TechFlow news, on June 2, CZ stated on X platform that given recent events, now might be a good time to launch a dark pool perp DEX.
I've always been puzzled by the fact that on DEXs everyone can see your order in real time. This issue becomes even more serious on perpetual DEXs where liquidations exist.
Even with centralized exchange (CEX) order books, although orders aren't linked to specific individuals, if you want to buy a billion dollars' worth of cryptocurrency, you usually don't want others to notice your order before it's completed. Otherwise, others might buy ahead, effectively front-running you. On decentralized exchanges (DEX), this could lead to MEV attacks, resulting in increased slippage, price drops, and higher costs for you.
Therefore, large traders in TradFi use dark pools, which are typically 10 times larger in scale than "lit pools" (i.e., normal order books).
For holders (or futures traders), it's even more important not to let others know/see your orders. If others see your liquidation point, they might try to push the market to liquidate you. Even if you have one billion dollars, others might gang up against you. This may be what we've recently seen.
The counterargument I've seen is that greater transparency allows market makers to absorb your large orders. That might be true. I don't want to argue about who's right or wrong. Different traders may prefer different types of markets. Now might be a good time to launch an on-chain dark pool-style DEX with perpetual contracts—either not displaying the order book, or better yet, not revealing deposits in smart contracts at all, or only revealing them much later. This should be achievable through zero-knowledge proofs or similar cryptographic techniques.
