CZ calls on blackpool perp dex to block traders from defi’s forward run

Binance founder Changpeng Zhao (renamed CZ) has proposed the idea of ​​a decentralized exchange (DEX), where order books and user locations are hidden to mitigate the risks of frontal operation and liquidation.

The call is in the midst of a refocus on the maximum extractable value (MEV), the practice of manipulating transaction orders to make a profit.

Dark Pool Argument

On the June 1 X, CZ questioned why DEX continued to disclose user orders in real time, noting that such transparency often leads to predatory strategies such as forward and clearing targets, especially in the permanent futures market.

“For PERP (or futures), it’s more important not to let others know/see your order,” CZ wrote. “If others can see your liquidation point, they can try to drive market liquidation. Even if you get a billion dollars, others can catch you.”

The former cryptocurrency executive is directly similar to traditional finance (Tradfi), where large institutional traders often use what is called a “dark pool”, a private exchange that hides ordering books. He claims that such services are usually “10 times bigger” than regular order books.

To this end, Zhao proposed that chain chain platforms can use zero-knowledge (ZK) encryption technology or similar encryption technology to blur trade data, including orders and deposits, until they are executed. He believes this will create a trading experience that will protect participants (especially whales) from MEV attacks and coordinated manipulation.

CZ’s advice comes after a series of dramatic bets by cryptocurrency trader James Wynn, who has invested more than $1 billion in bets on BTC and then liquidated in four different positions, totaling more than $100 million. After the event, Wynn tweeted that his experience exposed corruption in the cryptocurrency market, and he advised traders to buy and hold BTC instead of using it for high leverage.

Emerging solutions

Several projects jumped on CZ’s posts, announcing that they are actively working in the privacy field. Sam from Tristero revealed that over the past two years, his team has been developing a concept outlined with the former training CEO.

Others like 0x0 and Skale are also dealing with the challenge. 0x0 teases its upcoming Spectre platform, which enables privacy scope and leverages transactions, while Skale recently launched its Bite protocol, a consensus-layer encryption tool designed to eliminate MEV by completely preventing transaction visibility before blocks are finalized. “Bite doesn’t apply band-aids, but instead takes MEV roots,” said Skale CEO Jack O’Holleran.

But not everyone sings in the same hymn. X user Cedric Beau refuted CZ’s proposal, believing that the black pool fundamentally contradicts the spirit of encryption:

“The black pool of cryptocurrencies is exactly what we’re avoiding here,” said the power-centric enthusiast. “The moment you hide the order book, you recreate the insider game.”

He further warned that the “dark tricks” of importing Tradfi could lose Defi’s open core value proposition. “Transparent clutter, but at least everyone is playing in the same field.”