By The world’s biggest cryptocurrency by volume Binance is gearing up to launch the beta version of their decentralized exchange (DEX) by early 2019.
The CEO of Binance Changpeng Zhao affectionately known to investors as CZ said this 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.”
Why Is Binance Making The Move To A DEX?
Back in July, CNBC Crypto hosted Ran Neuener interviewed CZ where he stated that he believes decentralized exchanges are the future of crypto.
CZ explained that users will be able to use non-custodial wallets to trade crypto in a p2p fashion with full control over all their funds.
“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,” he said.
With centralized exchanges, most of the revenue & profits are garnered by the fees generated by the exchange. On the other hand with decentralized exchanges, a native fee can be charged as they’re embedded into smart contracts on the platform which broadcast transactions to the main net of public exchanges such as Ethereum. 
Back in October 2017, ETH co-creator Vitalic Buterin gave praise to a model which is used by EtherData, a decentralized exchange, in order to incentivize developers for the upkeep of the platform.
“I think the EtherDelta model for developers getting paid is underrated,” said Buterin.
Also at this time, a South Korean cryptocurrency user recommended Binance to Buterin on Twitter, mentioning the low 0.05% fee and Buterin responded by stating that in order to successfully use centralized exchanges, a process of properly setting up accounts is inevitable. While with decentralized exchanges, traders & investors are able to make use of any existing wallets such as MetaMask in order to carry out transactions.
“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,” Buterin went on to explain.
Decentralized Platforms VS Centralized Platforms:
CZ claims that Binance is a more secure alternative to decentralized exchanges in part thanks to its architecture & infrastructure. One must also note the Binance has never been hacked since its inception in 2017.
Freedom & control over one’s funds is the selling point of decentralized exchanges according to CZ. With decentralized exchanges, users need not create user accounts or file withdrawal requests. All trading activity is done over the blockchain through the use of non-custodial wallets.
In time, as the adoption of cryptocurrencies increases & fiat becomes irrelevant in the crypto market, most traders will more than likely switch from centralized platforms to decentralized exchanges.
While Binance is uncertain when this change might occur, CZ claims that they are gearing up for when it does.
Will decentralized markets become the main form of trading platforms? Do you think that this change will be good or bad for the market? Let us know your thoughts.
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