Major traders face a challenge: maintaining discretion in their activities to avoid influencing market prices or exposing long-term plans. In traditional equity markets, this has been possible for decades through dark pools and off-exchange venues. As of January 2025, Bloomberg reported that over half of U.S. equities trading occurred outside public exchanges.
The cryptocurrency sector lacks such mechanisms, making it harder to conceal trades. Every transaction on platforms like Hyperliquid or decentralized exchanges is visible, with companies like DeFiLlama and Arkham aggregating this data for analysis. This transparency has led crypto markets to replicate a traditional finance issue: market movers are easily identified. Consequently, firms providing liquidity on public decentralized exchanges find their strategies quickly reverse-engineered.
“On Hyperliquid, one of the leading market makers must alter their trading strategies every three weeks due to imitation,” Denis Dariotis, co-founder of GoQuant, a crypto trading infrastructure firm backed by GSR, stated in an interview. “This is the alpha problem.”
Market makers are often blamed during crises, such as recent scrutiny over Jane Street’s role in the Terra/Luna collapse. In traditional venues, similar trades would go unnoticed.
GoQuant’s solution is GoDark, a decentralized exchange set to launch on Solana in May, using zero-knowledge proofs to hide trade details from all participants and node operators. The goal is a matching engine where no one can see what they are matching.
The technical feasibility of this at useful speeds remains uncertain. Zero-knowledge proofs require significant computation, adding latency absent in privacy-agnostic systems. Testing shows order matching between 25 to 50 milliseconds – fast for decentralized exchanges but slower than centralized venues by an order of magnitude. While retail traders may not notice, market makers might.
A private exchange without volume is ineffective. GoDark aims to attract liquidity similar to Hyperliquid’s HLP vault model, where users deposit funds that are used as market-making liquidity, with participants receiving a fee cut and priority in liquidations. This strategy succeeded for Hyperliquid but failed for others replicating it afterward.
Regulatory challenges also loom. Traditional dark pools conceal pre-trade order information but comply with post-trade reporting and regulatory oversight. GoDark’s design offers more absolute privacy without the ability to produce full audit trails. Automated OFAC screening is included, yet this may not satisfy regulators seeking increased transparency in crypto over the past three years. The outcome of this tension, particularly concerning institutional participation in less regulated jurisdictions, remains uncertain.
GoDark is distinct from GoQuant’s existing institutional product with Copper and GSR, a spot DEX launching next month for a narrower client base. The May launch targets retail users.