Market makers are fleeing public blockchains to protect their secret trading playbooks
Crypto trading is almost entirely public. One startup thinks it has borrowed an idea from Wall Street that could change that.
What to know:
- Close to half of all U.S. equity trading happens off public exchanges, yet virtually no equivalent exists in crypto, leaving market makers fully exposed to copy trading and public scrutiny.
- GoDark, starting up on Solana in May, uses zero-knowledge proofs to conceal trade details from everyone in the system, including the node operators running the order book.
- The platform faces the same challenges that have tripped up most DEX launches — bootstrapping liquidity and sustaining volume past the initial incentive period — with the added complication of a privacy model that regulators have not yet had to reckon with.
Crypto has never had an equivalent, and the absence is increasingly difficult to ignore. Every trade on Hyperliquid, every order on a decentralized exchange, is visible to anyone paying attention, and companies like DeFiLlama and Arkham exist to collect and present that data in a digestible way.
The crypto market, which prides itself on disrupting traditional finance, has replicated one of TradFi’s most persistent structural problems: If you’re big enough to move markets, everyone can see you coming. As a result, firms providing liquidity on public decentralized exchanges say their strategies get reverse-engineered quickly
“On Hyperliquid, one of the top market makers told us they have to rotate their trading strategies every three weeks because they get copied,” Denis Dariotis, co-founder of GoQuant, a crypto trading infrastructure firm backed by GSR, said in an interview. “That’s the alpha problem.”
