Binance co-founder Changpeng Zhao has put forward the idea of establishing a dark pool perpetual swap decentralized exchange (DEX) as a means to prevent market manipulation. Zhao expressed his surprise that all orders are visible in real-time on traditional DEXs, particularly emphasizing the issue on perpetual DEXs where liquidations can occur. He pointed out that large traders, for example those looking to buy $1 billion worth of a coin, prefer their orders to remain unnoticed until execution to avoid front-running and increased costs. Zhao noted the relevance of dark pools, which are private trading venues that keep large orders hidden until they are executed, in traditional finance where they significantly prevent manipulation. He argued for the importance of privacy in derivatives markets, exposing large traders to potential attacks from coordinated efforts aiming to liquidate them early. While Zhao acknowledged arguments for increased transparency, he pushed for developers to create an on-chain dark pool DEX by perhaps not displaying orderbooks or keeping deposits hidden until later, underscoring the necessity of privacy innovations in trading systems.

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