Darkpool Deepdive #7

In the last edition of our Darkpool Deepdive Series, we explored how Singularity’s book nodes match encrypted orders without ever revealing trade details.

But matching is only half the story.

Once two orders are matched - securely and privately - how are those trades executed? How is settlement handled when the system still doesn’t know what was traded, in what amount, or by whom?

In this edition, we unpack how Singularity settles trades inside a 100% dark environment, supporting both full-order execution and flexible handling for partial fills - all without exposing sensitive information.

What Makes Settlement in a Darkpool Different?

In traditional DeFi venues like AMMs or public orderbooks, settlement is entirely transparent - order details are published and trades are executed directly on-chain. 

This is great for retail, but fails to meet the discretion and control required by institutions and sophisticated market participants, as well as anyone who cares about privacy for that matter.

Singularity’s settlement layer was designed from the ground up to support:

• Private post-trade workflows
• Compliant recordkeeping
• Flexible execution with zero data exposure

It supports two primary execution paths:

1. Automated Settlement for Full Matches

When two orders are perfectly matched (same asset pair, compatible price, and size), Singularity executes a fully automated and private settlement.

This mimics the privacy outcomes of OTC execution in TradFi - but without any manual negotiation or coordination between parties.

Key Features:

• Non-custodial execution: Settlement is handled by encrypted smart contract logic - no third-party escrow or intermediaries.
• Zero exposure: No information about asset, size, or counterparty is ever broadcast.

2. Automated Settlement for Partial Matches (Auto-Split)

When large or complex orders can’t be fully filled, Singularity supports programmatic settlement for the matched portion - while preserving privacy for the rest.

This is especially useful for:

• Protocols managing large flows
• Liquidity providers offering depth
• Institutions executing high-frequency or high-volume strategies

How It Works:

• The matching engine detects partial compatibility (i.e 75% of an order matches).
  
  
• The system auto-splits the order into two parts: matched and unmatched.
  
  
• The matched portion is settled automatically via encrypted smart contracts.
  
  
• The unmatched portion remains in the Darkpool - private, live, and awaiting new fills.

This allows continuous liquidity without revealing unfilled intentions, unlike traditional orderbooks.

Security & Privacy at Every Step

Regardless of the execution path, two principles remain constant:

• End-to-end encryption of all order data
• No on-chain footprint beyond the fact that a trade occurred

All settlement communications and confirmations are handled under privacy-preserving cryptographic frameworks - invisible even to validators and indexers.

Real-World Flow Example

1. Match - Book node identifies compatible encrypted orders

2. Notify - Encrypted match confirmations sent to involved users in the form of settled orders

3a. Full Match - Orders are settled automatically via encrypted smart contracts

3b. Auto-Split - Partially matched orders are settled; remaining amounts stay in the pool

4. Finalize - Private settlement completed - no trade data is exposed on-chain

Why This Matters

Settlement is where execution risk and privacy risk converge.

In public DeFi, every trade leaks intent - causing slippage, frontrunning, and strategy exposure.

In TradFi, OTC settlement is manual, opaque, and often slow.

Singularity offers a third way:

• Institutional discretion
• Programmable automation
• End-to-end privacy assurance

A new execution standard for a new generation of traders.

Thanks for reading yet another edition of Singularity’s Darkpool Deepdive series. Stay tuned for the next one!

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