ZENDEX has launched its public testnet as it enters a new development phase for a decentralized exchange designed to limit the exposure of trading strategies and order details on public blockchains.
The project said it had completed audits by Hacken and Dual Defense ahead of the launch. Its roadmap includes a phased testnet rollout with points incentives, followed by initial liquidity provisioning and a mainnet trading venue.
The exchange combines zero-knowledge (ZK) technology with decentralized finance (DeFi) trading mechanisms.
Its longer-term roadmap includes private liquidity aggregation across Ethereum Virtual Machine (EVM)-compatible protocols and more advanced zero-knowledge-based execution features.
Combining private AMM and order book trading
Public blockchains allow observers to inspect transaction activity, potentially exposing trading strategies, order sizes and liquidity movements.
This transparency can create opportunities for front-running and sandwich attacks, forms of maximal extractable value (MEV) in which transaction ordering can be used to extract value from other traders.
ZENDEX aims to reduce this exposure by shielding trade sizes, execution intent and other sensitive information while preserving on-chain settlement.
Its proposed architecture combines two principal trading mechanisms: a shielded automated market maker (AMM) and a private limit order book.
The AMM uses constant-product pricing, while zero-knowledge commitments are designed to conceal information about positions, liquidity deployments and swap volumes. The project says Noir-based zero-knowledge circuits enforce maximum slippage rules.
The private order book allows market makers to submit limit orders as hidden commitments, with the goal of reducing information leakage before settlement.
Together with liquidity provision, these mechanisms are intended to support price discovery while limiting the information typically exposed through public blockchain transactions.
ZENDEX also uses a mechanism called Single-Epoch Inclusion Proof Reuse. According to the project, it allows users to verify eligibility across sequential trades without generating new Merkle membership proofs for every action, potentially reducing computational overhead and gas costs.
The effectiveness of these privacy and efficiency features will need to be assessed under live operating conditions as the protocol develops.
ZEN Token fees and compliance controls
ZENDEX plans to convert all protocol fees into ZEN, the legacy utility token associated with the Horizen ecosystem.
A fee-splitting mechanism is intended to distribute the converted tokens among liquidity providers, treasury operations and Horizen's existing ZEN Staking Contract.
The model is designed to connect trading activity with demand for ZEN and create a recurring flow of fees through the ecosystem. Its actual impact will depend on trading volumes, liquidity, fee levels and the mechanism's implementation after launch.
The project also plans to expand liquidity access through router-to-router connectivity and sourcing from multiple protocols.
Concentrated liquidity remains a potential future feature, while the immediate focus is on establishing initial markets and developing the infrastructure for broader liquidity aggregation.
ZENDEX’s compliance architecture will incorporate AMLBot risk scoring alongside PureFi's integration with Horizen. The proposed system aims to introduce privacy-preserving risk checks into transaction execution while retaining self-custody and permissionless access.
Under this approach, on-chain security attestations could be checked before state changes are processed, with transactions that fail predefined risk criteria rejected according to protocol rules.
The project has not provided detailed performance results demonstrating how the proposed controls will operate in practice.
The first public testnet phase is now live, featuring synthetic faucet assets and a simulated pricing environment rather than conditions representative of mainnet markets.
Additional assets and functionality would be introduced as liquidity, trading activity and ecosystem demand develop.
The project has not announced a definitive mainnet launch date. Its next stages are expected to include further testnet activities, points incentives, initial liquidity provisioning and the development of private EVM liquidity aggregation and more advanced ZK-DeFi execution features.
Arman Shirinyan
Dan Burgin
