Binance to Launch Decentralized Exchange
World largest crypto exchange announces plan for new decentralized trading platform based on blockchain technology.
The largest Chinese cryptocurrency exchange Binance said on Tuesday it will launch a decentralized exchange, Binance Chain, with the aim of transforming itself from a company to a community.
The world’s largest crypto exchange by volume said in a statement it has decided to use a public blockchain because this “technology will change the world”.
Binance Chain will operate in parallel with the existing centralized exchange and will focus on transfers and trading of blockchain assets.
Binance own cryptocurrency, Binance Coin (BNB), will be upgraded to exist in its own blockchain mainnet. BNB soared some 35% to a peak of USD 11.00 immediately after the announcement.
Centralized or decentralized exchange
“Binance was growing too quickly, and too busy to start anything else. So, all we could do is, to just start one more Binance,” Binance’s CEO Zhao Changpeng tweeted.
The blockchain`s model.
Decentralized exchanges have no control unlike the tight rules on centralized ones: “That’s the philosophy of the decentralized exchange, it’s freedom of choice, freedom of investments,” explained Changpeng. Binance Chain will be opened to every coin.
On the other hand, decentralized exchanges are less intuitive for beginning traders because everything falls on their shoulders from the first seconds. These platforms also lack some of the features and functionality of centralized exchanges, which could impact growth of the market.
Decentralized exchanges eliminate third parties` role and users can trade crypto assets directly. Centralized exchanges are an easier target for hackers. Around one million bitcoins have been stolen so far, including through more than 30 cryptocurrenncy exchange hacks like those on Mt. Gox, Coincheck and BitGrail.
On Sunday, Binance offered a USD 250 000 equivalent bounty to anyone who supplies information that leads to the legal arrest of the hackers involved in a hacking attempt on Binance on March 7. In a statement, the exchange added it has allocated the equivalent of USD 10 million in crypto reserves for future bounty awards against hacking attempts.
“We have also invited other exchanges and crypto businesses to join our initiative,” Binance said.
The Hong Kong-based exchange was target of a large-scale phishing and stealing attempt, but assured that all “funds are safe”.
Binance Chain will face some established competitors in the decentralized exchange field like Waves DEX, BitShares, NXT, CounterParty.
The announcement came at the same time as UK-based Coinfloor said it will launch physically settled Bitcoin futures.
In December 2017, two traditional futures exchanges, Cboe Global Markets Inc. and CME Group Inc, started offering Bitcoin futures. Actual cryptocurrency does not change hands because these futures are settled in cash.
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