Binance Launches DEX Testnet, A Better Approach to Win in the Crypto World
Binance, one of the world’s foremost cryptocurrency exchange has launched the testnet of its new decentralized exchange Binance DEX on Feb. 20.
This initiative causes much discussion in the crypto world. People are wondering why the major centralized exchange chooses to launch a DEX project which is unpopular at this stage.
As we all know, despite the large demand from crypto investors for decentralized exchanges, most DEXs have struggled to attract users. According to data from DappRadar, the daily trading volume of the existing DEXs are fairly small: only seven DEXs’ 7-day trading volume reaches $1 million, which is negligible compared to the mainstream centralized exchanges.
Although the centralized exchange has been criticized for the potential risk in assets security, and the infamous Mt. Gox incident and the BitGrail incident are all the painful lessons, most crypto investors still prefer to trade in a centralized exchange in order to get better user experience.
Nevertheless, Binance CEO Changpeng Zhao, better known as CZ, always believes that the decentralized exchanges will be the mainstream of the digital assets trading market in the future. The exchange is powered by Binance’s own public blockchain Binance China, and it will support secure decentralized software and hardware wallets. Users will be able to hold their own private keys and manage their own wallet.
“Binance DEX provides a different balance of security, freedom, and ease-of-use, where you take more responsibility and are in more control of personal assets,” said CZ.
Obviously, it may be hard for a newcomer to found a DEX, but Binance has done all the early-stage preparations for Binance DEX. The custom-built Binance Chain for its decentralized exchange enables Binance to overcome the most general disadvantage of decentralized exchanges.
“Binance Chain has near-instant transaction finality, with one-second block times. This is faster than other blockchains today. With the core Binance Chain technology, Binance DEX can handle the same trading volume as Binance.com is handling today. This solves the issues many other decentralized exchanges face with speed and power,” CZ explained.
In addition, Binance also launched its native currency Binance Coin (BNB). The BNB also plays its role as the native asset on Binance Chain and DEX which ensure the decentralized exchange to meet the underlying consistency with Binance centralized exchange.
The price of BNB represents the confidence of BNB holders and exchange users, which shows most people are satisfied with Binance’s recent strategy.