Manta Network has closed a $1.1 million funding round to create a fully private decentralized exchange on Polkadot.

Announced on Tuesday, the round was led by Polychain Capital and joined by Hypersphere Ventures, Three Arrows Capital, Defiance Capital, Multicoin Capital, Alameda Research, BTC12 Capital, Genblock Capital, Rarestone Capital, AU21 Capital and TRG Capital.

Manta wants to create an automated market maker exchange on Polkadot that would feature fully private swaps. It uses zk-SNARKs with Groth16 proofs, which is the same cryptographic technology used in Zcash (ZEC).

True privacy has been hard to obtain in decentralized finance. All DeFi protocols are easy to trace through blockchain analytics software, as the smart contracts make no effort to obfuscate the flow of funds, even if it passes through multiple tokens.

For decentralized exchanges, this lack of privacy has a tangible effect on markets. The phenomenon of front-running is pervasive in DeFi. Bots will look out for any transaction that can be copied and broadcast at a higher fee rate, ensuring that the bot will get the loot before the original sender. On exchanges like Uniswap, front-runners will place their bids just before a large order, extracting value from the trade. Though there are protection mechanisms against this practice — most importantly, the slippage tolerance setting — the complete transparency of most smart contract blockchains discourages serious trading activity.

In a survey conducted by the Manta team, almost three-quarters of respondents had second thoughts about performing a transaction due to its privacy implications, while 84% had concerns about linking their blockchain activity to their real identities.

The decentralized exchange framework used by Manta extends the concept of shielded tokens to create completely private swaps. The zk-SNARKs are used to obfuscate the swap while ensuring that the transaction follows certain rules — for example, that the coins have not been spent before.

Manta will exist as a parachain on Polkadot, a layer-one blockchain tethered to the Polkadot ecosystem. Victor Ji, one of Manta’s co-founders, told Cointelegraph that the choice had both a technical and business rationale:

“From the technical side, Polkadot has the faster runtime and faster consensus, and also Polkadot has a quite developed ecosystem compared to others outside Ethereum.”

Nonetheless, Manta would need to entice users to make the switch from the current heavyweights of the DeFi space on Ethereum. While privacy has often been a core concept of blockchain technology, the adoption of privacy coins has been relatively stagnant so far.

Manta would compete with some existing projects, notably Incognito, for the niche of private token swaps. Incognito created wrappers for Uniswap and Kyber, allowing traders to increase their anonymity while accessing existing liquidity pools. Ji said the team is, nevertheless, confident that its solution improves performance and privacy, while some of Manta’s investors like Three Arrows Capital and Alameda Research committed to providing initial liquidity.

Like many other Polkadot-based projects, Manta will need to wait for the upcoming rollout of parachain auctions to grab its spot in the mainnet.