Author: Anish Mohammed, Co-founder of Panther Protocol
The recent suggestion by Binance co-founder Changpeng Zhao (CZ) to create a dark pool perpetual swap decentralized exchange (DEX) is not just a novel idea—it timely reflects the shortcomings of Web3.
In an increasingly institution-driven market, CZ's call for private execution and protection against maximum extractable value (MEV) attacks highlights a deeper truth: the current trading infrastructure in cryptocurrency is not built for scale, prudence, or complexity.
The alleged on-chain manipulation incident involving Hyperliquid starkly illustrates this issue, where nearly $100 million in liquidations were publicly tracked and seemingly targeted. Public blockchains provide equal data access for everyone, but in doing so, they expose large traders to front-running, follow-on trading, and wallet monitoring. In traditional finance, this is precisely the problem that dark pools aim to avoid.
Cryptocurrency has matured. We now have digital assets worth billions of dollars. The user base has expanded from early adopters to include institutional investors, regulated funds, and corporate capital.
However, we still rely on outdated execution models: limited over-the-counter trading desks, aggregators, and inefficient peer-to-peer exchanges prone to slippage. The current infrastructure in this field is not mature enough for institutional investors accustomed to more complex trading execution mediums.
Worse still, there is a persistent exposure threat. Wallets belonging to founders, funds, and whales are often tracked in real-time. Every action, no matter how small or large, can send signals to the market. This level of visibility may attract retail traders eager for market-moving intelligence. But for complex players and large institutions that must enter and exit positions without triggering frenzy, this is a significant deterrent.
The idea of a DEX with hidden liquidity, where orders are invisible before execution, is not new to traditional finance but remains absent in cryptocurrency. CZ proposed building a protocol that uses privacy-enhancing technologies like zero-knowledge proofs or multi-party computation (MPC) to conceal trading mechanisms before transactions are completed. The intent is clear: to guard against MEV bots, reduce manipulation, and create a safe space for large trades.
Privacy comes with trade-offs. Complete opacity could open the door to undisclosed manipulation. If the dark pool structure reduces market transparency, regulators and some users may oppose it. The challenge will be to balance the need for prudence with accountability requirements.
Whether CZ's idea takes shape or not, his call itself is a signal.
The demand for infrastructure that supports private, large-scale cryptocurrency trading without relying on centralized intermediaries or outdated tools is growing. This is not just about protecting trades; it is about achieving scale, building exit mechanisms, and reducing friction for serious market participants.
As Web3 matures, the assumptions we've operated under for the past decade must evolve. The concept that every transaction must be public by default may appeal to ideological purists, but it no longer fits the reality of a growing, capital-intensive industry.
CZ's call for a dark pool DEX is not just a reaction to an event; it is a diagnosis of systemic need.
If cryptocurrency is to attract serious capital, it must provide serious infrastructure. This means executing privacy, intelligent safeguards, and a clear distinction between transparency and exposure. Web3 has finally grown up. Now, its tools need to do the same.
Author: Anish Mohammed, Co-founder of Panther Protocol.
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This article is for general informational purposes only and is not intended as legal or investment advice. The views, thoughts, and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Original: “CZ is right: There is a structural gap in Web3 trading”
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