The world’s largest crypto exchange by daily trading volume, Binance, will be launching the beta version of its decentralized exchange (DEX), mostly by early 2019.
The CEO of Binance, Changpeng Zhao aka CZ, stated on Saturday:
“Just had a productive meeting for Binance DEX (decentralized exchange), where BNB will be native gas, and the exchange don’t control user funds. Aiming for a public beta end of the year/early next year. Yes, we work on Saturdays, non stop.”
Back in July, CZ appeared on CNBC Crypto Trader hosted by Ran Neuner and expressed his interest in technology and noted that decentralized exchange is the future of crypto. He explains that it will enable the user to utilize non-custodial wallets to trade cryptocurrencies in a peer-to-peer manner with full control over their funds. He stated:
“I believe that decentralized exchange is the future. I don’t know when that future will come yet. I think we’re at an early stage for that so I don’t know if it’s a year, two years, three years, or five years. I don’t know but we got to be ready for it.”
A centralized cryptocurrency exchange generates its revenues and profits by charging fees. While a decentralized exchange can also charge a native fee embedded into the smart contracts used by the platform to broadcast transactions to the mainnet of public blockchain networks such as Ethereum.
Last year, in October, Vitalik Buterin, Ethereum co-creator took to Twitter to appraise EtherDelta, a decentralized exchange, as the model has incentivized developers for maintaining the platform.
I think the https://t.co/X1GnJmkC5U model for developers getting paid is underrated. https://t.co/Nt3duMYOVX
— vitalik.eth (@VitalikButerin) October 8, 2017
Around the same time, a South Korea-based cryptocurrency user Tweeted to Buterin and suggested home to choose Binance due to its 0.05% fee. Buterin supported decentralized exchanges, citing that centralized exchanges require a process of setting up accounts whereas the former uses existing wallets like MetaMask to trade. He explained:
“That requires setting up an account. I like EtherDelta precisely because it doesn’t. Just visit the site with MetaMask on and start using it. Not slow at all. I don’t give a damn about split-second trading. To me, speed includes login, deposit, withdrawal, logout time.”
CZ claims that Binance is a more secure alternative to decentralized exchanges due to its strong architecture and infrastructure. He notes that since its launch in 2017, Binance has never faced a hack.
According to CZ, the key feature of decentralized exchanges is that it lends the user complete freedom and control over their funds. Users are not mandated to create user accounts or file withdrawal requests; every trading activity is performed with a non-custodial wallet on the blockchain itself.
As and when the adoption of cryptocurrencies increases to a level where fiat becomes less relevant in the cryptocurrency exchange market, traders would more likely prefer decentralized exchanges. While the tentative timeline for the change hasn’t been disclosed as off yet, CZ remains hopeful that it will be soon.
Read more: Binance CEO CZ doesn’t “Understand Why the Bitcoin Price Isn’t Shooting Through the Roof”
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