- CZ Binance replied to a tweet of a post that reviewed Binance DEX in depth
- The report pointed out features of Binance DEX that translate to the exchange posing a centralized control in the crypto market
- The review summarized that the only way for Binance to benefit more, they should embrace this centralized notion
On Feb 19, 2019, the founder and CEO of Binance, Changpeng Zhao, reacted to an analysis that suggests Binance DEX will be an evolution of an established centralized business rather than what it was hyped to be as a “decentralized revolution.”
Details of the Analysis
The review read that Binance’s DEX and Binance chain are correlated and since Binance already has a token, (BNB) running on Ethereum chain, the uncertainty surrounding existing coins after the upgrade scheduled for next year, it’s only right that Binance should distance themselves from the far-fetched hopes without a stable platform.
pretty good analysis. Thanks,
— CZ Binance (@cz_binance) February 19, 2019
Based on Binance’s CEO, CZ, the following pinpoints were gathered in the report:
- Mobile wallet support from the start. Binance owns trust wallet; it is thus right to assume that this mobile wallet will support Binance chain.
- Token transfer fees. It is yet to be known whether Binance will claim the fees or not.
- Thousands of transactions in a second. However as with anything you want, you got to pay for it, Binance chain seems to pay with decentralization.
Crypto genius Nakamoto, or the Ethereum developers should have figured out how to attain the same performance numbers and safety, but decentralization is not cost-free; it is a feature, and you pay for it by being vulnerable (potentially) to 51% attacks.
Though Binance chain is close to its implementation, it is doubted whether they will be allowed to have the one-second blockchain since the public internet is too slow for this.
On the other hand, regarding Binance DEX as an app running on Binance chain, the review revealed that;
- Binance DEX will be interlinked with Trust Wallet. The exchange may seem like the most significant feature on Binance, but the convenience is far much bigger. It is a long tiring process to download and install these wallets, but with Binance you buy the coin using your credit card.
- Binance Chain is said will support token creation and not smart contracts. This will significantly limit the type of tokens Binance supports. It is clear that Binance doesn’t care about decentralization but deeply cares about having multiple tokens for trade.
- Binance DEX will support all tokens listed on Binance. Binance DEX is not replacing the Binance exchange as it may seem, but rather it is replacing the user account model which are insecure with asymmetric cryptography making the transaction smoother and secure.
This means that Binance may gain a broader market share in the crypto world. Another advantage for the Binance customers is that losing their private key (account) all you lose are the tokens on Binance chain, but the BTC remain in Binance’s vault.
The review aimed at showing how Binance DEX could benefit more if the exchange admitted they pose a centralized control. In which case, they would be able to serve its customers maximally and improve transparency at the same time.
So, with CZ tweet; “pretty good analysis. Thanks” it is not clear if he agrees to the analysis or not, but he seems to like it.