Understanding the economic intent of Ethereum transactions is critical for user safety, yet current tools expose only raw on-chain data or surface-level intent, leading to widespread “blind signing” (approving transactions without understanding them). Through interviews with 16 Web3 users, we find that effective explanations should be structured, risk-aware, and grounded at the token-flow level. Motivated by these findings, we formulate TxSum, a new domain-grounded NLP task for DeFi transaction explanation, and construct a dataset of 187 complex Ethereum transactions with 2,375 token-flow annotations and transaction-level summaries.

We further introduce MATEX, a grounded multi-agent framework for high-stakes transaction explanation. It selectively retrieves external knowledge under uncertainty and audits explanations against raw traces to improve token-flow-level factual consistency. MATEX achieves the strongest overall explanation quality, especially on micro-level factuality and intent quality. It improves user comprehension on complex transactions from 52.9% to 76.5% over the strongest baseline and raises malicious-transaction rejection from 36.0% to 88.0%, while maintaining a low false-rejection rate on benign transactions.

While Large Language Models (LLMs) are trained for factual accuracy, this objective can directly conflict with the critical demand for source fidelity. This paper isolates and formalizes this conflict as Harmful Factuality Hallucination (HFH): a previously overlooked failure mode where an LLM’s attempt to “correct” perceived source errors results in an output that is factually true but unfaithful to the input. Unlike traditional hallucination research focused on models generating falsehoods, we investigate the harm of misplaced correctness. We introduce a reproducible framework to elicit and measure HFH using controlled entity-level perturbations (both soft, embedding-based and hard, instruction-based) paired with strategic entity selection. Across summarization, rephrasing, and QA tasks, our evaluation of diverse LLMs reveals that HFH is a prevalent behavior that worsens with model scale. We identify three underlying mechanisms and demonstrate that a simple instructional prompt can reduce HFH rates by approximately 50%. Our framework turns the abstract factuality–faithfulness tension into a measurable, actionable target for building more reliable LLM systems. Our code is publicly available at https://github.com/ResponsibleAILab/Harmful-Factuality-Hallucination.

Prompt privacy is crucial, especially when using online large language models (LLMs), due to the sensitive information often contained within prompts. While LLMs can enhance prompt privacy through text rewriting, existing methods primarily focus on document-level rewriting, neglecting the rich, multi-granular representations of text. This limitation restricts LLM utilization to specific tasks, overlooking their generalization and in-context learning capabilities, thus hindering practical application. To address this gap, we introduce DP-GTR, a novel three-stage framework that leverages local differential privacy (DP) and the composition theorem via group text rewriting. DP-GTR is the first framework to integrate both document-level and word-level information while exploiting in-context learning to simultaneously improve privacy and utility, effectively bridging local and global DP mechanisms at the individual data point level. Experiments on CommonSense QA and DocVQA demonstrate that DP-GTR outperforms existing approaches, achieving a superior privacy-utility trade-off. Furthermore, our framework is compatible with existing rewriting techniques, serving as a plug-in to enhance privacy protection. Our code is publicly available at anonymous.4open.science for reproducibility.