• CZ proposes an on-chain dark pool perpetual DEX for privacy. 

  • Real-time DEX orders lead to front-running and MEV attacks. 

  • Zero-knowledge proofs can hide orders and deposits securely. 

  • The timing is ideal for launching a privacy-focused DEX. 

  • The proposal aims to protect large traders in DeFi markets

Binance founder Changpeng Zhao, known as CZ, has proposed the creation of an on-chain dark pool perpetual DEX to address privacy issues in decentralized finance trading. The statement was made on June 1, 2025, through a post on X, sparking discussions in the crypto community.

CZ highlighted vulnerabilities in current decentralized exchanges, noting that real-time visibility of orders exposes traders to risks. He stated that the transparency in DEXs allows malicious actors to exploit large trades, leading to front-running and MEV attacks.

The proposal comes amid growing concerns over market manipulation in DeFi, particularly in perpetual futures trading. CZ emphasized that the problem intensifies on perpetual DEXs, where liquidation points are publicly visible, making traders targets for coordinated attacks.

Addressing Privacy with Zero-Knowledge Tech

CZ suggested that an on-chain dark pool perpetual DEX could mitigate these issues by concealing orders and deposits. He pointed to zero-knowledge proofs as a potential solution to ensure privacy while maintaining the decentralized nature of the platform.

Zero-knowledge proofs, a cryptographic method, allow transactions to be verified without revealing sensitive details. This technology could hide order books and smart contract deposits, reducing the risk of manipulation. CZ noted that such a setup would provide better security for large-scale traders.

Developers on platforms like Solana are already exploring similar concepts, with private DEXs gaining traction in DeFi ecosystems. For more on zero-knowledge technology, visit CoinDesk's guide.

A Timely Opportunity for DeFi Innovation

CZ believes the current market environment presents a unique opportunity for developers to build privacy-focused infrastructure. He stated that the timing is ideal for launching a dark pool perpetual DEX to cater to institutional and high-volume traders.

The proposal aligns with the growing demand for privacy in DeFi, as transparency in traditional DEXs often leaves traders vulnerable. A dark pool DEX could combine the trustless nature of DeFi with the privacy features of traditional finance, potentially reshaping the industry.

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