Changpeng Zhao Eyes New Crypto Venture: A Privacy-Focused DEX

Changpeng Zhao, the founder of Binance, is reportedly considering launching a new cryptocurrency exchange. This time, the focus is on decentralization and enhanced privacy, aiming to address vulnerabilities present in existing platforms.

Zhao’s renewed interest comes after a high-profile incident involving a trader who faced alleged targeting due to their heavily leveraged positions. This situation has highlighted the need for more secure and private trading environments.

While no longer directly involved with Binance, CZ remains active in the crypto space through YZi Labs (formerly Binance Labs). He has expressed interest in investing in this new venture, signaling his commitment to innovation within the industry.

CZ on Market Problems and Potential Solutions

The impetus for Zhao’s comments stems from the recent experience of James Wynn, a trader who made headlines for opening a massive R$ 6.2 billion long position on Bitcoin last month.

Despite initially profiting handsomely from his 40x leveraged bet, Wynn subsequently lost a significant portion of his gains. He claimed to be targeted by other traders seeking to trigger his liquidation due to his substantial exposure.

Wynn was using Hyperliquid, a decentralized exchange (DEX), where details of his trades, including his liquidation price, were publicly visible.

Given his extensive experience building Binance into the world’s largest cryptocurrency exchange, Changpeng Zhao is uniquely positioned to comment on these issues.

Zhao has taken to social media to advocate for a privacy-focused decentralized exchange, equipped with features to protect traders like Wynn from potential exploitation.

“Given recent events, I think now might be a good time for someone to launch a dark pool perp DEX,” Zhao stated.

“I have always been puzzled with the fact that everyone can see your orders in real-time on a DEX. The problem is worse on a perp DEX where there are liquidations. For this reason, large TradFi traders use dark pools, which are often 10 times larger than ‘lit pools’ (i.e., normal order books).”

Zhao believes this approach would mitigate MEV attacks, reduce slippage, improve pricing, and lower costs for traders.

While acknowledging that some traders might prefer order visibility, CZ emphasizes that users should have the option to choose their preferred trading environment.

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

Zhao concludes by inviting developers working on similar ideas to contact him through ReachMe, a platform he funded earlier this year.

Meanwhile, James Wynn continues to trade. At the time of writing, he has another 40x long position open, valued at R$ 560 million, but is currently experiencing significant losses.

Trader James Wynn once profited hundreds of millions trading Bitcoin, but his portfolio is currently US$19 million in the red. Source: Hyperdash.

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