Binance founder, Changpeng Zhao, has taken to Twitter to show users a preview of their decentralized exchange. The video is extremely rudimentary, and the exchange appears to not have any form of UI just yet as it is in its pre-alpha stage, but it shows fans the companies progress. This video appears to be aimed more at developers than consumers and traders. The video acts as proof of how far Binance is towards releasing their decentralized exchange.
What do we learn from the video?
While the video is somewhat short, it does contain some useful information. The main takeaway is that coin owners may be able to list their own coins to the decentralized exchange with ease. However, we do not know if a fee will still be incurred, as it is with the centralized version of Binance. We can also draw the conclusion that the decentralized exchange is not too far away from having a public release. As Changpeng Zhao noted in the video, the project is much further ahead of schedule than expected. Plus, the fact that some elements are already working through command line means that a major part of the decentralized exchange is already completed. Generally speaking, it is easier to create a front-end design for a project (such as a UI) than it is to create the back-end components. It is great to see that the team focused on the hardest parts first.
What we don’t know just yet is what type of blockchain the decentralized exchange will run on. If it runs on Ethereum, then it may be limited to only listing ERC-20 tokens. If it runs on its own blockchain, then there is a chance for cross-chain trades. This is what most people want.
Why is Binance creating a decentralized exchange?
Some people might be asking ‘why is Binance trying to make a new exchange when they already have a fully functional one?’ While it is true that the Binance centralized exchange is extremely competent and popular, there is still a huge demand for a decentralized exchange to exist. People are often critical of centralized exchanges as they cannot live up to the principles of blockchain technology. At the heart of blockchain and cryptocurrency, there is the desire to be distanced from centralized bodies. The fact that centralized exchanges are so popular goes against the ethos of the technology.
When asked via Twitter, what would happen to the centralized Binance exchange after the decentralized one is released, Zhao stated that he will “let the market decide” and that he expects “they will co-exist for some time“.