Steemit Crypto Academy Contest / S11W3 - Dark Pools In Cryptocurrencies

Assalam O Alaikum

Hello Steemians! Warm welcome to my post. I hope that you will be doing well. I'm also fine and enjoying my day. Today I'm going to participate in this Steemit Engagement Challenge Season 11 week 3 in the Steemit Crypto Academy. The topic of this challenge is "Dark pools in Cryptocurrencies". So let's start without any more delay of time.

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Created by Canva

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Discuss in your own words what dark pools are in crypto currency. And explain how it works?

In the world of crypto currency the dark pool is a platform where the big investors and Whales do transactions privately and don't reveal their transactions details publicly. The main objective behind the dark pools is to reduce the affects of their transactions on the overall crypto market because they do transactions of a very huge volumes. More ever the crypto market is highly volatile and if they reveal their transactions details the crypto market witness sudden fluctuations and the prices of crypto currencies may increase or decrease.

The transactions within in the dark pools goes in the less transparency because their details aren't visible in the crypto market. In the dark pools the large institutional investors are involved and do the transactions my setting and matching the orders if their transactions between them. I think the dark pools are effective for the investors who can't invest a huge amount in the crypto market. This is because the transactions within the dark pools can't affect the market and other investors.

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Working of Dark pools

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The working of Dark pools is quite simple to understand. There the word Dark refers the less transparent and it meant that the private transactions. Let's discuss about the working of Dark pools.

• First of all the Institutional investors and the people who has huge Worth of their crypto assets, and who wants to take a part in the dark pools has to register their name and the details of their assets within in a specific dark pool platform.

• After this they submit the order rather they want or to sell their crypto assets and the expected prices of their assets and then the dark pool engine scans their transactions and match the order within another person according to the desired prices within the dark pools.

• Then their transactions and their trades are executed within the dark pools and aren't shown to the people and within the crypto market. Then they receive the complete details of their transactions and thus have successfully bought and sell their crypto assets within the dark and without affecting the crypto market.

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?

I don't think that all the crypto currencies may offer exchanges at the Dark pools. This is because there are different criteria of exchanges fo different crypto currencies and some of them may not meet the criteria of Dark pools exchanges. The working of Dark pools I have discussed in the above section of my post such as the dark pools work by setting and matching the orders of different transactions as they set before the trade at dark pools. Then the Dark pools engine scans their transactions and thus made it successful by checking the criteria of from both the traders such as getting desired prices, volume of transactions and other things.

There are different kinds of tokens which are supported at the dark pools platform such as the Bit coin and Ethereum because they are the famous and highly traded tokens in the whole world and in the world of crypto currencies. Yes the fees are also attached within the trading in the Dark pools. The fees may depend on the trading volume and on the type of trading coin and it can increase by increase in the volume of transactions in the Dark pools.

Whenever we start a task first we see whether we can do it or not or whether we have enough strength to do it or we check that rather we are meeting with the specific criteria of that work. And same like that there is also some necessary requirements to get involved in the Dark pools trading platform. Let's discuss about them;

• First we have complete knowledge about the trading in the Dark pools and we should complete information about the pros and cons of that trading platform.

• After this we should check our eligibility for doing exchanges in the Dark pools such as we must have a high volume and high net worth to meet the criteria of trading in the Dark pools and to do trading between the Institutional investors.

• A specific criteria to engage in the trading and having a minimum amount which are meeting the requirements for trading and the we are also fulfilling the verification process of the trading and then we are eligible for trading at the dark pools.

For the Chosen Dark pools, show how to perform block trading on the platform.(Screenshots are required)

Yes the binance is also offering the dark pools trading and block trading so let's discuss step by Step about the dark trading on binance.

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• Step 1: In the first step you have to open the binance website or application and then register your account by putting the required information. If you already have an an account then simply login your account. As you can see in the below screenshot.

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• Step 2: In the second step after verifying your account on binance and in the below screenshot you can see the main page of the website is opened. There you have to click on the Trade option and then pop down. In the below you can there is a Block Trading option and then click on this.

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• Step 3: In the third step they asked me about my knowledge of block trading and give some trading tips and the requirements. Then I read that instructions and click on the Start Trading option as you can see in the below screenshot.

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• Step 4: In the fourth step I have selected the Steem Token for trading and swap it. Besides this we can swap different types of tokens there. After this I have put the amount about 100 Steem and then click on the below option.

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• Step 5: In the fifth and final step my block trading in remain unsuccessful due to some reasons. The first reason is that I don't have required amount for trading and the second is the required time. The block trading can be done from Monday to Friday so today is the Saturday so that is why I can't completed my transaction.

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Explain the decentralized dark pools? State a decentralized dark pool in cryptocurrency and discuss it. How it works?

The Dark pools which are based on the decentralization network are called the decentralized dark pools. In that type of dark pools all the transactions are done within the decentralization and that types of dark pools work according to the principles of decentralization. In this type of Dark pools the peer to peer transactions occur and they are not controlled by a single authority. In a decentralized dark pool the transactions also remain private and can't affect the market.

The Republic Protocol (REN) is a decentralized dark pool which works on the principles of decentralization. It is provide peer to peer transactions and hide the order books of the investors and keep all the transactions private. It provides a large scale of transactions and the trading of crypto coins with keeping all the details of their transactions private.

The Working of republic protocol (REN) is quite similar to other decentralized dark pools. The REN works on the basis of nodes which called dark nodes and these nodes are responsible for exchange the crypto tokens and do the trading. The investors or users lock their amount of crypto tokens along with the percentage of their wanted profit such as bit coin.

Then the Dark pools match the order of the buyer which is meeting the criteria of the sellers on the opposite side and then all the orders are executed privately and their details aren't visible in the market. The REN Dark pools keep the transactions details invisible with the help of cryptographic techniques. So that was the working of Republic Protocol REN Dark pool.

Compare a centralized crypto exchange dark pool with a decentralized dark pool. What are the distinctive differences?

Yes there are several differences between the centralized and decentralized dark pools. Let's discuss about them in the below section.

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Centralized Dark Pool	Decentralized Dark Pool
The Centralized dark pools have full control over the matching orders execution.	The decentralization Dark pools have less control over the transactions because they don't have any central authority.
In the centralized dark pools the basic verification is required.	In the decentralized dark pools the basic verification on the platform isn't required.
The centralized dark pool provide privacy in some aspects and may reveal the transactions details.	The decentralized dark pools provide a high level of privacy and there are no chance of revealing the details of the trading.
The centralized dark pools are Less Transparent.	The decentralized dark pools are more Transparent.

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What are the Advantages and disadvantages of Dark pools in cryptocurrency?

Yes there are several advantages and Disadvantages of Dark pools for the crypto market. Let's discuss about them Advantages of Dark pools.

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Advantages Of Dark Pools

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• The trading within the Dark Pools don't affect the market such as the prices of other crypto currencies can't fluctuate i.e can't increase or decrease.

• The Trading within the dark pools is beneficial for the big investors and the wealthy traders who wants to buy or sell a huge amount of cryptocurrency.

• The Dark pools platforms offer a high level of privacy and the details of the trading and transactions remain hidden from other people.

• The Trading within the dark pools improve the liquidity of market and decrease the market manipulation.

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Disadvantages Of Dark Pools

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• The Institutional investors and the people who have high volume of their crypto assets can participate in the Dark pools trading and the small investors can't take a part in the Dark pools.

• Sometimes the huge investors take benefits of trading by doing private transactions within the dark pools so it may be unfair with the other investors because their transactions details are hidden.

• The Trading within the dark pools is somehow risky for the visibility of crypto market and can create challenges due to lack of transparency.

• A person who wants to take a part for the first time in the Dark pools trading may face lot of troubles and may lose his assets due to less experience.

So friends that was my entry and understanding about the Dark Pools in Cryptocurrencies and I hope that you will like it. Now it is a time to say goodbye to everyone and I want to invite my friends @suboohi @casv @aaliarubab and @janemorane to take a part in this amazing contest of crypto academy.

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Writer @abdullahw2

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Thanks All

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