 As a crypto enthusiast, have you ever wondered how large volumes of cryptocurrencies are being traded? What would happen to the said crypto price if this large movement is made known to the general public? Hopefully, these and many more you will get to see and learn under this week's engagement topic. I present my finding below based on the contest tips given.
To kicks off this discussion, let's first throw in the literary meaning of the words "Dark" and "Pool". Dark is a word used to represent where there is no or little presence of light, which can also be translated as a mystery or hidden knowledge. That is when something is hidden from public view, or kept secret (private) to the knowledge of a few. Whereas, Pool on the other hand can be said to be the supply (pool) of something such as workers or money. So then, what is Dark Pool? Dark Pool, therefore is the supply of something, e.g. money in secret (private) or away from the knowledge of the general public. That explains Dark Pool in cryptocurrency as a secretly organized crypto exchange where large amounts of cryptocurrencies and securities are traded in secret (private) away from the eyes of the general market.
Dark pools permit institutional investors and big organizations to trade large quantities of cryptocurrencies and securities with one another without revealing trade details to the general public and individual markets. Dark pools serve as an efficient way for big organizations to execute block trades. The dark pool serves as the only comfortable market for such transactions as this kind of trade can cause major changes in the price of any security and cryptocurrency. Dark pools serve as a playground for the big players and large fund owners such as organizations and institutional traders to buy and sell assets in large amounts confidentially, in a way to reduce the influence of such trades on market prices. Trades on the Dark pool are usually executed by considering the best bid and ask prices. Hence, ensuring that there are no slippages during trades. With Dark Pool, institutional and organizational traders are rest assured that their trades will be executed at the intended price, making them very effective in illiquid crypto markets.
As earlier stated, Dark Pools are specially for institutional traders and not necessarily retail traders. This is because retail traders cannot cause a substantial shift in the general market price, hence there is no need for the privacy and anonymity associated with dark pools.
In my opinion, I believe that all cryptocurrency dark pool exchange, I may be wrong, but that's just how I feel since each cryptocurrency is processed in a large number of blocks. Therefore, all cryptocurrency exchange platforms should offer investors the ability to trade and invest in large amounts. As earlier stated, the Dark pool working mechanism is based on an over-the-counter process. It takes place between two counterparties who have requested the trade using the exchange platform of their choice as the counter. However, these trades take place behind the general market's eyes as they favor larger trade sizes being carried out discreetly and avoid slippage on the exchange. For this part, my exchange platform reference point would be the Binance Exchange platform.
I believe virtually all cryptocurrencies are supported as I'm made to understand that there are over 300+ supported cryptocurrencies, stablecoins, and fiat pairs under the Binance block trading (Dark Pool) platform.
Like you, I was curious to know also, being that a large number of cryptocurrencies are being traded, the fee must be sustainable. However, my biggest surprise is that, it is free of charge, hence no fees attached to carry out block trading on Binance Exchange.
This is common with every trading platform having certain requirements and guidelines to follow, hence Dark Pool in trading in Binance is not exempted. Below are a few of the requirements for users to participate in block trading. • All investors are required to have a Binance account with a complete identity verification and the account funded and ready to trade. • The minimum fund requirement to carry out a block trading in Binance is 200,000 USD or its equivalent in any cryptocurrency (i.e. 3,800,000 USD or 120 BTC).
So far, these are the stated requirements for those ready to do trade blocks on the Binance exchange.
I would love to get the experience of doing just as asked. However, I am not up for any of the requirements mentioned above to carry out a Block trade. First, I lack the full Identity verification, secondly, I lack the minimum amount required to carry out such trade, however, I am willing to show steps from the beginning to the point I am restricted. Step 1: Log in to your Binance account. Click on the drop menu (the three horizontal lines at the top right corner).
Step 2: Click "Trade" on the drop-down menu and click on "Block Trading".
Step 3: To place a "Market Order" Input the Amount of cryptocurrency you want to trade equivalent to 200k USD and above, then click on review.
Step 4: Preview your order details such as the trading pair, order type, and Amount. Then click on click on "Request Quote".
This is all I can offer as I'm not a big player or investor, but I believe after the process of requesting it is up to the exchange platform to match your trade order using an algorithm.
Decentralized Dark Pools are anonymous cryptocurrency trading platforms. This means the trade occurs directly between two parties anonymously eliminating any third party using smart contracts. Transactions in the Decentralized Dark Pool are carried out anonymously, meaning, the identity of the traders is not revealed, the same goes for vital information regarding the trade, such as the price and volume of the trade. Like Dark Pools, Decentralized dark pools are used to protect enormous trades from inducing price slippage in the exchange markets. Examples of decentralized dark pools include Uniswap, Kraken, and Renegade dark pools. With the Decentralised Dark Pool, when a trade order is received, it is broken down into fragments in a similar manner to the Bitcoin mining process. Thus, several nodes compete with each other to match the orders and get rewarded with a portion of the overall fee for each match made. When fragments are matched they are recorded and a notification is sent to other nodes regarding the matching. And if there is an unmatched fragment, it will be used in matching the next set of orders. Decentralized Dark Pool utilizes a zero-knowledge protocol (ZKP) to ascertain the integrity of the transaction.
The differences between a Decentralized Dark Pool and a Centralized Dark Pool are not different from those between a Decentralized Exchange and Centralized Exchange. Therefore, the main differences include:
Restricted market influence: Potentially better prices: Lower transaction costs: Price deviation (Difference in price): Lack of Transparency: Absence of Leveled Playground: Possible Conflict of Interest:
While dark pool cryptocurrency trading is genuinely known to minimize the effects of large trades on the cryptocurrency price, it offers special benefits to large investors. However, its lack of transparency results in several drawbacks such as price deviation from the public markets and the prospect of abusing this lack of transparency. I invite, @yakspeace, @ikwal, @ruthjoe, and @chasad75 to learn with me
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Edited using Pixellab App 
Edited using Pixellab App 
screenshot from Binance 
edited using GIF maker 
screenshot from Binance 
screenshot from Binance 
screenshot from Binance 
screenshot from Binance 
screenshot from Binance 
screenshot from Binance 
screenshot from Binance 
screenshot from Binance 
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Thank you for the invite dear friend..
Aside writing very extensive about this theme you have also made me have a better understanding about this topic.
I will look into submitting my entry.
Best wishes
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I will be on the look out for it. Thank you for your support. I very much appreciate.
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You are welcome
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You've shared a comprehensive comment discussing Dark Pools in the cryptocurrency context. Your explanation covers various aspects, advantages, and disadvantages of Dark Pools. Good job!
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Thank you for your time and support, I really do appreciate.
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This is my first of hearing about dark pools in crypto. From your explanation I don't need further research, because yours is well explained. Good luck to you sir.
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Thank you so brother for sharing a very informative and well presented post with us. Yes the dark pools are the platforms which provides the high volume transactions within the dark pools and don't reveal the transactions details and keep them hidden from the public eye. You have also provide us some information about advantages and Disadvantages of Dark pools in Cryptocurrencies and you have also explained about the dark pools with the help of screenshots.
Good luck 🤞
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Awwnnn, you know in most cases, your energy overwhelms me and I'm just happy to receive such comments from a hard worker himself. Thank you.
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Aahaan that's great 👍
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I agree with you about dark Pool explanation that if there is a large investor who wants to invest or trade in a large volume then there is a private and secure platform which is called dark pools available so it could be beneficial and for all of those but they should do proper research before getting involve in any of the dark pool about fee structure of execution
Nice to see that you have an idea about dark pool trading or block trading as you have also shared screenshots in third question as well as you have successfully shared advantages and disadvantages of dark pool in cryptocurrencies and I highly appreciate your efforts
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Greetings friend...
I must be sincere, I didn't have much knowledge about the topic at hand till I took into an extensive research. As commending as you say it is, I still felt something was missing and the review says just that. In any way thank you for your support. Stay blessed
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Hola Sahme 😊
La verdad a mi me parecio tu post muy completo y se ve que le pusiste empe;o en su desarrollo, ademas considerando que no es un tema tan facil, creo que hiciste un excelente trabajo.
Ahora hablando sobre las Dark Pool, no sabia de su existencia y me parecio innovador el concepto. Pero sin duda es para personas experimentadas y que tienen el dinero para hacer tales transacciones, sin embargo muy interesante.
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Your loving words brings smiles to my face. I must say thank you for making me feel much better with myself.
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Estoy de acuerdo contigo en que uno de los objetivos principales de los Dark Pools es reducir de manera efectiva el impacto sobre los precios. Por ello, las operaciones se llevan a cabo en privado fuera del ojo público para que los inversores de ese exclusivo club puedan completar sus transacciones sin que haya deslizamiento del precio. Por supuesto el precio que se haya fijado debe considerar ese posible impacto por los grandes volúmenes involucrados, una vez que se hagan visibles al público.
Gracias por compartir. ¡Suerte en el desafío!
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Thank you for your time. Good luck to you too
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