In an early informal demo, crypto exchange Binance showed off some basic features in development for their new decentralized exchange (DEX), Binance Chain.
The demo demonstrates the issuing of a new coin, listing that coin with an exchange pair, then trading of the coin through a sell order and a buy order.
While those features aren’t much to write home about especially in their rough command line forms with little to no user interface, what is impressive is how quickly the development of Binance Chain has come along.
Binance CEO, Changpeng Zhao mentioned that the team working on the development is much further along than he expected, noting that he didn’t think they would reach the stage until “1 to 2 months later or more”.
Decentralization Maximalism or Will Crypto Need Some Centralized On/Off Ramps?
Announced in March 2018, Binance Chain would open up Binance to a new breed of crypto users aiming to always be in control over their coins as opposed to trusting a centralized exchange to handle transactions and have custody of their crypto assets.
Decentralized exchanges or DEXs work by using a public blockchain to record transactions between cryptocurrencies and transfer the results of the transaction to users’ personal wallets. On the other hand, centralized cryptocurrency exchanges like Coinbase, Coinsquare and Binance give users the ability to transact and exchange but do so on private servers and typically offer users the ability to store their crypto assets on those private servers as well.
Centralized exchanges have come under scrutiny recently from the likes of Ethereum creator Vitalik Buterin who said in an interview he hoped “centralized exchanges burn in hell”.
But Zhao sees a future where both centralized and decentralized services can coexist and responded to Buterin’s comments on Twitter:
Got asked a few times, re: “Vitalik’s burn in hell”.
Let’s not wish others to "burn in hell". Let’s have a bigger heart, and appreciate the fact that we are part of an eco-system… pic.twitter.com/4QYGKus0Gk
— CZ (not giving crypto away) (@cz_binance) July 10, 2018
DEXs like Binance Chain Can Reduce But Not Eliminate the Risk of Hacks
But just because an exchange is decentralized doesn’t make it or its users safe from potential hacks. As was seen with the recent attack on Bancor, flaws in the code of the decentralized exchange and its interfaces can still be exploited.
Binance’s Decentralized Future
Regardess, Binance seems to be taking a stance that more decentralization is good for the crypto ecosystem.
After investments in the decentralized Founders Bank and the rapid development of their Binance Chain decentralized exchange, the private company is clearly looking for growth opportunities aligned with the crypto preference for independence from reliance on any third parties.
Given that Zhao told Bloomberg in July 2018 that the platform at the time had 10 million users and he was projecting up to $1 billion in profit for 2018, clearly the company has demonstrated its competence and there is no reason to doubt that Binance Chain won’t see the same kind of success.