Privacy & Shielding
How TEE Mixers Work for Private Betting
Prediction markets are often "Dark Markets" where information is sensitive. If a known developer bets "NO" on their own roadmap delivery, it signals failure. Therefore, privacy is essential for honest signal extraction.
CogniFi integrates Phala Network TEEs to act as a localized mixer.
Encryption: The user generates a trade request ("Buy 100 YES shares") and encrypts it with the TEE's public key.
Submission: The encrypted payload is sent to the TEE node. The blockchain only sees a transaction from the user to the TEE Pool.
Decryption and Mixing: Inside the secure enclave, the TEE decrypts the intent. It aggregates this trade with others or delays it randomly.
Execution: The TEE sends the buy order to the LMSR contract using the Pool's omnibus wallet.
Accounting: The TEE maintains an encrypted internal ledger mapping the user's address to their shares.
Result: The blockchain shows "The Privacy Pool bought YES." No outside observer can link that trade to the specific user wallet.
Auditability vs. Anonymity
While the betting is private, the solvency of the system must be public.
Proof of Solvency: The TEE generates a Zero-Knowledge Proof (ZK-Proof) or a remote attestation periodically.
Statement: "I hold X shares of YES and Y shares of NO on behalf of users, which matches the on-chain balance." This ensures the TEE is not stealing funds while maintaining user anonymity.
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