Binance, the world’s largest and most popular cryptocurrency exchange, will be launching the testnet of their very own blockchain “Binance Chain.” Its first use case, the Binance DEX (decentralized exchange), will launch on February 20, 2019.
Why Is Binance Launching a DEX? What Are the Benefits?
As the price of Bitcoin and cryptocurrencies across the board plummeted from all-time highs throughout 2018, Binance kept busy building and launching new products and services. The popular crypto exchange has already accomplished so much and continues to push the boundaries on what they can do.
Now, just hours away, is the launch of the Binance Chain testnet, which for the first time will allow public testing of the highly anticipated Binance DEX.
The Binance DEX aims to carry over the best features of Binance’s centralized exchange and offer them in a decentralized setting. The primary reason for doing this is to offer traders a far greater level of security, privacy, and trust.
As put by Binance in a blog post published on February 18:
“A DEX is a great manifestation of Binance’s mission to spread the freedom of money. With a DEX, a person fully holds his crypto funds and directly plug into the network to trade without needing to provide personal information.”
Moreover, a DEX is run by distributed nodes and codes around the world rather than a centralized entity that may be subject to downtimes. Therefore, a good DEX should be more secure and reliable while protecting the user’s privacy.
Will Binance Chain and Its DEX Be a Success?
Decentralized exchanges are nothing new. The industry currently has multiple DEXs available to trade on, but none of them has the substantial trade volume that centralized exchanges do.
This is largely because existing DEX platforms are less intuitive and user-friendly compared to centralized platforms. They also face speed and liquidity issues which hinder user adoption and prevent the platforms from growing.
Binance is fully aware of the existing issues in the DEXs we have today, but they have the experience of running one of, if not the most successful cryptocurrency exchange in the world. Binance has millions of customers and processes billions of transactions, and they know what it’s going to take to make the Binance DEX a success.
Binance CEO Changpeng “CZ” Zhao assured users via blog post that Binance Chain can handle the volume they expect to have:
“Binance Chain is a very simple chain in terms of application, but it can handle very large loads. It is our opinion that the load is more important than the features.”
All in all, it appears that Binance Chain will be a very simple and clean blockchain with high performance. The DEX may not have all of the bells and whistles right off the bat, but if it works fast and smoothly, Binance will consider it’s launch a success.
Will you be testing out the Binance DEX when the Binance Chain testnet goes live? Will this DEX become the most successful and popular crypto exchange yet? Let us know what you think in the comment section below.