Binance Invites Users to Test its New Decentralized Exchange (DEX)

Binance Invites Users to Test its New Decentralized Exchange (DEX)

Binance has opened a testnet for a decentralized exchange based on its peer-to-peer order matching engine Binance Chain. Binance DEX will allow users to hold their own private keys and wallets, making the platform less vulnerable to the massive hacking attacks and alleged insider fraud that have plagued the cryptocurrency industry so far.

Also read: Early Token Project Stars in the Ethereum Ecosystem

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More User Responsibility and Control

Binance is the world’s largest global cryptocurrency exchange by trading volume, making it the most well-known name so far to launch a decentralized trading platform, or DEX for short. It’s testnet-only for the time being.

“Binance DEX is an exchange with a decentralized network of nodes,” said Binance CEO Changpeng Zhao (CZ). “With Binance DEX, we provide a different balance of security, freedom and ease-of-use, where you take more responsibility and are in more control of personal assets.”

Binance Coin (BNB), an ERC20 token listed as an asset on the existing, will be Binance DEX’s native asset. BNB was worth $10.90 USD at press time and was one of the past day’s biggest gainers in the crypto Top 20, rising 14.6 percent.

CoinBillboard BNB
BNB trading volumes on CoinBillboard.com

Binance Chain a P2P distributed system Binance said it developed with community input. The DEX will still require assets to gain a listing, however matching happens within its blockchain nodes and all transactions are permanently recorded on-chain. Binance claims this will make trading more secure and more easily auditable, with its source code posted on GitHub.

Traders will be able to issue, send and receive new tokens on the blockchain, and also propose new trading pairs to list.

CZ added that Binance Chain has near-instant transaction finality, with one-second block times. He said Ethereum takes about 20 seconds and Bitcoin averages 10 minutes for network confirmations, with the possibility of rollbacks (which has happened once in Ethereum’s history but never in Bitcoin) that would not occur on Binance Chain.

“With the core Binance Chain technology, Binance DEX can handle the same trading volume as Binance.com is handling today. This solves the issues many other decentralized exchanges face with speed and power.”

Binance DEX will support “proven secure and decentralized software” and hardware wallets. Binance’s Trust Wallet will fully integrate with Binance DEX, as well as the Ledger Nano S. It plans to add more supported wallets over time.

Trust Wallet founder Viktor Radchenko said his business is working toward decentralized accessibility to cryptocurrency. The intent is for users to have full control over their private keys, and easy access to other decentralized applications, to maximize the potential and mainstream adoption of cryptocurrency.

Binance DEX

The DEX – One of Crypto’s Enduring Promises

Though the concept of DEXs has been around for as long as cryptocurrencies themselves, the largest industry players still use a “traditional” online brokerage model: centralized services based on user accounts, custodial off-chain wallets, and trading engines. Promises of technology like atomic swaps (the ability to exchange crypto assets without a trading system at all) and deja-vu hacking attacks on crypto exchanges has only boosted demand for DEXs in a more tech-oriented group of traders.

The backing and resources of a famous brand like Binance could change that, introducing existing customers to a new way of managing and trading their funds. The next phase will determine whether there’s enough demand for decentralized trading to raise the profiles of smaller exchanges as well.

Binance is inviting its customers to test the new exchange, and has published a tutorial on how to get started.

Will the new DEX usher in a “new era of cryptocurrency trading” as Binance claims? Sound off in the comments section below.


Images via CoinBillboard.com, Binance

 



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