The post CZ Calls for Dark Pool Perp DEX to Shield Traders from Front-Running in DeFi appeared on BitcoinEthereumNews.com.

Binance founder Changpeng Zhao, better known as CZ, has floated the idea of a decentralized exchange (DEX) where order books and user positions are hidden to mitigate front-running and liquidation risks. The call comes amid renewed attention to Maximal Extractable Value (MEV), the practice of manipulating transaction ordering for profit. The Dark Pool Argument In a June 1 post on X, CZ questioned why DEXs continue to expose user orders in real-time, noting that such transparency often invites predatory tactics like front-running and liquidation targeting, particularly in the perpetual futures markets. “For perps (or futures), it is even more important to not let others know/see your orders,” CZ wrote. “If others can see your liquidation point, they could try to push the market to liquidate you. Even if you got a billion dollars, others can gang up on you.” The former crypto executive drew a direct parallel to traditional finance (TradFi), where large institutional traders routinely use so-called “dark pools,” private exchanges that hide order books. He claimed such services are often “10 times bigger” than normal order books. To that end, Zhao proposed that on-chain platforms could use zero-knowledge (ZK) cryptography or similar encryption technologies to obscure trade data, including orders and deposits, until they are executed. In his opinion, this would create a trading experience that shields participants, especially whales, from MEV attacks and coordinated manipulation. CZ’s suggestion comes after a series of dramatic bets by crypto trader James Wynn, who staked over $1 billion on BTC before being liquidated across four different positions, totaling more than $100 million. Following the event, Wynn tweeted that his experience had exposed the corruption in the crypto market, and he advised traders to buy and hold BTC instead of using it for high leverage. Emerging Solutions Several projects jumped on CZ’s…

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Filed under: News - @ June 2, 2025 10:26 pm