- Yan defends transparent liquidation levels on DEXs, arguing public data protects traders better than hidden CEX operator knowledge.
- CZ advocates private ‘dark pool’ DEXs to prevent front-running, criticizing public order books for high slippage and costs.
Hyperliquid founder Jeff Yan responded publicly to Binance founder Changpeng Zhao (CZ) on June 3rd. The exchange follows the liquidation of trader James Wynn’s $100 million Bitcoin position on Hyperliquid’s decentralized exchange. Their disagreement centers on whether trading positions should be visible to all users.
Thank you to everyone who took the time to thoughtfully respond to my post on transparent markets. I understand that the thesis is controversial and that Hyperliquid is at a new frontier as the first fully transparent order book venue of its scale.
I could well be mistaken, and…
— jeff.hl (@chameleon_jeff) June 3, 2025
Yan defended Hyperliquid’s transparent model. He argued that showing liquidation levels publicly protects traders from targeted “hunts” by large actors.
“Users are less likely to be successfully hunted if everyone knows liquidation and stop prices than when only the exchange operator knows,” Yan stated.
He proposed keeping only the exact margin amount private (“margin privacy”). A liquidation level is the price where an exchange automatically closes a leveraged position due to insufficient collateral.
Given recent events, I think now might be a good time for someone to launch a dark pool perp DEX.
I have always been puzzled with the fact that everyone can see your orders in real-time on a DEX. The problem is worse on a perp DEX where there are liquidations.
Even with a CEX…
— CZ 🔶 BNB (@cz_binance) June 1, 2025
CZ had earlier criticized Hyperliquid’s transparency after Wynn’s position was liquidated. He suggested private “dark pool” decentralized exchanges, similar to traditional finance, where orders remain hidden. CZ believes visible orders enable front-running and increase trading costs through slippage.
“I have always been puzzled with the fact that everyone can see your orders in real-time on a DEX,” CZ remarked.
Yan countered that even private systems carry risks
He claimed centralized exchange operators or insiders can access non-public margin data to target large positions. Yan asserted public systems allow sophisticated traders to counteract hunters and potentially secure better entry prices. Hyperliquid offers a transparency shield against hidden exploitation, according to its founder.
Wintermute founder Evgeny Gaevoy offered a different view.
but generally I think "wynn" is just a well executed HL promo campaign, well played
— wishful_cynic (@EvgenyGaevoy) June 2, 2025
He suggested the public dispute and Wynn’s liquidation served as promotion for Hyperliquid.
“I think ‘Wynn’ is just a well-executed HL promo campaign, well played,” Gaevoy commented.
