Zhao’s Dark Pool DEX Could Challenge HyperLiquid’s Dominance, Says Top Trader

A potential shake-up is looming in the world of decentralized exchanges, as prominent trader James Wynn warns that a new dark pool perpetuals DEX proposed by Binance founder Changpeng “CZ” Zhao could pose a serious threat to HyperLiquid’s position in the market.

Wynn, who has been publicly critical of HyperLiquid’s business model, believes Zhao’s concept—backed by deep resources and a proven track record—could fundamentally change how on-chain derivatives are traded. According to Wynn, the proposed platform’s focus on addressing front-running and Miner Extractable Value (MEV) exploitation gives it a major edge over current systems, including HyperLiquid’s open order book model.

“I have always been puzzled with the fact that everyone can see your orders in real-time on a DEX.” Zhao recently posted on social media.

He outlined a vision for a dark pool-style exchange that would mask order flow until trades are executed. The idea is to protect large traders from being front-run by bots or malicious actors exploiting the transparency of on-chain order books—a common pain point in the decentralized trading world.

Zhao suggested that leveraging zero-knowledge proofs or similar cryptographic tools could allow his exchange to maintain on-chain settlement while hiding trading intentions. This hybrid approach could offer the best of both worlds: the transparency and security of blockchain with the privacy and efficiency of traditional finance’s dark pools.

Wynn’s critique of HyperLiquid goes beyond technical comparisons. He’s also taken issue with the platform’s referral and compensation policies. Despite generating considerable trading volume and user signups, Wynn says he earned only $34,000 from HyperLiquid’s referral program, which he described as “extremely poor.” He claims to have approached the team twice with partnership proposals, but was turned down—reportedly because the exchange avoids individual promoter deals.

This friction appears to have fueled Wynn’s skepticism about HyperLiquid’s long-term competitiveness. “CZ has the money, network, and teams to build something like no other,” he said, pointing to Binance’s global dominance as proof of Zhao’s execution ability.

HyperLiquid, for its part, operates with full transparency—running a decentralized perpetuals exchange that makes every order visible on-chain. While this model offers openness and auditability, it also exposes traders to MEV risks, a vulnerability Zhao’s concept aims to fix.