Steemit Crypto Academy Contest / S11W3 - Dark Pools In Crypto
Hello Steemians! As we all know, Steemit engagement season 11 has started, and this is the 3rd week of season 11. Today I am here to take part in a beautiful contest organised by the SCA Community. So let's start.
Discuss in your own words what Dark Pools are in cryptocurrency. And explain how it works?
In the world of digital currency, or cyptocurrency, the word dark pool means private trading platforms that allow big investors and big organisations to execute their buy and sell orders privately without showing them to the public. Some popular dark pools in the crypto world are Republic Protocol, XBTO, Circle Trade, and Kraken Dark Pool.
The main aim of these dark pools is to provide security to the large traders so that they can trade secretly. But on the other hand, due to a lack of transparency, regulatory issues arise because it is less transparent. These platforms are specially designed for large trades by big investors, and order books are not shown in dark pools trading. Now we will talk about how it works.
Working
The workings of these dark pools are quite simple, and they are similar to the other trading platforms. When a big investor wants to buy or sell digital money like BTC or ETH in a large amount. He or she places the order in the dark pool, and the dark pool matches this order with the matching order. The main work that Dark Pool performs is to process the order by hiding the order book so that no one from us can see the order details and the order can be processed secretly. So in this way, the dark pool works.
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?
According to my research, I can say that not all exchanges offer dark pools; there are some specific exchanges that offer dark pools. As I said above, the working of these dark pools is very simple, like other trading platforms, but one main thing about them is that they do not show the order details and match the orders by hiding the order book so that no one from us can see it.
If I talk about the tokens that the dark pools offer, it depends on the exchange as to which tokens it is allowing to trade. And its fees are surely higher than those of the other trading platforms because it executes large orders. Different platforms set different requirements to get involved in these dark pools, but as they execute large orders, they are surely for big investors, and the requirements can be high.
For the chosen dark pools, show how to perform block trading on the platform. (Screenshots required).
To give an answer to this question, first of all, I want to tell you guys about block trading. So, block trading means executing a large order of our specific crypto assets, like BTC and ETH, at once. In block trading, we don't have to run our orders in a partition method; we can execute a large order at once.
This type of trading is usually done by large investors or companies to execute large orders in a single transaction. The main thing about this is that the order book is kept private from the public so that the crypto market impact can be reduced or minimised. So this is block trading, in simple words.
So now come to the answer: actually, block trading needs a large capital for its running, and I am not a very big trader, nor do I have a verified account on the platform that allows dark pools, so that is why I am unable to perform block trading.
Explain the decentralized dark pools? State a decentralized dark pool in cryptocurrency and discuss it. How it works?
As I explained above, that dark pools in the crypto world mean private trading platforms that allow big investors to execute large trades and hide the order book from the public so that the impact of the market can be reduced. So decentralized dark pool means the private trading platform that uses crypto and blockchain technology.
A decentralized dark pool always runs on blockchain technologies, and it is much more secure than a centralized dark pool. It allows crypto traders to place buy or sell orders without showing the order sizes to the public. As I said, it is more secure because it uses cryptographic methods and smart contracts for its privacy and security.
KyberPRO
KyberPRO is a feature in the Kyber network that allows its users to perform dark pool trading. So we can simply perform dark pool trading with the help of a feature that is available in Kyber Network, which is a decentralized liquidity protocol, and with the help of Kyber Network, we can swap our crypto assets directly with the help of connecting our decentralized wallets like Trust Wallet, etc. Let's talk about how it works.
Working:-
The first step to using this service is to register ourselves on KyberPRO; after that, we have to reserve the tokens.
Then the trader can create the buy/sell order. After that, KyberPRO will match the order with the help of an algorithm.
After successful matching, the order will be executed and the transaction will take place. After that, the trade details will be recorded on the blockchain.
The main thing about it is that the order book in this process remains hidden, and trade details are recorded on the blockchain for transparency.
Compare a centralized crypto exchange dark pools with a decentralized dark pool. What are the distinctive differences?
Now we will compare centralized and decentralized dark pools. So lets start.
| Centralized | Decentralized |
|---|---|
| The user do not have more ownership and control over pool functions. | The user have more ownership and control over pool functions. |
| Less secure than decentrlized dark pools. | More secure than centralized dark pools. |
| Less transparent than decentralized dark pools. | More transparent because it use blockchain technology. |
| It offers higher liquidity. | It offers lower liquidity. |
| Arbitrators are involved in dark pool trading. | Less arbitrators are involved in dark pool trading. |
What are the advantages and disadvantages of the Dark pools in Cryptocurrency?
Everything has some advantages and disadvantages so now I will tell you guys about its pros and cons.
Pros:
It is more secure because it allows trader to execute large orders by hidding the order book.
It reduces the impact of market on traders because order execute in a secure way.
The transaction fees of dark pool is low and it is a great advantage.
It reduces the sipplage beacause transaction are not executed on the exchange.
Cons:
It is less transparent because in centralized dark pools the trade details not shown.
The hidding of order book and trade details can create regulatory issues.
Dark pool do not shows order book and that is why price discovery is limited.
Not small traders like me can participate in the dark pools.
https://steemit.com/hive-172186/@malikusman1/achievement-1-by-introduction-malikusman1
WRITER:
Greetings my dear friend,
Nice to see your participation on this engagement challenge and i am happy to read your post. Here you write that the main aim of dark pools to provide secure trading big investors. Your also shared the pros ans cons of dark pools that really helpful for newbies. Thanks for sharing this. Wish you success on this contest.
Regards,
Faran Nabeel
Yes you are right brother, trading is secure because order book remain hidden. Thanks for visiting.
Twitter share :-
https://twitter.com/MalikUsmanMuba2/status/1690012975438905345?t=t53eboPLVxJk--lOo3f3-w&s=19
Great explanation of Dark Pools and how they work in the cryptocurrency world. You've covered the advantages and disadvantages well!
Thank you so much for viiting bro, I hope this post will help you regarding dark pools.
You're welcome! I appreciate your visit. I found the post informative and insightful about dark pools. Thanks!
Hola Malikusman 😊
En mi investigacion yo tambien consegui lo mismo de que no todas tienen dark pool, y es muy obvio por la cantidad de requrimientos, y la calidad de usuarios que suele participar en ellos. A mi me parecio muy interesante e innovador este tema porque suena como algo bastante dificil, pero creo que nada que ver, solo debes tener el capital.
Exitos
Yes the dark pools are the Trading platforms to do the transactions and the details of the transactions remain hidden. I'm glad to see your entry in this engagement challenge. You have provide us the advantages and Disadvantages of Dark pools and also explained their working. Thank you so much brother for sharing your knowledge with us 😊
Stay blessed 😇
Bhai aapane is topic ko bahut acchi Tarah se explore Kiya hai iske alava dark pool ki kya definition hai bahut sare log yah jante hain lekin iski proper working ke bare mein kuchh logon ne Hi explain Kiya hai jinmen se main aapki explanation ko dad deti hun jo ki samajhne ke liye bahut hi mufeed hai aur iske alava aapane har ek question ko aur har EK party ko bahut acchi Tarah se byan karne ki koshish ki hai jiski vajah se mujhe aapki post vakai mein bahut impressive feel Hui hai aur Main aapko aapki koshish per good luck kahati hun.
Como bien lo defines las negociaciones llevadas a cabo en los Dark Pools son grandes transacciones, allí las grande ballenas estarán participando con toda seguridad, así mismo las instituciones oficiales y privadas. Todos quieren estar en esa torta que nos es de cumpleaños precisamente.
¡Los grandes son los grandes beneficiados!
Buena suerte y éxitos.
DEAR @malikusman1,
Greetings my friend, you have define darkpools very well and also talk about some popular darkpools. You also described their aik which is to provide security to large traders. I have read all the working and learned very well. The difference between centralized and decentralized dark pool was very good. You also describe pros and cons of this topic.
Overall, your article was very well described. It is easy for everyone to learn easily about darkpools. Thanks for sharing knowledge about dark pool in cryptocurrency. Wish you best of luck.
Best regards,
@zaibb