A dark pool is a secure location where financial items can be traded. There is no visible order book, and trades are not publicly available (or only become visible after they have already been done), which is how it differs from a public exchange.
Dark pool liquidity is the term for liquidity on dark pool markets. Block transactions account for the vast bulk of dark pool trades. A block deal is a transaction involving a significant amount of an asset at a fixed price.
Dark pools were first developed in the 1980s, and institutional investors that frequently trade numerous securities have been the main users.
Institutions can place orders and execute trades through the use of dark pools without first disclosing their intentions to the public. This is a helpful quality since it could prevent them from making a profit on their trade before they have a chance to execute it if they want to buy or sell significant quantities of an asset.
Since their inception, dark pools have generated debate because of their utter lack of transparency. In any market, hiding the majority of the trade volume is not a desirable characteristic.
The use of dark pools may become safer as a result of recent advancements in cryptographic verification techniques. The danger associated with using a dark pool is diminished by the ability of open-source protocols to be created in a way that verifiably maintains the same rules for every member.