- DEX Testnet launched on February 20, 2019
- DEX gives users more control over assets
- The two exchanges will complement each other
Leading cryptocurrency exchange Binance has finally unveiled the Testnet version of the eagerly awaited decentralized trading platform it has built on its blockchain network. The launch, which has been long in coming, is meant to complement Binance’s main exchange that processes over $1 billion in daily trading volume.
According to the official press release on February 20, 2019, the new decentralized exchange dubbed Binance DEX will be powered by the Binance Chain, the exchange’s new blockchain and peer-to-peer distributed network. The Testnet version is already available to customers at testnet.binance.org, where users will be able to create crypto wallets and can exchange tokens on the DEX.
Control Their Private Keys
The unveiling of the Testnet is a significant step towards the eventual rollout of the MainNet of the decentralized exchange. Binance has stated it will be gathering feedback from the users after which it will be able to announce the date of the final launch eventually. According to Binance CEO Changpeng Zhao, the new exchange gives users complete control of their private keys. He explained:
“Binance DEX is a decentralized exchange with a decentralized network of nodes, where you hold your own private keys and manage your own wallet. With Binance DEX, we provide a different balance of security, freedom, and ease-of-use, where you take more responsibility and are in more control of personal assets.”
Centralized vs. Decentralized
Binance’s main exchange service is centralized, which means it’s the facility that manages its customer’s cryptocurrency or fiat balances on their behalf. Centralized exchanges are also responsible for setting prices, picking the asset pairs on offer besides charging transaction fees through which they make money.
Most seasoned cryptocurrency traders believe the very nature of centralized exchanges leaves customers vulnerable to hacks, shutdowns and several other negative issues.
Complement the Centralized Exchange
Most people believe the solution is to avoid exchanges altogether and manage their digital assets via wallets. The decentralized exchange (DEX), on the other hand, enables users to trade directly from their personal wallets, thereby avoiding the tedious exercise of having to transfer their funds to exchanges for trading and withdrawing them after that. The Binance Decentralized exchange will therefore directly complement its own centralized exchange and offer customers the much-desired option.
According to the Binance press release, the DEX will support secure decentralized hardware and software wallets besides integrating Binance’s Trust Wallet in addition to Ledger’s Nano S Wallet. The company will add more compatible wallets in due course. The launch comes amidst information that Binance was planning to transfer its token Binance Coin (BNB) from being an ERC20 token to become Binance Chain’s native token.