Write a personal understanding of the dark pool before going to bed On-chain transactions have always been proud of being "open and transparent". Wallet addresses can be checked, contract data can be traced, and maker order records are made public in real time - it sounds fair and "decentralised". But here's the truth: being too transparent is also a risk. You just place an order, and the MEV bot has circled you; As soon as you increase the leverage, the liquidation price becomes someone else's hunting target. In this on-chain world of voyeurs and snipers, the Dark Pool suddenly becomes justified, even – somewhat necessary. Especially on the chain, the more transparent the transaction, the easier it is to be "targeted" 1⃣ What is a dark pool? The term "dark pool" comes from traditional finance (TradFi). To put it simply, it is a non-public order book trading method that is often used by institutions to process large orders. The purpose is clear: Don't influence the market price, and don't be seen what we're doing. A $50 million buy order, if it is listed on the open market, may cause the market to raise the price in advance, causing them to buy expensive. But if it is done in the dark pool, it will be able to "get the goods silently". 2⃣ Blockchain, why do you need dark pools? Originally, the spiritual totem of the crypto world was "transparency and openness". But now, here's the question: Transactions on the blockchain are not only public, but also open in advance (because transactions go to the mempool first, and then go on-chain) MEV bots, arbitrage scripts, liquidation hunters – the so-called big guys are all thriving in this mechanic Retail investors place orders, large accounts operate, all go through the process on the bright side In a way, this is not "fairness", but "redistribution of information superiority". As a result, the on-chain world has also begun to experiment with various dark pool mechanisms: @flashbots_x mempool to prevent front-loading attacks @CoWSwap: Use off-chain quotes to avoid order leakage Railgun / Panther: Uses privacy technology to hide the parties and amounts of the transaction Even CZ himself publicly said: "The perpetual contract DEX on the chain should have a dark pool mechanism, otherwise if you have another $1 billion, you will also be jointly liquidated." " 3⃣ For exchanges, dark pools are the new moat After the liquidity war entered the deep waters, the major trading platforms are thinking about a question: What other unique value can we provide to professional traders and institutional users? Dark pools have become one of the answers. Large investors can execute transactions without alarming the market, and the counterparties may be project parties, market makers, and other institutions. The system realises price matching, and only the final transaction is recorded on the chain. If you think about it, whoever can provide a "more private and efficient" trading environment will get higher quality traders. Is the dark pool a blessing or a curse for retail investors? It can only be said that this problem is not so simple, and there are benefits as well as risks. Put simply, less transparency is more secure, but trust can also be harder to establish. In short, we think that decentralisation is as transparent as possible, but as I think now, sometimes a little bit of opacity can protect me. Maybe the on-chain world of the future will be half trading in the sun and half running in the shadows~ GN