GoDark, an institutional dark pool purpose-built for digital assets and backed by crypto custody and trading specialists like Copper and GSR, is unveiling a new service designed to execute large orders without putting your hands on the market.
Besides GSR and Copper, the offering comes out with significant support in the form of users such as: FRNT Financial (FRNT), Stillman Digital – a company owned by DeFi Technologies Inc. (DEFT), Fasanara Capital, Capital Union Bank, Tyr Capital, Hercle, Valos and Trillion Digital.
More than half of U.S. stock trading volume is done in dark pools for a simple reason: If large institutions want to acquire or liquidate volume that could potentially influence the price of a certain asset, they don’t want to raise their hands and spook the market. This is where dark pools come in, balancing the liquidity available on centralized exchanges (CEX) with the privacy inherent in over-the-counter (OTC) trading.
As it stands, this type of infrastructure is far more sophisticated than what exists in crypto, said Denis Dariotis, founder and CEO of GoQuant, the company that built the GoDark service.
“There is no real institutional dark pool in crypto,” Dariotis said in an interview. “There are DEXs [decentralized exchanges]there are centralized exchanges, there are OTC desks, but there is no real platform where you can trade off-chain and still get the benefits of trading the actual underlying spot asset.
The advantage of using a CEX, which is completely transparent and could inadvertently move the market, is the large amount of liquidity. An OTC desk, on the other hand, is opaque, but limited liquidity results in increased spreads and high fees. Dark pools lie in between, offering the best of both worlds.
Applying the dark pool concept to crypto is particularly relevant due to the high volatility of digital assets and the nature of distributed liquidity across different crypto trading platforms, Dariotis added.
GoQuant started as a market data provider for mid-to-high frequency crypto-native funds. From there, Dariotis and his team created an end-to-end trading system including market data and trade execution, with latency a main priority.
In addition to the GoDark service, Dariotis recently launched GoCredit, a borrowing/lending platform with a centralized matching interface designed to meet the needs of banks, TradFi hedge funds and similar businesses.
GoDark said it will offer cryptocurrency spot trading at launch and plans to expand to perpetual futures, conventional futures, options and other instruments.
In addition to ultra-low latency matching and non-custodial settlement, GoDark promises execution protections, including minimum execution sizes and the ability to require orders to be executed only if they match the best price available on various “lit” venues, akin to meeting the National Best Bid and Offer (NBBO) on U.S. stocks.
