The Binance co-founder’s proposal comes a week after Hyperliquid trader James Wynn’s public positions were supposedly targeted.
Binance co-founder Changpeng (“CZ”) Zhao floated the idea of a “dark pool” decentralized perpetuals exchange (perp DEX) on Monday, aimed at protecting traders from on-chain visibility risks.
“Given recent events, I think now might be a good time for someone to launch a dark pool perp DEX,” CZ wrote on X (formerly Twitter). “I’ve always been puzzled by the fact that everyone can see your orders in real-time on a DEX.”
CZ pointed out that this level of transparency can lead to frontrunning and MEV (Maximal Extractable Value) attacks. “This results in increased slippage, worse prices, and higher costs for you,” the post reads. For this reason, he noted, large traders in traditional finance (TradFi) typically employ dark pools – which CZ said are often “10 times bigger” than the ‘lit pools’.
Dark pools are private exchanges or forums for trading securities that are not accessible to the general investing public. They are used primarily by institutional investors to buy or sell large blocks of securities without revealing their intentions to the broader market.
The proposal for more discreet trading platforms comes about a week after pseudonymous trader James Wynn began drawing attention for publicly revealing his billion-dollar leveraged positions on perp DEX Hyperliquid.
“For perps (or futures), it is even more important to not let others know/see your orders,” CZ continued. “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. This was possibly what we have seen recently.”
According to blockchain analyst Lookonchain, Wynn was “brutally hunted.” Wynn himself seemed to agree, stating on X that “the only reason price has gone down is because they are hunting me.”
Wynn also revealed on X earlier today that he ended up losing around $17.5 million this past week. “It’s been a fun ride. Approx $4m into $100m and then back down to a total account loss of $17,500,000,” Wynn said in his post. “The time has come for me to return to where I came from. The place that helped carve me into the gigantic degenerate I am today.”
Despite the whopping losses, Wynn is back in the order books with a $99 million BTC long position, down another $1 million at the time of writing.
At his peak last week, Wynn held a $1.2 billion long position in Bitcoin (BTC) and was up as much as $87 million.
Meanwhile, CZ encouraged builders to explore the idea of a privacy-preserving perp DEX. “This should be doable with ZK or similar encryptions,” he wrote. “Just a Sunday idea… If you are building such a project, feel free to reach me.”
