Are decentralized exchanges tracking your trades?

Are decentralized exchanges tracking your trades? 1
Are decentralized exchanges tracking your trades? 2

Are decentralized exchanges tracking your trades?

by Tim Copeland
Are decentralized exchanges tracking your trades? 3
Quick Takes
  • Decentralized exchanges are often seen as a privacy-first alternative to centralized exchanges.
  • Yet many of the biggest ones are tracking what trades their users are making and collecting data that could be used to identify them.
Decentralized cryptocurrency exchanges are supposed to be the privacy advocate’s alternative to centralized exchanges, which by law must identify their users and report certain information to the government. Since no one owns or controls a decentralized protocol, there is no one standing in the middle collecting information about users and their transactions.

Well, that’s the theory.

In practice, the startups behind some of the top DEXs are deploying fairly sophisticated surveillance tools.

Recently it was highlighted that Brooklyn-based Uniswap Labs, the company behind Uniswap, the most popular DEX on Ethereum by trading volume, has a partnership with TRM Labs, a blockchain analytics firm that works with government agencies to investigate crypto-related crime and provides transaction analysis for the US Internal Revenue Service.

Uniswap isn’t the only DEX that is collecting on-chain and off-chain information about its users. Other DEXs, such as dYdX — which saw soaring volume this year — and DEX aggregator 1inch do so, too. These sites detail their tracking activities in their privacy policies.

DEX aggregator ParaSwap, meanwhile, says that although it collects user data, it goes to great lengths to preserve privacy. ParaSwap tries to collect a minimal amount of data and only stores it for a short period of time.

The Block reached out to five of the top DEXs and aggregators to ask about their user data collection practices. We also analyzed the privacy policies that some of these platforms have published. We did not receive a comment by press time from Binance Smart Chain-based DEX PancakeSwap. We were unable to determine how to contact Curve Finance, and were unable to locate privacy policies for PancakeSwap and Curve Finance.

Below we highlight what we learned from this reporting.

Read Full Story
Are decentralized exchanges tracking your trades? 4
You Should Know
Bitcoin miners generated more than $15 billion in revenue during 2021
The estimate represents a year-over-year increase of 206%, per The Block Research’s 2022 Digital Asset Outlook Report. It should be noted that the estimate is premised on the notion that mining companies sell their accrued digital assets to pay for electrical power and other resources; some miners hold on to some of their mined coins.
Read Full Story
SWIFT will test how it might play a role in asset tokenization next year
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is planning to conduct a trial early next year that will see the global payments intermediary explore how it may play a role in the nascent asset tokenization market.
Read Full Story
Decentralized exchanges saw over $1 trillion in trading volume this year
That $1 trillion figure is a massive 858% increase compared to 2020 DEX trading volumes, based on data as of December 23. Last year, DEXs facilitated over $115 billion in trading volumes.
Read Full Story
Are decentralized exchanges tracking your trades? 5
Are decentralized exchanges tracking your trades? 6
Discover a New Way to Money

Bakkt is connecting crypto, rewards, and payments to provide people with new ways to money. With the Bakkt App, you can unlock the value of digital assets – from buying, selling, holding, spending, or sending crypto, to cashing out on select rewards points.  

Just getting started with cryptocurrency? Open your crypto wallet on the Bakkt App and buy bitcoin or ethereum without any transaction fees*. Then you might want to try using that bitcoin to make a purchase with your virtual Bakkt® Visa® Debit Card, or a pay a friend back for lunch.  

Download Bakkt today to discover new ways to money. It’s free to download in the App Store® or on Google PlayTM.

*Click here to learn about Bakkt’s spreads for crypto transactions

Bakkt® Visa® Debit Card is issued by Sutton Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.

Learn More
From the Dashboard
Are decentralized exchanges tracking your trades? 7
Overall, monthly DEX trading volume peaked in May 2021 at $162.8 billion. The most considerable month-over-month growth was in January, with a 137.3% gain, per The Block Research’s 2022 Digital Asset Outlook Report.
View on Data Dashboard
Tweet for Thought
Are decentralized exchanges tracking your trades? 8
See on Twitter

Regulatory clarity to spur institutional crypto investment in Asia

by Eventus
As regulators seek to develop appropriate investor protections for digital assets, more traditional investors are moving into the asset class.
Learn More
You are receiving this e-mail because you are subscribed to The Block’s free newsletter. If someone shared this newsletter with you, you can easily subscribe to receive it in your inbox here. If you’re looking for even more content, we have a separate newsletter for The Block Research, which you can sign-up for here.
Are decentralized exchanges tracking your trades? 9

The Block

45 Bond Street, Floor 5, New York, NY 10012

U U Preferences

Are decentralized exchanges tracking your trades? 10

Related Articles

Back to top button