Steemit Crypto Academy Contest Season 11 Week 3 - "Dark Pools In Cryptocurrencies

Dark pools in cryptocurrency are like secret or indoor trading where big players like institution make deals away from public eyes. Just imagine a hidden indoor places where these large investors swap their digital assets in private. It is called "dark" because it is not visible on regular exchanges for regular, making it a bit mysterious.

In these pools, big players can exchange significant amounts of crypto without causing big price swings. It is like they are whispering trades to each other rather than shouting them in a crowded market. This hidden trading helps avoid affecting the overall market prices while they make their moves.

The way it works is that these pools match buyers and sellers anonymously for instance exchange itself find out randomly . This means the details of the trade, like who is buying and who is selling, are not immediately revealed. Only after the trade is done do the parties know who they were trading with whom . It is like a secret club hidden individuals for trading large amounts of cryptocurrency without making waves in the public market.

Absolutely, nowadays most of crypto exchanges provide dark pools for trading. It is like having a special room for big traders to do secret deals. In this room, they can trade large amounts of particular crypto currency (BTC , ethereum) without everyone watching.

Here is how the question how it works: imagine you want to sell a lot of Bitcoin without causing the market price to drop. In a dark pool, the particular exchange finds a buyer for you anonymously. The trade happens quietly , and only know after it is done do both parties who was on the other side .

Most major tokens like Btc , Ethereum, and others are supported in these dark pools. Some exchanges might charge a fee for using their dark pools as per policy , which can be a percentage of the trade value. To join in to the dark pool , you usually need to be a high-volume trader or have a special account with the exchange. It is like a secret club for big crypto players!

Dark pool trading is something that's usually done by the big players some big institution we can say in the crypto world, like big companies or investors with lots of assets. They do this so they do not accidentally mess up the regular market dynamics . It is kinda like they are making secret trades in a special room.

Now, here is the big deal: only experienced traders who are like pros accounts in the crypto game are allowed to do this kind of trading. They need to have made a special kind of account called a pro account. So, if you are just getting started with crypto or you do not have a lot of assets, this might not be something you can do.

Imagine you have a bundle of Bitcoin, and you want to sell it without making the market dynamics go down. In the dark pool, the exchange helps you in finding a buyer without showing everyone who is buying or selling. It is like making a deal without anyone else knowing until it is done. But remember that , this is for the big shots in the crypto world who know the game really well.

Decentralized dark pools are like also lime secret trading spots in the crypto world, however they work in a different way. One example i want to give in this scenario is called "Nightfall," which is a decentralized dark pool for Ethereum. It is special because it does not rely on a central authority to match trades.

In Nightfall, buyers and sellers connect directly without a middleman or third person for deal . Imagine one individual want to trade some Ethereum for another token. The smart contracts in Nightfall help you find a match according per requirement without showing everyone your trade details. It is like whispering your trade to the system, and it helps to keep your moves private.

This is pretty good because it takes away the need for a big exchange to manage things. It is all on the blockchain & automatic. But just remember, like regular dark pools, this kind of trading also might need some experience in the crypto world to use it right.

Sure, here's a comparison between centralized crypto exchange dark pools and decentralized dark pools:

Keep in mind that both types of dark pools have their own advantages and trade-offs, catering to different needs within the crypto trading community.

Certainly, here's a breakdown of the advantages and disadvantages of dark pools in cryptocurrencies:

Dark pools offer certain benefits, but they also come with their own set of drawbacks. Traders need to weigh these pros and cons to decide if dark pools align with their trading objectives and risk tolerance.