Binance, one of the largest cryptocurrency exchanges, recently showed a demo of their decentralized exchange (DEX). Company CEO Changpeng Zhao describes its project as a pre-alpha demo, which even at this early stage raised many eyebrows. In the video Mr. Zhao introduced the demo version of exchange that should solve security issues associated with cryptocurrencies. In this stage of development, Binance’s decentralized exchange allows users to create and issue new currencies, list a token on the decentralized exchange, and exchange a token for another token.
Although it looks pretty basic in the video, Binance CEO Changpeng Zhao claims that they are in fact two months ahead of schedule: “Honestly, this happened much earlier than I anticipated. I thought this would happen one or two months later, or more.”
Binance wants to build best decentralized exchange in the world, which might explain the company’s acquisition of Trust Wallet. Trust Wallet is an Ethereum wallet that supports Ether, ERC-20, and ERC-223 tokens. For now, Trust Wallet remains an independent company that will be offered as one of the default wallets on the decentralized exchange.
Decentralized exchange is what everybody wants
There are many reasons why DEX is a popular concept. Decentralized exchanges should be more secure because they allow users to trade assets with other users without entrusting their assets to a third party. This is the opposite compared to their centralized counterparts, which are more vulnerable to hacking. Decentralized platforms allow their users to retain ownership of their coins using private keys, and trade directly via peer-to-peer mechanism. Since DEXs reside on a blockchain, Binance also stated that they are developing their own blockchain. The new blockchain will be called Binance Chain, and will focus on “performance, ease of use and liquidity”.
Although centralized exchanges are more secure than one might think, there are many cases of hacks. According to The Wall Street Journal, “cryptocurrency worth more than $15 billion at peak prices has been stolen.” In a decentralized exchange system that problem will be mostly solved. If everything goes as planned, Binance would be the first major crypto exchange to provide a widely accessible decentralized exchange. In the future we can expect to see what the relation between the centralized and decentralized Binance exchanges will be. The statement says that both “will co-exist in the near future, complementing each other, while also having interdependence”. Is the hybrid exchange next big thing in the crypto world?
Source: Crypto Insider