Binance, the world’s largest crypto exchange, has launched an initial version of its highly anticipated decentralized trading service (dex), which is available now at testnet.binance.org.
The launch — which is initially a testnet as the URL suggests — has been a long time coming and is designed to complement the main Binance exchange, which does around $1 billion in daily trading volumes, according to data from CoinMarketCap.com.
That core service is centralized, like most others, meaning that the exchange manages its customers’ fiat or cryptocurrency balance for them. Centralized exchanges also set the price, pick the selection of assets on offer and make money from transaction fees. Some see that as necessary, but others disagree. Ethereum creator Vitalik Buterin went so far as to say that centralized exchanges should “burn in hell” for their controlling position.
That, as seasoned crypto traders will tell you, leaves customers open to losses from hacks, shutdowns or other kinds of unexpected issues. Common advice is for users to take control of their own cryptocurrency and manage it via a wallet. That’s where a dex comes into play, because it allows users to trade directly from their wallet, as opposed to the cumbersome exercise of transferring tokens into an exchange to trade and then withdrawing them afterward. So the Binance dex is a direct complement to its centralized exchange and it gives customers more options.
Binance also claims that it offers speed.
“Binance Chain has near-instant transaction finality, with one-second block times. This is faster than other blockchains today,” said Binance CEO Changpeng “CZ” Zhao in a statement. “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.”