The Ethereum Foundation emphasizes that privacy must be treated as a social contract to unlock its inherent network effects and notes that, although often overlooked in DeFi, privacy is essential for protecting users from digital surveillance, such as front-running, sandwiching and targeted phishing and from physical threats

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Privacy is particularly important to get right. As A Cypherpunk’s Manifesto points out, “for privacy to be widespread it must be part of a social contract”. Privacy has inherent network effects, and yet it has received very little attention so far.

Privacy is historically neglected in the broader DeFi space, but it remains essential. Privacy protects market participants from both digital surveillance (e.g., front running, sandwiching, liquidation sniping, targeted phishing, profiling and data-based coercion) and physical threats