Changpeng Zhao, co-founder of Binance, has initiated the creation of a decentralized exchange (DEX) with a dark pool—a platform where users’ orders and positions are hidden from public access. According to him, this approach will effectively protect traders from MEV attacks and market manipulation, which have become prevalent on modern platforms.
This is reported by Business • Media
Why a Dark Pool is Needed: CZ and Experts’ Opinions
In his statement on X (formerly Twitter), Zhao emphasized that full transparency of orders, especially on perp DEX, creates additional pressure on the market. Large traders are at risk as their liquidation points can be tracked and used for price manipulation. To address this issue, CZ proposes implementing zero-knowledge proofs and other encryption methods that will completely conceal user activity until settlement, ensuring a new level of privacy and optimizing costs.
“If others see your liquidation point, they can try to push the market to your liquidation. Even if you have a billion dollars, others can band together against you,” said CZ.
Zhao’s idea has been supported by several experts in the fields of privacy and DeFi. Chief Technology Officer of Komodo Platform Kadan Stadelmann emphasized that launching such an exchange would be an important step toward institutional DeFi infrastructure, highlighting the need for complete decentralization and the implementation of atomic swaps. Head of the global ecosystem at Avail, Anna Shekhavat, also noted that excessive transparency makes DEX vulnerable to MEV bots, and the new model could set a standard for private DeFi protocols.
Context and Next Steps
Changpeng Zhao invited all interested developers to join the project through the secure platform ReachMe.io. His call came against the backdrop of massive liquidations involving trader James Wynn, who lost nearly $100 million due to the price of Bitcoin falling below $105,000. Such situations, according to experts, highlight the need for new protective mechanisms for market participants.