Are Private Transactions Possible for All Types of Crypto Derivatives Trades?
The feasibility of private transactions for crypto derivatives trades depends heavily on the underlying protocol and whether it operates on-chain or off-chain. For on-chain derivatives protocols, like those using smart contracts for settlement, private transactions via relays (e.g.
Flashbots) are technically possible to prevent MEV during the execution phase. However, for centralized derivatives exchanges (CEXs), privacy is maintained through the exchange's internal, off-chain order book and matching engine, not through blockchain-based private transactions.
The regulatory environment also dictates what is permissible.