New Decentralized Exchange Binance DEX Is Launching Its Testnet
Binance DEX Is Launching Its Testnet
Have you ever wished that the world’s largest crypto exchange was more decentralized? If you did, Binance has just started to make your dreams true. Now, the company is launching the testnet of Binance DEX, the decentralized version of their product. At the time, it will be open only for testers, but you can already try it.
Binance DEX will enter public testing phase now and the public will be able to create their own decentralized wallets to use the platform, as a blockchain explorer to explore the Binance Chain, which will be used to support Binance DEX. At this new platform, traders will be able to participate as their own individual nodes and they will be able to hold their private keys.
In this peer to peer (P2P) system, Binance will stop being the custodian of the assets of the clients and will only provide them with the P2P space, the blockchain, in which they will make their own trades.
Part of the demand for this kind of service exists because the users are afraid that the exchange might end up being hacked some time. Several cases happened last year, so it is not an exaggeration to affirm that this could happen even to the largest exchange in the world. It did happen to Mt Gox more than five years ago.
However, the catch is that Binance will no longer reset your password if you lose it. You will lose your money. This is hardcore trading and some folks will obviously not be so keen on this new way of trading.
The CEO of Binance, Changpeng “CZ” Zhao, has affirmed that the official launch is near but that the company needs to gather some feedback first before they release the final product or release a timeline in order to do it.
According to CZ, Binance DEX will provide a lot more freedom for the users and will be very easy to use. Now, they will be more in control of their assets, which is a demand that some clients had for a long time. Trust Wallet, which was recently bought by Binance, was already integrated into this new solution.
Other hard wallets will also be supported by this product, but nobody actually listed them all at the time of the announcement. Trust Wallet and Ledger Nano S were the only two that were announced so far.
When the Binance Chain is finally launched, the BNB tokens will migrate there and will start to be used as a currency in this blockchain. BNB coins are Ethereum-based ERC20 tokens that were created in order to facilitate the trades of the users on Binance, as they give discounts for the users.
As soon as they are finally moved, the company will be able to leave the Ethereum network and start using its own. According to Binance, this new chain will be faster than Ethereum and much more efficient. It is based on the Tendermint protocol and it uses a delegated proof of stake consensus algorithm. The idea is to have “a couple thousand” transactions per second while Etheruem only makes about 15 of them.
The plans for the development of this new technology started in March 2018 and it took almost a year to get to the current point of development. According to the CEO of Binance, the new chain will offer near-instant transactions and will enable the users to trade their money with even more ease.
According to Zhao, there will be a listing fee of $100,000 USD for any token that wants to be listed on Binance DEX. This will be a necessary high bar in order to block scammers from listing their tokens on the platform.
Concerns About Decentralization
Will the project really be so decentralized as it is promised? The Next Web’s Hard Fork touched on this issue on its report of this story. According to the crypto media outlet, Binance Chain will only launch with eleven network validators and CZ has suggested that the other ones that will come later will be handpicked.
Running pre-approved nodes, according to the media outlet, will let Binance have faster services, however, the model will be fairly more centralized than if everything was left up to the users.
Vitalik Buterin, the co-founder of the Ethereum network, has recently called permissioned blockchain “centralized piles of trash” because they only have a handful of nodes running the whole thing.
In any case, Binance DEX will certainly be more decentralized than the main service provided by the company, even if it is not as decentralized as some people would’ve liked.
The largest crypto exchange in the world is preparing to have a great 2019. Despite the bear market, Binance was actually very successful last year and the company is planning several investments for the year.
For instance, now Binance is rumored to be ready to expand its services into several new countries. Some of them are Lichtenstein, Argentina, Turkey, Russia, and South Korea. At the moment, only Singapore and Malta are officially confirmed, though.
BNB, the token of the company, rose 12% in the last 24 hours started to be traded at $10.80 USD because of the news about the decentralized exchange. At the moment, is the 10th largest coin by market cap.