted Session Keys

┌─────────────────────────────────────────────────────────────────────────────┐
│                        SESSION WALLET FLOW                                  │
├─────────────────────────────────────────────────────────────────────────────┤
│                                                                             │
│  ┌─────────────────────────────┐    ┌─────────────────────────────┐        │
│  │      SETUP (One-time)       │    │   INITIALIZE (Each session) │        │
│  ├─────────────────────────────┤    ├─────────────────────────────┤        │
│  │                             │    │                             │        │
│  │  1. Generate random wallet  │    │  1. Connect main wallet     │        │
│  │  2. Encrypt private key     │    │  2. Sign EIP-712 message    │        │
│  │     with FHE                │    │  3. Decrypt session key     │        │
│  │  3. Store encrypted key     │    │     from on-chain           │        │
│  │     on WalletManager        │    │  4. Session ready!          │        │
│  │  4. Fund with 0.01+ ETH     │    │     (no more popups)        │        │
│  │                             │    │                             │        │
│  └─────────────────────────────┘    └─────────────────────────────┘        │
│                                                                             │
└─────────────────────────────────────────────────────────────────────────────┘

Security Guarantees

Aspect	Protection
Limited Permissions	Session wallet can ONLY execute trades, not access main wallet
Encrypted Storage	Private key is FHE encrypted on-chain
Owner-Only Decrypt	Only main wallet owner can decrypt session key
Minimal Risk	Worst case: only lose small ETH amount for gas

Gas Requirements

Amount	Trades Possible
0.1 ETH	~1 trade
0.5 ETH	~3 trades
1.0 ETH	~6+ trades

FHE transactions are more expensive due to encryption overhead (~0.15 ETH per trade)

Price Mechanism

Two-Component Pricing

┌─────────────────────────────────────────────────────────────────────────────┐
│                          PRICE FORMULA                                      │
├─────────────────────────────────────────────────────────────────────────────┤
│                                                                             │
│    Mark Price = Base Price × (1 + Demand Modifier)                          │
│                                                                             │
│    ┌─────────────────┐         ┌─────────────────────────┐                  │
│    │   BASE PRICE    │    +    │    DEMAND MODIFIER      │                  │
│    ├─────────────────┤         ├─────────────────────────┤                  │
│    │                 │         │                         │                  │
│    │ Latest funding  │         │ (Long OI - Short OI)    │                  │
│    │ round valuation │         │ ───────────────────     │                  │
│    │                 │         │       10,000            │                  │
│    │ Example:        │         │                         │                  │
│    │ OpenAI = $250   │         │ Range: -20% to +20%     │                  │
│    │                 │         │                         │                  │
│    └─────────────────┘         └─────────────────────────┘                  │
│                                                                             │
│    Example Calculation:                                                     │
│    ─────────────────────                                                    │
│    Base Price: $250 (OpenAI)                                                │
│    Long OI: $50,000 | Short OI: $30,000                                     │
│    Demand Modifier: ($50K - $30K) / $10K = +0.2% (+2%)                      │
│    Mark Price: $250 × 1.02 = $255                                           │
│                                                                             │
└─────────────────────────────────────────────────────────────────────────────┘

Open Interest Impact

Scenario	Effect
More Longs than Shorts	Price pushed UP (max +20%)
More Shorts than Longs	Price pushed DOWN (max -20%)
Equal Long/Short	Price = Base Price

Trading Flow

Step-by-Step

┌───┐  ┌────────────────────────────────────────────────────────────────────┐
│ 1 │  │ Connect Wallet                                                     │
│   │  │ Connect MetaMask and switch to Sepolia testnet                     │
└───┘  └────────────────────────────────────────────────────────────────────┘
           │
           ▼
┌───┐  ┌────────────────────────────────────────────────────────────────────┐
│ 2 │  │ Setup Session Wallet (One-time)                                    │
│   │  │ Create session wallet, encrypt key with FHE, store on-chain        │
└───┘  └────────────────────────────────────────────────────────────────────┘
           │
           ▼
┌───┐  ┌────────────────────────────────────────────────────────────────────┐
│ 3 │  │ Fund Session Wallet                                                │
│   │  │ Send 0.1-0.5 ETH for gas fees                                      │
└───┘  └────────────────────────────────────────────────────────────────────┘
           │
           ▼
┌───┐  ┌────────────────────────────────────────────────────────────────────┐
│ 4 │  │ Get sUSD                                                           │
│   │  │ Claim test tokens from faucet (Wallet page)                        │
└───┘  └────────────────────────────────────────────────────────────────────┘
           │
           ▼
┌───┐  ┌────────────────────────────────────────────────────────────────────┐
│ 5 │  │ Select Asset & Configure Position                                  │
│   │  │ Choose asset, set Long/Short, leverage (1-10x), and collateral     │
└───┘  └────────────────────────────────────────────────────────────────────┘
           │
           ▼
┌───┐  ┌────────────────────────────────────────────────────────────────────┐
│ 6 │  │ Open Position (No Popup!)                                          │
│   │  │ Session wallet signs transaction automatically                     │
└───┘  └────────────────────────────────────────────────────────────────────┘
           │
           ▼
┌───┐  ┌────────────────────────────────────────────────────────────────────┐
│ 7 │  │ Close Position & Collect Profits                                   │
│   │  │ Close when ready, profits added to sUSD balance                    │
└───┘  └────────────────────────────────────────────────────────────────────┘

Fee Structure

Trading Fees

Fee Type	Rate	Description
Trading Fee	0.3%	On position open/close
Liquidation Fee	1.0%	If position is liquidated

Fee Distribution

┌─────────────────────────────────────────────────────────────────────────────┐
│                          FEE DISTRIBUTION                                   │
├─────────────────────────────────────────────────────────────────────────────┤
│                                                                             │
│                        Total Fees Collected                                 │
│                              │                                              │
│                    ┌─────────┴─────────┐                                    │
│                    │                   │                                    │
│                    ▼                   ▼                                    │
│             ┌───────────┐       ┌───────────┐                               │
│             │    50%    │       │    50%    │                               │
│             │ LP Stakers│       │ Protocol  │                               │
│             │           │       │ Treasury  │                               │
│             └───────────┘       └───────────┘                               │
│                                                                             │
└─────────────────────────────────────────────────────────────────────────────┘

Leverage Example

Collateral: $1,000
Leverage: 5x
Position Size: $5,000

┌─────────────────────────────────────────────────────────────────┐
│ If price increases 10%:                                         │
│ Profit = $5,000 × 10% = $500 (+50% on collateral)              │
├─────────────────────────────────────────────────────────────────┤
│ If price decreases 10%:                                         │
│ Loss = $5,000 × 10% = $500 (-50% on collateral)                │
├─────────────────────────────────────────────────────────────────┤
│ Liquidation at -100% collateral loss (varies by leverage)       │
└─────────────────────────────────────────────────────────────────┘

Smart Contracts

Deployed on Sepolia Testnet

Contract	Address	Description
ShadowVault	`0x2ECB31ac17cF357B33CD81AA23983f39249c2322`	Core trading engine
ShadowOracle	`0x4e819459EEE3061f10D7d0309F4Ba39Af5A68f81`	Price oracle
ShadowUSD	`0x6ABe3F3791B4Cee0f47dA1F10B4106c50C0EE6BC`	ERC-7984 stablecoin
ShadowLiquidityPool	`0x548F8CbA6Fa4717BC6890D0f3175094c1FEeaa87`	LP staking
WalletManager	`0x4de6E26b438e61ead479f46BCe309D5d0a16bD71`	Session key storage

Contract Architecture

ShadowVault.sol (Core)
├── openPosition()           # Encrypted position opening
├── closePosition()          # Encrypted position closing
├── openAnonymousPosition()  # With eaddress (full anonymity)
├── placeLimitOrder()        # Encrypted trigger price
└── liquidatePosition()      # Automatic at -100%

ShadowUSD.sol (ERC-7984)
├── confidentialBalanceOf()  # Returns encrypted balance
├── confidentialTransfer()   # Encrypted token transfer
├── setOperator()            # Grant transfer permissions
└── faucetMint()             # Testnet token minting

ShadowOracle.sol
├── getMarkPrice()           # Base + demand modifier
├── updateOpenInterest()     # Track Long/Short OI
└── getAssetInfo()           # Asset metadata

WalletManager.sol
├── storeSessionKey()        # FHE-encrypted key storage
├── getSessionKey()          # Decrypt with EIP-712
└── revokeSessionWallet()    # Invalidate session

Tech Stack

Layer	Technology	Purpose
Smart Contracts	Solidity 0.8.24	Core protocol logic
FHE	Zama fhEVM 0.9.1	Encryption layer
FHE SDK	@zama-fhe/relayer-sdk	Client encryption
Frontend	Next.js 14, React 18	User interface
Web3	wagmi 2.x, viem	Blockchain interaction
Wallet	RainbowKit	Wallet connection
Charts	TradingView Lightweight	Price visualization
Styling	Tailwind CSS	UI styling

Quick Start

Prerequisites

Node.js v20+
MetaMask browser extension
Sepolia ETH (from faucet)

Installation

# Clone repository
git clone https://github.com/Himess/shadow-protocol.git
cd shadow-protocol

# Install frontend dependencies
cd frontend && npm install

# Start development server
npm run dev

Use the Live Demo

Visit https://shadow-protocol-nine.vercel.app/
Connect MetaMask (switch to Sepolia)
Go to Wallet → Get sUSD from Faucet
Go to Trade → Set up Session Wallet
Open your first encrypted position!

Team

Built by Himess

License

BSD-3-Clause-Clear - See LICENSE for details.

Links

Pendex - Trade in the shadows, not in the spotlight.

Name		Name	Last commit message	Last commit date
Latest commit History 137 Commits
.vscode		.vscode
backend		backend
contracts		contracts
deploy		deploy
docs		docs
frontend		frontend
scripts		scripts
tasks		tasks
test		test
.env.example		.env.example
.eslintignore		.eslintignore
.eslintrc.yml		.eslintrc.yml
.gitignore		.gitignore
.prettierignore		.prettierignore
.prettierrc.yml		.prettierrc.yml
.solcover.js		.solcover.js
.solhint.json		.solhint.json
.solhintignore		.solhintignore
LICENSE		LICENSE
README.md		README.md
hardhat.config.ts		hardhat.config.ts
package-lock.json		package-lock.json
package.json		package.json
tsconfig.json		tsconfig.json

License

Himess/Pendex

Folders and files

Latest commit

History

Repository files navigation

Pendex

Table of Contents

Award

Zama Developer Program - December 2025 Winner

The Problem

Our Solution

How FHE Works

FHE Data Types in Pendex

FHE Operations Used

Dark Pool Architecture

What Others Can and Cannot See

Example

Tradeable Assets

Pre-IPO Synthetic Shares

Pricing Formula

Synthetic vs Real Shares

Key Features

1. Dark Pool Trading

2. Session Wallet (Popup-Free Trading)

3. Direct sUSD Trading (Hyperliquid-Style)

4. Encrypted Limit Orders

5. Anonymous Mode (eaddress)

6. GMX-Style Liquidity Pool

System Architecture

Session Wallet

The Problem with Traditional DeFi

Our Solution: Encrypted Session Keys

Security Guarantees

Gas Requirements

Price Mechanism

Two-Component Pricing

Open Interest Impact

Trading Flow

Step-by-Step

Fee Structure

Trading Fees

Fee Distribution

Leverage Example

Smart Contracts

Deployed on Sepolia Testnet

Contract Architecture

Tech Stack

Quick Start

Prerequisites

Installation

Use the Live Demo

Team

License

Links

About

Resources

License

Uh oh!

Stars

Watchers

Forks

Releases

Packages 0

Languages

Packages