How Silhouette Works
Silhouette provides privacy for your Hyperliquid trades. Here's how it protects you.
The Privacy Problem
On-chain transactions are public. When you trade:
- Your wallet address is visible
- Your trade history is traceable
- Others can see your positions
- MEV bots can front-run your trades
The Silhouette Solution
Silhouette creates a shielded pool that breaks the link between your wallet and your trades.
Deposit Phase
When you deposit:
- Funds enter the shared shielded pool
- Your deposit is visible on-chain
- But inside the pool, funds are mixed
Trading Phase
When you swap:
- Trade executes within the pool
- No on-chain transaction tied to you
- Other pool users provide anonymity
Withdrawal Phase
When you withdraw:
- Funds leave the pool to your wallet
- Withdrawal is visible on-chain
- But it's not linked to any specific trade
What's Protected
| Activity | Privacy Level |
|---|---|
| Deposit | Address visible, amount visible |
| Swap | Fully private |
| Withdrawal | Address visible, amount visible |
| Trade history | Not linkable to deposits/withdrawals |
What This Means
An observer can see:
- ✅ That you deposited to Silhouette
- ✅ That you withdrew from Silhouette
- ❌ What you traded inside
- ❌ Your positions
- ❌ Your trading strategy
Authentication
Silhouette uses signature-based authentication:
- You sign a message with your wallet
- This creates a temporary session
- Session allows trading without wallet popups
- Session expires for security
No private keys are ever shared with Silhouette.
Trust Model
Silhouette is a trusted intermediary:
- Funds are custodied by Silhouette during use
- Trade execution relies on Silhouette's API
- You trust Silhouette to execute fairly
This is different from trustless DeFi, but enables privacy not possible on-chain.