The characteristic goals to guard merchants from on-chain visibility dangers, comparable to frontrunning and MEV assaults
Aster, a perpetuals decentralized trade (perp DEX), has launched a “hidden orders” privateness characteristic lower than three weeks after Binance co-founder Changpeng “CZ” Zhao proposed the concept of “dark pool” perpetuals buying and selling.
In conventional finance (TradFi), darkish swimming pools are personal platforms that enable establishments to hold out giant trades with out revealing their orders to the market. DEXs, in contrast, have traditionally prioritized transparency, with order and liquidity knowledge seen on-chain.
Aster, which boasts a complete worth locked (TVL) of $290 million, unveiled the hidden order mechanism on Friday in a submit on X, previously Twitter. Hidden orders are specialised order sorts that enable merchants to hide their order amount from different market members.
“Be the first to place stealth perp orders without revealing your size or presence in the public order book,” Aster’s tweet reads. “Invisible orders, visible advantage.”
The submit was then retweeted by CZ. “This Hidden Order feature went live on @Aster_DEX 18 days after my post,” the Binance co-founder mentioned. In the identical submit, Zhao revealed greater than 30 initiatives have since approached him with comparable concepts.
The rollout of such options underscores a rising curiosity in defending merchants from on-chain visibility dangers, comparable to frontrunning and Maximal Extractable Worth (MEV) assaults. The event may additionally sign a broader shift towards privacy-first infrastructure inside decentralized finance (DeFi).
“There’s growing demand in DeFi for dark pool mechanics, especially from funds and traders seeking to avoid MEV, sandwiching, and toxic flow exposure,” said Vinson Leow, the CSO at Momentum.
However, Leow pointed out that while features like Aster’s hidden orders are “a step forward,” the tradeoff is that it’s limiting transparency. He called this critical for price discovery and trustless composability. “Dark pools will need to integrate selective disclosure and maintain auditability without revealing [live] trade intent in order to scale,” he said.
Luis Bezzenberger, the Head of Product at Shutter Network, echoed this sentiment, stating that while short-term privacy is beneficial, if orders stay hidden too long, it could damage market transparency and efficiency. “An interesting direction could be threshold-FHE (fully homomorphic encryption) on top of threshold cryptography, letting us balance privacy with fair, verifiable settlement,” he suggested.
Zhao originally proposed the idea on June 2 in response to the broadly publicized losses of pseudonymous dealer James Wynn, who publicly shared his $1.2 billion BTC lengthy place on Hyperliquid. Wynn later claimed that this public disclosure made him a goal, resulting in efforts to liquidate his place and leading to roughly $17.5 million in losses. ”The one cause value has gone down is as a result of they’re searching me,” he mentioned in a tweet that week.
“For perps (or futures), it is even more important to not let others know/see your orders,” CZ mentioned on the time. “If others can see your liquidation point, they could try to push the market to liquidate you. Even if you got a billion dollars, others can gang up on you. This was possibly what we have seen recently.”
