Public visibility of liquidation levels and order flows on existing perp DEXs exposes traders to coordinated attacks, slippage, and forced liquidations by adversarial actors and MEV bots.

Quotes that support claims

This is important for traders using leverage because showing their positions in public reveals their liquidation point and makes them vulnerable to an organised attack

Zhao argued that privacy is particularly important in derivatives markets. He said public visibility of liquidation levels exposes large traders to coordinated attacks that could force premature liquidation: “If others can see your liquidation point, they could try to push the market to liquidate you. Even if you got a billion dollars, others can gang up on you.“

Zhao noted that while CEXs hide user identities, DEXs expose wallet-linked orders and liquidation points, enabling front-running and maximal extractable value (MEV) attacks, where bots detect and exploit pending transactions for profit