Aster Chain Aims to Disrupt DeFi Derivatives with Privacy-Focused L1

Key Takeaways

• Aster CEO confirms the privacy-focused Layer-1 blockchain is in testing.
• The chain uses zero-knowledge proofs for verifiable yet private trades.
• Aster is evolving from a multichain DEX into a Hyperliquid competitor.
• This new chain could shake up the decentralized derivatives landscape.

Aster CEO Leonard Aster has announced that the company's highly anticipated privacy-focused Layer-1 blockchain, Aster Chain, is now undergoing internal testing and will soon be available publicly.

This new blockchain seeks to resolve critical issues in decentralized finance (DeFi), specifically within derivatives trading, where transparency, custody, and execution speed often conflict with the necessity of user privacy.

Building a Privacy Layer for DeFi

Aster Chain utilizes zero-knowledge proofs (ZK-proofs) to allow on-chain trade verification without exposing sensitive information such as order sizes or profits and losses.

"We are internally testing it," Aster stated in a recent interview. "But the way we designed it, we want to preserve trade privacy while ensuring trade verifiability. So you can verify the trade happening, but others can’t see the key details."

This approach aims to mitigate market manipulation and front-running, which are common concerns for institutional and high-volume traders in DeFi.

Aster's Evolution: From Multichain DEX to L1 Blockchain

Initially launched as a multichain liquidity aggregator, Aster DEX connected to several prominent blockchains including BNB Chain, Ethereum, Solana, and Arbitrum. The project's ambitions have since expanded to include a dedicated Layer-1 chain.

This shift reflects a broader trend where derivatives are now dominating crypto trading volumes. Perpetual futures and tokenized assets are increasingly moving on-chain. Aster aims to establish a presence in this market by creating a chain optimized for these applications, challenging existing leaders like Hyperliquid.

Potential Hyperliquid Rival

Unlike Hyperliquid's emphasis on transparency and speed, Aster Chain prioritizes privacy and compliance. Its verifiable but non-public trades target institutional investors who require anonymity.

The project has already garnered backing from YZi Labs (formerly Binance Labs), PancakeSwap, and public support from Binance co-founder Changpeng Zhao (CZ), which have fueled its growth.

If successful, Aster Chain could capture a portion of the multi-trillion dollar derivatives market, becoming one of the first Layer-1 blockchains specifically built for on-chain perpetuals with institutional-grade privacy.