There Is A Structural Gap In Web3 Trading

Opinion by: Anish Mohammed, co-founder of Panther Protocol

Binance co-founder Changpeng “CZ” Zhao’s recent proposal to create a dark-pool perpetual swap decentralized exchange (DEX) is more than just a novel idea — it’s a timely reflection of where Web3 is falling short. 

In a market increasingly driven by institutions and large stakeholders, CZ’s call for private execution and protection from maximal extractable value (MEV) attacks underscores a more profound truth: The current trading infrastructure in crypto is not built for scale, discretion or sophistication.

The alleged onchain manipulation of Hyperliquid, where a nearly $100-million liquidation was publicly traced and seemingly targeted, put the issue in sharp relief.

Public blockchains give everyone equal access to data, but in doing so, they also expose high-volume traders to front-running, copy-trading and wallet surveillance. In traditional finance, that’s precisely what dark pools were built to avoid.

The mismatch between market maturity and infrastructure

Crypto has grown up. We now have digital assets consistently valued in the billion-dollar range. The user base has expanded beyond early adopters to include institutional investors, regulated funds and corporate treasuries.

Yet we still rely on outdated execution models: over-the-counter desks with limited scope, aggregators and peer-to-peer swaps prone to slippage and inefficiency. The current infrastructure in the space is not mature enough for institutional investors, who are accustomed to more sophisticated mediums for executing deals and trades. 

Even worse, there’s the constant threat of exposure. Wallets belonging to founders, funds and whales are often tracked in real time. Every movement can send signals to the market, no matter how small or large. That level of visibility may appeal to retail traders hungry for intel on market movements. Still, it’s a significant deterrent for sophisticated players and large institutions that must enter and exit positions without sparking a frenzy.

CZ’s dark pool DEX

The idea of a DEX with hidden liquidity, where orders are not visible until after execution, isn’t new to traditional finance, but it’s still missing in crypto. CZ proposes building a protocol that uses privacy-enhancing technology like zero-knowledge proofs or multiparty computation (MPC) to conceal the mechanics of trades until they’re finalized. The intent is clear: protect against MEV bots, reduce manipulation and create a safe space for high-volume trades.

Related: Here’s how to tackle DeFi fragmentation through unified liquidity

With privacy comes trade-offs. Full opacity could open the door to undisclosed manipulation. Regulators and some users may push back if dark pool structures reduce market transparency. The challenge will be balancing the need for discretion with the demand for accountability.

The broader market signal

Whether CZ’s idea takes shape or not, his call itself is a signal. 

There is a growing demand for infrastructure that supports private, large-scale crypto transactions without relying on centralized intermediaries or outdated tools. It’s not just about shielding trades; it’s about enabling scale, building exits and reducing friction for serious market participants.

As Web3 matures, the assumptions we’ve operated on for the past decade must evolve. The notion that every transaction must be public by default may appeal to ideological purists, but it no longer fits the realities of a growing, capital-intensive industry.

CZ’s call for a dark pool DEX isn’t just a reaction to one event; it’s a diagnosis of a systemic need. 

If crypto is to attract serious capital, it must provide serious infrastructure. That means execution privacy, intelligent safeguards and a clear distinction between transparency and exposure. Web3 is finally growing up. Now, its tools need to do the same.

Opinion by: Anish Mohammed, co-founder of Panther Protocol.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.