Binance founder suggests the creation of a new exchange focused on privacy

To understand the comments of the Binance founder, it is necessary to revisit the recent history of James Wynn, a trader who claimed to be pursued by other investors.#DGENLiveOnAlpha

Changpeng Zhao, founder of Binance, is interested in creating a new cryptocurrency exchange, this time decentralized and with greater privacy than those already existing in the market.

His comments come after a trader, who was trading with extreme leverage, said he was being pursued by other investors in order to liquidate him.#Binance

Although he is no longer with Binance, CZ continues to work in the cryptocurrency market through YZi Labs (formerly Binance Labs). On social media, the billionaire even showed interest in investing in this idea.#EDGENLiveOnAlpha

CZ from Binance talks about market problems and solutions

To understand the comments of the Binance founder, it is necessary to revisit the recent history of James Wynn, a trader who opened a long position of R$ 6.2 billion in Bitcoin last month.

Although he was making millions with his bet (he was leveraged at 40x), the investor returned half a billion reais to the market in the following days. At that time, Wynn said he was being pursued by other players trying to liquidate him due to his high exposure.

The trader was using a decentralized exchange, Hyperliquid, and everyone could follow the details of his trades, including the liquidation price.

As Binance has been the largest cryptocurrency exchange in the world for years, no one is better to talk about the subject than Changpeng Zhao, its founder.

On social media, CZ spoke about the need for a decentralized exchange focused on privacy, with features that would protect traders like Wynn from potential pursuit.

"Given recent events, I think now might be a good time for someone to launch a DEX [decentralized exchange] for perpetuals with dark pool."

"I have always found it curious that, in a DEX, everyone can see your orders in real time. The problem is even worse in a DEX for perpetuals, where there are liquidations," Zhao continued. "For that reason, large traders in TradFi use dark pools, which are often 10 times larger than the 'lit pools' (i.e., normal order books)."

The founder of Binance highlights that this solution would mitigate MEV attacks, have lower slippage, better prices, and cost reductions for traders.

Open to debates, CZ notes that some traders prefer others to see their orders in order to attack them. However, he points out that each one could choose which market they want to operate in.

"For perpetuals (or futures), it is even more important that others do not see your orders. If others can see your liquidation point, they may try to push the market to liquidate you. Even if you have a billion dollars, others can unite against you. This is possibly what we have seen recently."

In concluding his text, Zhao asks developers who are working on a similar idea to contact him through ReachMe, a platform funded by him earlier this year.

Regarding James Wynn, the trader continues to take risks. At the time of this writing, he has another long position opened at 40x, worth R$ 560 million, but is accumulating large losses.