CZ Suggests Launching a Dark Pool-Style Perpetual DEX Amid Market Concerns
Binance founder Zhao Changpeng (CZ) has proposed a new direction for decentralized trading platforms in response to recent market events. In a post on X (formerly Twitter), CZ suggested that now may be the right time to launch a dark pool-style perpetual decentralized exchange (DEX) — a platform where traders can operate with increased privacy and reduced market manipulation risk.
“Given the recent events, now might be a good time to launch a dark pool-style perpetual DEX,” CZ wrote. “I’ve always found it strange that on DEXs, everyone can see your orders in real time — and for perpetual DEXs, the issue is even more critical due to liquidation risks.”
The Problem with Transparency in DeFi
CZ highlighted a key vulnerability in current decentralized exchanges: full transaction visibility. While transparency is a core principle of blockchain, it also exposes traders — particularly large players — to front-running, MEV (Maximal Extractable Value) attacks, slippage, and unfavorable price execution.
He drew parallels to traditional finance, where dark pools are used by institutional traders to discreetly execute large orders without revealing their positions. These private markets can often handle volumes 10 times larger than public order books.
“In centralized exchanges, individual orders aren’t typically tied to specific users. But if you’re planning to buy $1 billion worth of a token, you generally don’t want others to find out before the trade is complete,” CZ explained. “On a DEX, not only can others front-run you — in perpetual markets, they might even target your liquidation point to manipulate the market against you.”
A Call for Privacy-Preserving On-Chain Infrastructure
To address this, CZ proposed building an on-chain platform that combines the functionality of a perpetual DEX with dark pool features. This would likely involve hiding the order book and potentially obfuscating asset deposit data for a set period — protecting traders from malicious actors and market manipulation.
He noted that such a system could leverage zero-knowledge proofs (ZKPs) or other advanced cryptographic technologies to maintain privacy without compromising the decentralized nature of the platform.
Industry Implications
CZ’s suggestion comes at a time when concerns around MEV, transparency, and market manipulation are gaining traction in the DeFi community. A dark pool-style DEX could introduce a new layer of sophistication and institutional appeal to the space — but it also raises questions about transparency, trust, and regulatory alignment.
As on-chain trading continues to mature, CZ’s idea may spark broader discussions about how to balance privacy and openness in decentralized finance.
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