front-running prevention techniques Archives - Coin Engineer https://coinengineer.net/blog/tag/front-running-prevention-techniques/ Btc, Coins, Pre-Sale, DeFi, NFT Mon, 02 Jun 2025 12:17:57 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.4 https://coinengineer.net/blog/wp-content/uploads/2024/04/cropped-Coin-Engineer-Logo-Favicon-2-32x32.png front-running prevention techniques Archives - Coin Engineer https://coinengineer.net/blog/tag/front-running-prevention-techniques/ 32 32 Binance Co-Founder’s CZ Dark Pool Move to Crush Manipulation!  https://coinengineer.net/blog/binance-dark-pool-dex-market-manipulation/ https://coinengineer.net/blog/binance-dark-pool-dex-market-manipulation/#respond Mon, 02 Jun 2025 13:00:36 +0000 https://coinengineer.net/blog/?p=43634 Changpeng “CZ” Zhao, co-founder of Binance, proposed establishing a decentralized exchange (DEX) with continuous swaps and dark pools to protect large investors from front-running and MEV attacks. Zhao stated that most market manipulations occur through public order books. “It always surprised me that everyone can see your orders in real-time on a DEX,” he said.

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]]> Changpeng “CZ” Zhao, co-founder of Binance, proposed establishing a decentralized exchange (DEX) with continuous swaps and dark pools to protect large investors from front-running and MEV attacks. Zhao stated that most market manipulations occur through public order books. “It always surprised me that everyone can see your orders in real-time on a DEX,” he said. For example, when buying a $1 billion coin, the order needs to remain hidden until completed. This prevents attacks by MEV bots. 

Binance Zhao emphasized that DEXs with liquidations are in an even worse situation. 

“If others can see your liquidation point, they might gang up and try to force your liquidation. Even with $1 billion, others can form a cartel against you.” 

Hence, privacy is crucial. Zhao added, “Using zk-SNARK or zk-STARK to execute transactions without revealing details and verify outcomes is a concrete approach.” 

Recently, trader James Wynn’s $100 million Bitcoin long position was liquidated on Hyperliquid after Bitcoin fell below $105,000. This event raised liquidation hunting allegations. A user on X claimed Tron founder Justin Sun showed interest, though unconfirmed. The user even suggested inviting Eric Trump, son of former US President Donald Trump, to the group. 

Binance CZ Privacy for Derivatives Trading 

Binance CZ explained that large investors in traditional finance use dark pools where order size and price remain hidden to prevent market manipulation. Dark pools are private, non-public trading venues. However, creating decentralized dark pools is complex. Zero-knowledge proofs and delayed settlement mechanisms are examples. 

Zhao acknowledged some prefer transparency to absorb large orders easily. 

“I won’t debate what’s right or wrong. Different traders prefer different market types,” he said. 

He encouraged developers to launch on-chain dark pool DEXs with continuous swaps. This can be achieved “either by not showing the order book or, better yet, by not revealing deposits to smart contracts until much later.” 

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