Changpeng Zhao Wants to Hide Your Liquidation Points — Here’s Why

Binance founder Changpeng Zhao is once again stirring innovation in crypto, this time calling for a new kind of decentralized exchange (DEX) that prioritizes privacy for large-scale traders.

In a recent post on X, Zhao proposed the creation of a perpetual futures DEX built around a dark pool mechanism—an idea borrowed from traditional finance where large trades are executed away from public order books to avoid market impact. His argument: open order visibility on blockchain-based platforms puts whales at risk.

Zhao pointed out that the transparency of current DEX infrastructure allows adversaries to target liquidation levels and manipulate markets, particularly in perpetual futures trading. This visibility, he warned, exposes traders to front-running, MEV (Maximum Extractable Value) attacks, and inefficient execution.

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“A dark pool-style DEX would allow institutional players and large holders to operate with discretion,” he suggested, adding that this approach could make DeFi more appealing to serious capital.

To implement such a concept on-chain, Zhao proposed leveraging zero-knowledge proofs (ZK) or similar cryptographic methods to obfuscate transaction details and delay visibility of positions. These tools could help protect sensitive trade data while still adhering to the transparent and decentralized ethos of Web3.

While the idea is still in its infancy, it signals a potential new direction in the evolution of decentralized markets—one where privacy and institutional-grade infrastructure are no longer mutually exclusive.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.