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The cryptocurrency trading giant Binance announced Tuesday that it was going to launch its own "custom blockchain" in a first step towards decentralization. exchange (DEX).
The Hong Kong-based company – which ranks consistently among the top three cryptocurrency exchanges measured by the daily volume of transactions – made this announcement in a blog, explaining that Binance Chain "will focus primarily on the transfer and the active blockchain trading, as well as providing new opportunities for the future flow of blockchain assets. "
"Binance was growing too fast, and too busy to start anything else," CEO Changpeng Zhao said on Twitter. "So all we can do is start just another Binance."
The company stated that it made the decision to launch Binance Chain after conducting extensive research on existing DEX frameworks.
Decentralized exchanges allow users to negotiate cryptoassets without entrusting their coins to third parties, whose centralized platforms provide hackers with lucrative attack vectors and have collectively lost more than $ 1 billion worth of credit. 39, assets during the short history of the industry.
The most well-known DEX is EtherDelta, which uses smart contracts to allow users to exchange ERC20 tokens, all of which run on the Ethereum blockchain. DEX platforms are not completely secure because their website servers are centralized, but they are much less vulnerable to large scale flights than conventional exchanges.
The reason that existing DEX platforms are not used more widely is that, overall, they can only be used to exchange assets that operate on a common blockchain. Technology upgrades like the Lightning Network (LN) promise to make cross-blockchain transactions – called atomic trading – more accessible, but these technologies are not yet ready for production.
It is not yet clear how Binance's DEX will work, although it seems that it will exist alongside the company's centralized stock exchange in the foreseeable future.
"The centralized and decentralized exchanges will coexist in the near future, complementing each other, while having an interdependence," the company said, adding that more details on Binance Chain would be published in the coming days.
Binance Coin (BNB), which is currently built as an ERC20 token, will be reissued as Binance Chain's native asset, and Binance – the post says – "will go from business to community." ".
Notably, OKEx – another of the three major Hong Kong-based cryptocurrency exchanges – recently launched its own utility token and said it would create its own public blockchain, tentatively called OKChain.
Image from Shutterstock.
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