Webisoft and the Midnight Foundation have teamed up to build an institutional-grade dark pool decentralized exchange, a move aimed squarely at bringing confidential, large-scale trading to decentralized finance. The development lab Webisoft will use Midnight’s privacy-enhancing stack to construct a full-stack dark pool on the Midnight network, combining zero-knowledge proofs, a private matching engine, and atomic settlement to let institutions execute big trades without broadcasting their intentions to the whole market.
On today’s public DEXs, every buy and sell order is visible on-chain, and that visibility is costly for institutions. A very large order sends a clear signal about supply or demand; other market participants can react to that signal and push the price in an unfavorable direction before the trade finishes, increasing slippage and execution costs. That dynamic makes public blockchains a hard sell for traders who need to move size without moving the market.
A dark pool addresses the problem by keeping orders confidential until after matching and execution, using a private matching process to find counterparties and then settling trades at a price derived from public markets. The result is an execution that preserves confidentiality and avoids disruptive market feedback loops. The Webisoft–Midnight collaboration brings that institutional model into Web3.
Midnight’s privacy infrastructure, built around zero-knowledge proofs and the Zswap settlement protocol, will be the foundation for confidential trade verification and trustless settlement. The platform’s matching engine will perform private price discovery and counterparty matching without exposing order details publicly, and multi-party computation (MPC) techniques will be used to enable secret sharing and private computation between counterparties.
Wallet integrations, including support via a MetaMask Snap, will let participants manage encrypted balances and confidential order books in a developer-friendly way. Midnight positions this work as an application of “rational privacy,” where privacy is programmable and selective disclosure is possible in order to balance confidentiality with compliance.
As Fahmi Syed, President of the Midnight Foundation, remarked at Money20/20 earlier this year, “Privacy is a fundamental human and digital right, yet in our current systems, users give everything away just to participate.” ZK proofs, Syed and the teams argue, let firms verify statements about trades and balances without ever revealing the underlying data, enabling counterparties to be validated and matched while keeping positions hidden from the wider market.
That, they say, removes a major barrier to institutional adoption, since traditional blockchains make every transaction permanent and public. The project has been organized as a sequence of open-source, privacy-preserving components that developers can reuse and integrate into other applications. The roadmap begins with system architecture and privacy specifications that provide a complete design for building private data flows on Midnight and detailed guides for integrating Zswap.
Developers will get confidential asset and order management components, a secure wallet implementation for encrypted balances and confidential order books, which can be adopted by any application needing private user asset management. A standalone private matching engine built with MPC primitives will enable secret sharing and private price discovery for sophisticated trading or matching use cases, and an atomic settlement layer based on Zswap will deliver trustless, private on-chain execution and settlement. The teams also plan to publish validation and security reports and audits when components are completed. All tooling is intended to be released under an Apache 2.0 license so it can be broadly reused across the ecosystem.
Programmable and Approachable Privacy
This collaboration shows a broader idea: blockchains do not have to be strictly public or strictly private. Midnight’s approach, including its TypeScript-based language Compact, which abstracts much of the cryptographic complexity, aims to make privacy programmable and more approachable for mainstream developers. By shipping open-source tooling for wallets, MPC, matching engines, and smart contracts, the project hopes to attract developers building composable, privacy-focused financial applications.
Webisoft brings enterprise development muscle and production engineering experience to the effort, positioning the partnership to produce a production-ready, institutional-grade dark pool DEX native to Midnight. If the teams deliver on their promises, the platform could substantially lower the friction that has kept many institutions on the sidelines, giving them a way to place large trades without revealing strategic positions to the market.
The announcement lays out a clear, incremental roadmap and emphasizes audited, reusable components rather than a single big launch; stakeholders can expect iterative releases focused on developer adoption and security validation. If the Webisoft–Midnight dark pool delivers the promised privacy guarantees and performance, it may become a meaningful on-ramp for institutions that need confidentiality but also want the benefits of on-chain settlement and composability.
