Key Points:
Dark pool trading has long existed in traditional finance. In traditional exchanges, information on large orders will be collected by high-frequency trading companies (High-frequency trading – HFT) is a strategy that executes transactions through programmed algorithms.
In simple terms, it is to provide extremely high liquidity in the market and collect toll fees from providing liquidity) to detect or detect, and then high-frequency trading companies will rely on special order types or hardware/software superior to large institutions/banks to buy and sell positions first, and finally sell them to large institutional traders for profits, while large institutional traders face losses.
In order to protect large institutional traders from being “handed down” by high-frequency trading companies (HFT), dark pools have continued to develop, and dark pool transactions have accounted for nearly one-third of the total trading volume of the US stock market.
In dark pool transactions, buyers and sellers are paired anonymously to carry out large transactions. This kind of transaction operation is opaque, and the identity of bid and offer prices and quotes will not be displayed, so trading strategies and positions will not be made public, and executed transactions will not be disclosed to the public details, which is very beneficial to institutional investors.
Advantages of dark pool trading
Due to the above-mentioned advantages of dark pools, and with the continuous development of the encryption market, the proportion of institutional investors and high net encryption asset holders in the market is getting higher and higher, and investors’ demand for transaction anonymity and liquidity is higher and higher.
In order to meet the above needs, decentralized dark pool trading, as a new encryption asset bulk trading protocol, will surely usher in vigorous development in the future. In fact, many centralized exchanges now provide customers with fee-based dark pool trading tools. Dark pool trading is a new path other than aggregation trading and AMM: it provides a suitable place for large institutional investors to trade and helps increase the exchange’s liquidity.
The core difference between Renegade and all other exchanges (centralized and decentralized) is that the state is kept locally. Instead of a central server (like Binance) or thousands of distributed servers (like Uniswap) maintaining balances and order books, all Renegade state is maintained by individual traders.
When a trader wants to perform an action on their wallet (deposit tokens, settle a match, etc.), they must know their old wallet and their new wallet and send three pieces of information to the smart contract:
The smart contract maintains a global Merkle tree of all previous commitments and a set of nullifiers showing previous wallets.
By using the commit-reveal mechanism, the protocol allows for complete wallet privacy (i.e., no information about the wallet is leaked on-chain) while maintaining complete state consistency and preventing double-spending attacks.
Fundamentally, Renegade is simply a p2p communication network of many independent relayers that are constantly talking and executing MPC with each other as new orders enter the system. Relayers never hold custody of assets but are only granted access to wallets to calculate pairwise MPC.
Thus, by implementing this MPC-ZKP framework through collaborative SNARKs, the protocol creates a DEX that is both fully atomic (i.e., neither party can exit after MPC execution) and fully private, both pre-and post-trade.
Renegade’s dark pool trading service, in addition to avoiding the counterparty risks that exist in centralized exchanges and OTC trading desks, also solves many problems in the current DEX spot market, ultimately providing users with better prices and best execution:
By default, Renegade trades at the optimal mid-price calculated based on anonymous order book theory, and there are no market makers for spread trading. However, Renegade can also selectively execute matched orders for complete price discovery and better liquidity provision.
Given the widespread information leakage issues in the current DeFi system, many different types of traders could see price improvements on Renegade:
The Renegade project currently has no token information. Renegade is currently in an internal testnet, and the public testnet is scheduled to be released in the second quarter of 2023.
Christopher Bender: Founder of Renegade.
Joseph Kraut: Co-founder of Renegade.
According to public information on February 20, 2023, Renegade announced the completion of a $3.4 million seed round of financing, led by Dragonfly Capital and former AngelList CEO Naval Ravikant, Balaji Srinivasan and Lily Liu, Tarun Chitra from Robot Ventures, Marc from Tagomi Bhargava and Lev Livnev from Symbolic Capital Partners also participated in the round.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Harold
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