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Binance’s CZ: Time for a Privacy-Focused Perpetual DEX?

BBG News

In a moment of sheer enlightenment (or perhaps a Sunday morning caffeine surge), Binance’s founder, Changpeng Zhao (CZ), pondered publicly about something he’s been wrangling with for ages: “Why on earth can anyone see your orders in real-time on a decentralized exchange (DEX)?” This, apparently, has been bugging him for years. But why should we care, right? Well, if you’re a whale, or anyone else with a serious stash to lose, you might want to pay attention.

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

Ah yes, the classic problem of front-running and those lovely Miner Extractable Value (MEV) attacks. CZ thinks they make slippage as inevitable as your phone running out of battery at the worst possible time. The result? Worse prices and higher costs, making trading feel like swimming with sharks—if those sharks were also trying to pick your pocket while you’re treading water.

And because CZ likes to mix metaphors with the finesse of a high schooler trying to impress their English teacher, he’s got this to say about TradFi’s “dark pools” (you know, those secretive little corners where big money men go to do their big money things): “TradFi bigwigs use dark pools that are 10 times larger than the normal order books.” So yeah, it seems this whole privacy thing is *not* just for the paranoid or the conspiring-but-still-trying-to-be-cool crowd. It’s a big deal for the big players.

And then, just when you thought it couldn’t get more thrilling, CZ drops this gem: perpetual contracts. If everyone can see your liquidation point, then good luck not being liquidated by a small army of market manipulators. Even if you’re sitting on a pile of cash the size of a small country, they’ll gang up on you like a group of middle schoolers over a forgotten lunch. Trust us, you don’t want that kind of drama in your life.

But here’s the kicker—CZ’s taking a “let’s not argue” approach. Some folks might think transparency is great for market makers, while others think it’s a disaster waiting to happen. Honestly, who’s right? It’s all about what *you* prefer, apparently. If you like risking your fortunes in the open, good for you. If you’d rather not have your life savings broadcast to the world, well, CZ has some thoughts.

He proposes a novel solution to this little mess: a dark pool DEX combined with the wonders of zero-knowledge (ZK) encryption. Essentially, it’s like saying, “Hey, let’s keep everything secret, but also trustless.” Could it work? In CZ’s words, “Now might be a good opportunity for someone to launch an on-chain dark pool style DEX + perps,” and frankly, it sounds as though he’s just waiting for someone to steal his idea.

Why it matters

At this very moment, transparency on DEXs is both a blessing and a curse. Sure, open order books are great for decentralization (if you like everyone knowing your business), but they’re a nightmare for anyone big enough to have a target on their back. What CZ is proposing could be the perfect blend of privacy and trustlessness, just with a sprinkle of some snazzy zero-knowledge magic.

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2025-06-02 09:45

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