- CZ says privacy-focused DEXs like Aster offer a key advantage for traders.
- Aster’s hidden orders help prevent the exploitation of trading strategies.
- Zhao predicts that DEXs will rival centralized exchanges in volume soon.
- BNB Chain’s meme coin surge stems from an unexpected Mid-Autumn Festival tweet.
Changpeng Zhao (CZ), former CEO of Binance, recently discussed his views on the growing trend of privacy-focused decentralized exchanges (DEXs) and why he believes Aster’s hidden orders offer a significant advantage over Hyperliquid’s transparent order books. In a recent interview, Zhao explained how privacy is crucial for professional traders and why transparency in order books can put them at a disadvantage.
Privacy Advantage for Professional Traders
Zhao emphasized that professional traders, particularly those in Wall Street, highly value privacy when making trades. He explained that the ability to view other traders’ orders in real-time can lead to exploitation of strategies, ultimately resulting in losses.
“Every single trader on Wall Street I talked to does not want other people to see their orders in real time,” Zhao noted. He argued that the transparency of Hyperliquid’s on-chain order book leaves traders vulnerable to competitors who can reverse-engineer their strategies.
Aster, Zhao explained, provides a significant structural advantage by implementing hidden orders. This feature helps protect traders’ strategies and preserves the integrity of their trades. Zhao’s belief in privacy-focused DEXs like Aster is grounded in over 20 years of trading experience, which has shown him that privacy is a key requirement for success in the professional trading world.
BNB Chain’s Meme Coin Surge and Its Influence
In the interview, Zhao also touched on the unexpected rise of meme coins on BNB Chain, linking it to a spontaneous post during the Mid-Autumn Festival. Zhao posted a simple tweet asking users to share their best memes.
The response was overwhelming, with the community posting memes, including Chinese-language tickers. Zhao explained that the community created this meme culture organically, and it has now grown to include meme coins that have reached market caps ranging from $100 million to $500 million.
The rise of meme coins on BNB Chain is noteworthy because Zhao contrasted this culture with that of Solana, where meme coins are more focused on short-term trading. He mentioned that BNB Chain traders are generally more long-term holders, contrasting them with the faster-paced meme traders on Solana. This distinction in trader behavior further emphasizes the unique ecosystem on BNB Chain and its influence on the meme coin market.
The Shift Toward Privacy-Focused DEXs
Zhao’s remarks about privacy in trading align with his broader investment thesis. He argued that decentralized exchanges with a focus on privacy will likely see greater adoption as the space matures.
Zhao also forecasted that privacy DEXs would eventually rival centralized exchanges (CEXs) in terms of trading volume. He sees this transition happening over several decades, with users initially coming through CEXs due to their user-friendly interfaces and moving to DEXs for their greater selection and early access to tokens.
Zhao’s perspective on DEXs is informed by his understanding of both the current regulatory environment and user needs. He also pointed out that while centralized platforms might improve in the short term, the future is likely to be dominated by on-chain solutions. As this shift occurs, privacy-focused platforms will likely be in high demand.
The Challenges and Future of On-Chain Trading
The increasing demand for privacy on decentralized platforms poses a challenge to exchanges like Hyperliquid that operate with transparent order books. Although Zhao acknowledged that Hyperliquid could potentially add privacy features, he highlighted that exchanges must compete on multiple dimensions, not just the inclusion of specific features.
Zhao’s predictions about the future of on-chain trading suggest that the move towards privacy DEXs will be gradual. He anticipates that over the next 20 to 50 years, on-chain platforms will become the standard, with traditional centralized exchanges transitioning to decentralized models. However, he also recognized that the transition may not be immediate and will depend on broader market trends and user adoption.
Zhao’s comments reflect the growing importance of privacy in the digital asset space, especially as professional traders demand more secure trading environments. With projects like Aster leading the way in privacy-focused DEXs, the landscape of decentralized finance may undergo significant changes in the coming years.
