Steemit Crypto Academy Contest / S11W3 - Dark Pools In Crypto

Good morning 🌄

Greetings to you all!
This engagement challenge is very interesting and this is about information related to dark pools in cryptocurrency so I would like to give my best here by answering all the required parts.

Discuss in your own words what Dark Pools are in cryptocurrency. And explain how it works?

Dark pools in cryptocurrency are basically some particular,secret or private platform that are used for trading purpose and mostly here large institutional investors can buy and sell their assets when they don't reveal their intentions to public or in front of everyone. These platform allow different large institutional investors to place their orders and then to execute their trades away from other traditional exchanges.

Orders in dark pool are matched internally mostly and its meaning is very simple that platform itself seek for different buyers and sellers within its on network which plays a key role for minimising the impact of it on other market and also plays a key role in prevention for other traders to take advantage of large orders. Mid point is a fixed and a single prize at which all trades are usually executed and midpoint basically determined by current market conditions.

Anonymity that is provided by a dark pool allows different institutional investors to trade cryptocurrencies if they want to trade them at large volume or large scale even without causing significant changes in prices. Dark pool helps to maintain confidentiality among investors when they know that there orders that they are placing are not visible to general public. It becomes very beneficial for all investors who don't want any slippage which is basically are difference between price which an investor can expect for execution and an actual price of execution.

One of the most important feature in the working of dark pool is that they refer with a very low fees for trading that is a big attraction for all the investors and especially for those investors who want to trade their cryptocurrency to large scale as well as there is reduced risk of manipulation of Crypto prices in dark pools as well as dark pools keep their orders hidden and they are not transparent so for all these working strategies of dark pool and all these causes are being attractive for dark pools.

Do all crypto exchanges offer a dark pools? If yes, explain how does its dark pool work? What tokens are supported? Are there any fees attracted? And What are the requirements to get involved in dark pools trading on the platform?

It is not must for all cryptocurrency to offer dark pool that's why the answer is no that there are some cryptocurrencies who don't offer a dark pools because some of the cryptocurrencies don't have a much unique way for operating their dark pool feature. Dark pools work just with similarity to traditional dark pool just by providing a private and secret trading environment for large institutional investors.

Tokens that are being supported in dark pools can very and it all depends upon the exchange because some of the major cryptocurrencies including Bitcoin and ethereum and others that are in high trading or you can say that that have high trading volume are supported by dark pools. If someone wants to check that which token is available for Trading India dark pool then it is very important to check that token within the specific exchange to see it.

In dark pools fees also varies or differs in different exchanges. There are some platforms that charge a particular fees just for assessment and trading in dark pool but there are some others platform that include this fees as overall trading fees so it's very essential to check fees of exchange so that before an investor may invest he may understand the price or the cost involved in dark pool trading.

If we talk about requirements that what are the requirements to involve in dark pool trading so it may also vary. Basically dark pool cater to institutional investors, for that reason there are some specific criterias including minimal trading volume or in other words you can say account size. If I add one thing more than I have also seen some of the exchanges that require verification from users to ensure their compliancy with regulations for maintaining integrity of dark pool.

Most important thing for investors is to do research and to understand for the specific details of Crypto exchanges in dark pool before getting involved so they may not face any difficulty in later. Every platform have their own rules, have their own supported tokens, have their own requirements so self research by keeping in mind all these factors is very important before participating and before making decision to get involved in dark pool trading.

For the chosen dark pools, show how to perform block trading on the platform.

Here I am sharing a general overview and steps for dark pool trading that how to perform block trading on platform.

1. In first step it is very important to sign up and to create your personal account at the platform.

1. You should fill all the required parts if they are necessary for any verification process.
2. If there is any requirement of deposition of cryptocurrency then complete that requirement first.
3. After that you should navigate for the dark pool platform.

1. You should now specify your block trade by giving information about the token that you want to trade as well as the quantity of tokens you want to trade and if there are any other required parameters then you should fill all of them.
2. Next step would be to about the submission of your block trade order that you have placed before.

1. In there on network dark full platform would try to match your order with any other eligible person privately.
2. When a trader of your match would be find out by dark pool then trading would be held at midpoint which is a fixed price for trading.
3. After that execution the tokens would be transferred to your account that you have traded.

(In the above screenshot this transaction has not been take place due to lack of fund as well as timing of the transaction is also from Monday to Friday and today is Sunday that's why transaction cannot proceed)

Again I want to remind that there are different specific processes on the different dark pool platforms so before taking part in any dark pool an investor should confirm all parameters by keeping in mind all the factors involved in dark poor trading and for this it is highly recommended by me to review different documentations of platforms and they can also contact there customers for getting deep details.

Explain the decentralized dark pools? State a decentralized dark pool in cryptocurrency and discuss it. How it works?

Decentralized dark pools in cryptocurrency space basically operated at blog change that allow for pear to peer trading and in these trading there is no requirement or no need for intermediaries. If I give a very brief example of deentralised dark pool then we all know ethereum blockchain and at this blockchain there is a decentralized dark pool in Republic protocol and motive of this decentralized dark pool cryptocurrency is to provide security for different traders when they want to trade there large blocks of cryptocurrencies when they don't want to expose their trades publicly.

Privacy and Order Creation

There are different traders at Republic protocols decentralized application at which traders create different confidential orders by keeping in mind all the parameters and by specifying the token they want to trade, the quantity of that token and their desired price.

Order Matching

There is a cryptography algorithm used at Republic protocol and the algorithm is "shamir secret sharing" which is used to match orders of traders but it don't reveals other details.

Atomic Swaps

Atomic swap is basically a trustless exchange at which different tokens are swapped simultaneously which ensures that neither party can back out of the trade now and Republic protocol facilitates atomic swap once order match founds.

Dark Pool Liquidity

Republic protocol integrate with liquidity providers who have contribution of tokens to dark pool and liquidity providers also earn fees if they participate in it for providing sufficient liquidity.

Final Settlement

Once that trading being executed then tokens are settled on the Ethereum blockchain and balances of traders are also update according to that.

Compare a centralized crypto exchange dark pools with a decentralized dark pool. What are the distinctive differences?

Centralised Crypto exchange dark pool and decentralized Crypto exchange dark pool have some of the distinctive features so according to my knowledge I would like to discuss some of the most distinctive features of both.

Structure

Centralized Dark Pool	Decentralized dark pool
Centralised dark pool basically operates within a exchange platform which is centralised and where all trades are executed and settled then as well as exchange x as an intermediate and also hold custody of user's funds also	Decentralized Dark Pool aur those that operates on a decentralized platform and also offers peer to peer trading in which there are no requirements of intermediaries.Users retain the control of their own funds.

Privacy

Centralized Dark Pool	Decentralized dark pool
Centralised dark platform have privacy but there is limitation on their privacy because they have an access to user's trading data to some extent as well as to order book information which also be more vulnerable for hacking	In decentralized dark pools there is more enhanced privacy because trade details are kept more confidential through cryptographic algorithms.

Liquidity

Centralized Dark Pool	Decentralized dark pool
Centralised dark pools have more liquidity due to centralised nature of exchange that's why mostly it has been seen that there are more investors and traders attracts towards it	decentralized dark cool have lower liquidity because they reply on liquidity providers.

Regulatory Compliance

Centralized Dark Pool	Decentralized dark pool
Centralised dark pool basically more subjected for regulatory requirements and their require users to complete KYC(know your customer) procedure for accessing the platform	Decentralized platform operates in permissionless manner we can say because they don't raise concerns regarding the regulatory compliances.

It is very important to note that both centralised and decentralized dark pools have their own pros and cons but important thing is to consider different factors when choosing any type of dark cool including privacy security liquidity as well as regulatory compliance of platform in which a user want to participate.

What are the advantages and disadvantages of the Dark pools in Cryptocurrency?

There are different advantages and different disadvantages of dark tools in cryptocurrencies so let's have a brief look of all disadvantages and advantages about which I have an idea.

Advantages

• There is enhanced privacy in dark pools which allow triggers for trading if they wants to trade or execute large orders without revealing their intentions to other. This minimise the risk of front-running also.

• Dark wool also have an advantages of reduced market impact when dark pool match large buying and selling order of exchange, also cause prevention of price fluctuations that may also occur while execution of large trade at public exchange.

• Dark pool also cause improvement in liquidity when it bring buyers and sellers together.It results for improved execution for traders especially for those who have large orders.

• Dark cool may also offers less transaction cost compared to executing different trades at publical exchange.It can be very advantageous for high frequency traders and large institutional investors.

Disadvantages

• Dark pool offers lack in transparency which can be considered as an disadvantage. Then trades are executive of exchange then details of all transactions are not available to public which results in lack of price discovery for others.

• Dark pools are often operated in regulatory gray area in which there is lack of clear regulations that make it very difficult to ensure that is there any fair trending practice or not as well as in prevention of market manipulation.

• Other disadvantage of dark pool is that there can be the encountering of fraud or unreliable parties that can result in financial losses because in dark pools user rely on integrity and trustworthy of platform.

• Dark pools are also designed for institutional investors so they can potentially create an uneven playing field in term of market access.

I want to invite
@chant
@suboohi
@faran-nabeel
@mile16
To participate 😊

Have a nice day💕