Binance one of the leading and promising cryptocurrency exchange is planning to go decentralized soon. The exchange planning for the beta version to go live later this year and early 2019.
The Exchange is famous for its daily trading volume and the number of listed coins. A polling shows that binance is one of the 1st choices for a newbie in crypto exchange — With its simple design and easy to use UI make its promising amongst crypto enthusiast.
Few days back Changpeng Zhao, CEO of Binance twitted:
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!
— CZ Binance (@cz_binance) September 29, 2018
How Binance Decided to go DEX?
Mentioning about CZ, earlier he mentioned that , he believes that the future of crypto is not with the centralized exchange but a decentralized. As the crypto grow to edges the ecosystem has to go decentalized in order to preserve the defination of crypto being “Decentralized“.
He believes that users should have this control to connect their wallet to p2p network where they have control over all 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”.
How Decentralized Exchanges Works?
Talking about DEX or Decentalized exchanges, they are not owned by and firm or company but rather they are controlled by many individuals and smart contracts.
Like IDEX, EtherDelta; uses a model where the exchange fees and the withdrawal fees act as a native fee which goes to a smartcontract which is use to broadcast transactions to the mainnet of public blockchain and hence keeping the exchange live.
What will happen to the BNB Token?
BNB is a ERC20 token with is based on the ethereum blockchain and linked to the smartcontract. User can pay in BNB while trading to get discount from the original transaction fee.
BNB is decentralized token on its own, mean when a user can pay the transaction fee in BNB. The fee goes to the smartcontact rather than Binance’s pocket. The smart contract is same for everyone means no one have control over it.
Later, the smart contract of BNB is designed like a way that its price surge as the number of demand increase.
Holder of BNB will later get the profit by selling their BNB tokens.
The decentralized model of Binance can still use the BNB as intermediately for the fee payment.
Adopting decentalized exchange could be next move for the Binance. As user do not have to create accounts and withdraw request but rather all the activities will be done on the blockchain itself.
Also, decentralized could also make lot of confusions in the beginning with user to learn and use. Hence before going to mainstream requires lot of beta testing and test nets.