What Are Dark Pools in Traditional Finance and How Do They Contrast with the Mempool?

Dark pools are private forums for trading securities, typically used by institutional investors to execute large orders without publicly revealing their intentions. They contrast sharply with the mempool, which is a public queue of pending transactions.

Dark pools prevent front-running by obscuring order details, whereas the mempool's transparency is the primary enabler of front-running and MEV. The purpose of a dark pool is to minimize market impact; the mempool's transparency maximizes the opportunity for market impact exploitation.