Binance DEX launches – DEX, a decentralized exchange, will be immensely popular moving forward. Binance’s DEX was launched earlier today following the release of Binance Chain’s mainnet launch.
Binance’s DEX is a non-custodial and decentralized exchange that operates on top of the Binance Chain blockchain protocol. It enables users to trade crypto assets while maintaining full control over their funds at all times. Trades are executed in the blockchain.
Chanpeng Zhao, aka CZ, the CEO of Binance, remarked to CCN that engineers have worked to develop a DEX that will maximize speed, scalability, and efficiency of the platform.
Throughout the years of Cryptocurrency’s birth in 2008, many decentralized exchanges have emerged on various blockchain networks, including Ethereum. The rise of DEX’s stem from the fact that users are able to control their funds and trade cryptocurrencies simultaneously.
The most glaring issue of DEX’s, however, was User Experience (UX) and User Interface (UI). The allure of complete control over private keys and funds may be enough to drive experienced traders from centralized platforms to decentralized exchanges. However, as UX and UI degrade, the appeal of DEX’s decline as well.
Exchanges with poor UI and UX led to a drop in user activity which resulted in an issue of liquidity, forcing the exchange to close.
Coinbase co-founder Fred Ehrsam said:
“There are some drawbacks. Decentralized exchange requires users to manage the security of their own funds and tools for that are immature. They currently have low throughput and face the same scalability challenges as their underlying blockchains, so those wanting low latency and high throughput will prefer centralised exchanges for quite a while.”
The key for a DEX to thrive is to have the same standard as centralized exchanges in areas that most traders care about, including UI, UX, scalability, and efficiency. Those things can be difficult to execute in a DEX, however. Therein lies the issue for DEX’s.
The Binance Team has confirmed that during the testnet phase of the Binance Chain blockchain protocol, around 8.5 million transactions were processed in a simulation. This number is more than sufficient to handle the large demand from traders. CZ also said that the Binance DEX team would continue to work closely with projects and teams to help grow the DEX ecosystem and to provide a seamless and comfortable experience to users that will allow more control of their own funds and assets.