Vitalik Buterin (@vitalik.eth): [Farcast] One fascinating thing about the @0xprivacypools approach to privacy is that it actually is fully compatible with policing insider trading of…

[Farcast] One fascinating thing about the @0xprivacypools approach to privacy is that it actually is fully compatible with policing insider trading of this type, even if trading is anonymous (!!) The basic idea is that ASPs would be able to blacklist the coins that came out of the trade, and so anyone who wants access to the largest anonymity sets would have to prove that their coins came from somewhere other than that trade. The trader themselves would not be able to make such a proof, and so they would only be able to mix with others that use an allow-everyone anonymity set. This would be a much smaller set, and it seems to me quite likely that it would be able to handle thousands and maybe hundreds of thousands of dollars if you're careful, but definitely not $88 million. For lawyers, you can think of this as an "in rem" ( https://en.wikipedia.org/wiki/In_rem_jurisdiction ) approach to dealing with the problem: instead of starting from the question "who did it?", start from the question "which are the coins that are connected to the problem?" Thanks to the magic of ZK, you can boycott coins without even needing to know anything about the people who control them. Furthermore, if defi protocols are adding more privacy, it seems likely in their interest to include such a mechanism. For a market maker, your primary cost is "toxic order flow": orders from sellers that are exploiting you because they have an information advantage. And so as a platform, you want to make things harder for insider traders. https://x.com/Vivek4real_/status/1976787212491801051