Jack Dorsey is Building a KYC-Complaint DEX for Bitcoin with a Decentralized Identity Solution
Twitter CEO and co-founder Jack Dorsey have shared more details about his project that revolves around Bitcoin.
Last month, Dorsey had said that decentralized finance (DeFi) on Bitcoin is his new goal — “an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services” and that the name of the business is “TBD.”
He further revealed this week that the idea is to build a decentralized exchange (DEX) for the leading cryptocurrency.
“We’ve determined @TDB54566975’s direction: help us build an open platform to create a decentralized exchange for Bitcoin,” said Dorsey late on Friday.
DEXs have become immensely popular recently, and there is no shortage of them in the crypto space, with Ethereum-based Uniswap currently the leading the sector, accounting for 72.3% of DEX market share based on weekly volume, followed by SushiSwap, DODO, Balancer, Synthetic, Bancor, and 1inch.
Unlike centralized exchanges, decentralized exchanges don't have a middleman.
— Coin98 Analytics (@Coin98Analytics) August 27, 2021
Square's General Manager of TBD, Mike Brock, gave us further insight into what the team is building and the questions they are facing during the process.
Centralized and custodial services like Square’s Cash App and Coinbase have a number of issues and aren’t distributed evenly around the world, is the problem TBD is looking to solve — making it easy to fund a non-custodial wallet anywhere in the world through a platform, said Brock.
“You can think about this as a decentralized exchange for fiat,” he added.
While entities exchanging fiat for crypto will still have to comply with KYC/AML laws, TBD will also focus “on a decentralized identity solution” in that regard.
As for regulation, “Navigating financial regulations to make things easy for people has literally been my forte for 7 years. We know what we're up against,” assured Brock.
Jack Dorsey and the Square team focused on bitcoin just announced they are going to build a decentralized bitcoin exchange.
We are just getting started as decentralization eats the world.
— Pomp 🌪 (@APompliano) August 27, 2021
Brock reassured that the platform will be developed entirely in public and will be open-source with no foundation or governance model that TBD controls. “Permissionless or bust,” he added.
While the team is considering RSKSmart to make it Bitcoin-native, top to bottom, because gaps will be too large, they are also open to considering other chains as a bridge.
Some of the gaps are around scalability and cost, which is solved by Lightning with payments, but a similar infrastructure is required for exchanging assets like stablecoins.
“We believe Bitcoin will be the native currency of the internet. While there are many projects to help make the internet more decentralized, our focus is solely on a sound global monetary system for all.”