DeversiFi uses a Validium approach to Layer-2 scaling. This means that DeversiFi trade data is held off-chain and a Data Availability Committee is used. The DAC has three main jobs:

1) Protect user trading privacy by allowing balance updates and trades to be hidden from other users and from on-chain data.
2) Check the balances state and if valid sign to allow the merkel root of the state to be updated on-chain.
3) Publish all balances data if DeversiFi and or StarkWare were ever to go offline or withhold data.

So how private is your trading, swapping and transfer activity on DeversiFi?

The only people who can view your trading activity on DeversiFi is you and DeversiFi itself (if we wanted to). DeversiFi operates the off-chain matching engine and order books, therefore trade data is stored on DeversiFi servers before being submitted to the Layer-2 proof mechanism to enforce the trustless swap of user funds between users. Other DeversiFi users and on-chain viewers cannot see your activity.

The DAC can see the changes in user account balances (vaults), as this is needed to verify that each new state is correct. The DAC sees the change in balances across the entire exchange, but not the movement of funds between accounts.

It is not possible for any on-chain observer to deduce your trading activity on DeversiFi from looking at the proof that DeversiFi periodically submits on-chain (to update the state of user's balances).

A cunning on-chain detective may watch the deposits & withdrawal from/to your Layer-1 wallet to/from DeversiFi, but you can use the DeversiFi fast withdrawal service to specify a different Layer-1 address to send your funds to when making a withdrawal from DeversiFi

What is the TLDR?

DeversiFi is useful for preserving your privacy from people looking at your wallet address as your activity is hidden from other users and is not visible on-chain.
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