Binance's CZ calls for the development of a "dark pool" DEX: even a 1 billion dollar Whale will be targeted.

Binance founder CZ suggested developing a "dark pool" DEX to solve the problem of on-chain transaction transparency and improve the privacy and efficiency of large-value transactions, citing zero-knowledge proof (ZKPs) as a key technology. (Synopsis: Binance CZ personally narrates: experience of contact with meme ecology, future ideas for DEX, where is the industry breakthrough point.. (Background added: Hyperliquid's original sin or "centralization"? The on-chain DEX hit the wall problem) Binance founder CZ today (2) released a post, calling on the community to develop a decentralized perpetual contract exchange (DEX) with the characteristics of a "dark pool" (Dark Pool) to solve the current transaction pain points caused by excessive transparency of DEXs , especially for large traders. While the open order book model of the existing DEX improves transparency, it also makes the orders of large traders easy to expose, which may lead to increased slippage, preemptive trading (Front-running) and even malicious liquidation. CZ noted that in a fully transparent market, even huge sums of money can be targeted by joint attacks, saying: "Even if you have a billion dollars, others may join forces against you. For example, the MEV attack "borrows from the "dark pool" model of traditional finance to reduce market shocks for large transactions, and CZ's core recommendation is to build a similar style of DEX on the chain, especially for perpetual contracts. He proposed that such DEXs should not display the order book, or even hide the deposit information of the smart contract through zero-knowledge proof (Zero-Knowledge Proofs, ZKPs) or similar cryptography, until some time after the transaction is completed. CZ said: "Now might be a good time for someone to launch an on-chain dark pool-style decentralized exchange (DEX) + perpetual contract platform. This can be done by not displaying the order book, or even further, by hiding the deposit record in the smart contract, or at least delaying the display. This design should be possible with zero-knowledge proofs (ZK) or similar cryptography." Given recent events, I think now might be a good time for someone to launch a dark pool perp DEX. I have always been puzzled with the fact that everyone can see your orders in real-time on a DEX. The problem is worse on a perp DEX where there are liquidations. Even with a CEX... — CZ BNB (@cz_binance) June 1, 2025 What are the benefits of a dark pool DEX? Zero-knowledge proofs (ZKPs) are seen as a key technical path to achieve an on-chain "dark pool" DEX. The core principle of ZKPs is to prove their authenticity without revealing the information itself, which means that the legitimacy of transactions can be verified without revealing the details of the order, the amount of the transaction, the direction or even the identity of the trader Learn more about ZKPs and privacy technology: What is a zero-knowledge proof? This article explores the potential advantages of the ZK programming language "dark pool" perpetual contract DEX include: Improved trading privacy: It is especially beneficial for institutional and large traders to protect their trading intentions from being debunked by market participants in advance. Reduce market shocks: Hidden orders can effectively avoid trading activities from having a drastic impact on market prices, reducing slippage Reduce trading risk: Since orders are not public, the risk of early trading and MEV (Miner Extractable Value) attacks can be greatly reduced. Enhanced capital efficiency: Expected to integrate advanced trading functions such as unified cross-margin, portfolio margin and other advanced trading functions Potential cost-effectiveness: Combined with Layer 2 scaling solutions or off-chain order matching mechanisms, it may be possible to achieve low gas fees and high transaction throughput. Challenges and the dawn of the market Despite the promising prospects, there are still multiple challenges to implementing "dark pool" DEXs: Technical complexity: Efficient implementation and optimization of ZKPs on the blockchain requires specialized cryptography skills, and the talent that can meet them in reality is extremely scarce Scalability issues: Large-scale adoption of ZKPs can result in significant compute and storage costs, put pressure on blockchain performance, or rely on scaling options such as Layer 2. Regulatory compliance: Privacy enhancements can raise concerns about money laundering and illegal activities, and striking a balance between protecting privacy and complying with regulatory frameworks is critical (e.g., IronFish previously designed with regulatory needs in mind) Initial liquidity: Emerging DEX platforms often face the challenge of illiquidity in their early days and require effective incentives to attract market makers and traders. Despite these challenges, CZ's ascension is surprising, and he has publicly expressed his willingness to communicate with the founders of related projects: If you are building a related project, you can contact me at any time There is no guarantee that I will invest, there is no guarantee that I will reply to you. Related Stories It's time for EVM to quit! Vitalik proposes to switch to RISC-V, ZK proves that the performance can be improved by more than 100 times ZKSync was hacked, "attackers mint 100 million zk tokens"! Hackers get rid of their hands and trigger exchange Bithumb and other emergency takedowns "Binance CZ calls for the development of "dark pool" DEX: even 1 billion magnesium whales will be sniped" This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".