As Projects Flock to Binance Chain, Its DEX Has a Lot to Live up To
You wouldn’t know to look at it, but Binance DEX could soon become the busiest exchange in the cryptosphere. At present, MITH is the only token tradable on there, though it will soon be joined by NOW – the first token to be added to Binance Chain – plus hundreds more if exchange boss CZ has his way. But how accessible is Binance DEX, particularly to users of countries that are denied access to centralized exchanges? And exactly how decentralized is Binance DEX?
Binance Wants to Make DEXs Sexy
Characterized by poor UX, low liquidity, and slow onchain order execution, decentralized exchanges (DEXs) aren’t much fun. Binance DEX promises to change all that, with an interface that resembles its parent exchange, and block times of just a few seconds ensuring trades are settled rapidly. Cryptocurrency projects seem sold on it, at least, with dozens having already applied to join Binance Chain and be listed on its DEX. The first project to be officially added to Binance Chain, Change Now, is in the midst of initiating a token swap, and appears destined to join the DEX next, based on tweets from Binance CEO Changpeng Zhao and sentiment expressed on Binance Community. There it will join mithril (MITH), which is currently trading on Binance DEX against BNB.
There’s not much to do on Binance DEX at present other than create a wallet and acclimatize to its layout and ordering procedure, before waiting for projects migrating to Binance Chain to complete their token swaps. In addition to Change Now, whose Now Swaps service has also been assisting with the BNB token migration, CZ has spoken of welcoming multiples more projects onto Binance Chain and its corresponding DEX than are currently listed on the main exchange. In the weeks to come, the trickle of tradable projects on Binance DEX looks set to become a torrent.
— CZ Binance (@cz_binance) April 25, 2019
Getting Started With Binance DEX
A wallet creation tutorial guides beginners through the prerequisites to begin trading on Binance DEX and there’s also a detailed guide to getting started. Users are given three ways to access their wallet: using a keystore file and password, using a 24-word mnemonic phrase, or with a private key. The Binance-owned Trust Wallet, as well as the Coolwallet S and Ledger devices are all supported, enabling users to access the DEX directly from their hardware wallet. Trust and Coolwallet utilize a service called Wallet Connect, which provides DEX authentication by scanning a QR code via the respective mobile wallet.
True Decentralization or Just Window Dressing?
Much has been made of the design of Binance Chain, whose node validators are all controlled by the exchange. In the context of censorship resistance, therefore, Binance DEX, which runs on Binance Chain, doesn’t score highly, but then that was never the intention. The DEX has been designed to facilitate trustless trading without the need to deposit funds, and it achieves that with aplomb.
Binance Chain doesn’t need to rival Bitcoin or Ethereum in terms of decentralization; its primary purpose is to enable the noncustodial exchange of assets. These assets are of course limited to Binance Chain’s native BEP2 tokens. Unless wrapped versions of BTC and ETH are made available on the chain, therefore, leading cryptocurrencies will remain unavailable on the DEX.
As for who can trade on Binance DEX, the exchange has issued no formal guidelines as to which countries, if any, are excluded. With no KYC or registration required to participate, however – not even an email address – anyone can technically trade on the decentralized exchange, with a VPN taking care of any IP blocking that might otherwise stand in the way. Binance caught flak for quietly excluding countries that were subject to U.S. sanctions, such as Iran, late last year. These individuals will be able to trade on Binance DEX in the knowledge that central powers are powerless to seize their funds. If Binance DEX can provide that, it will have justified its existence. Justifying the great expectations surrounding the new decentralized exchange will take longer.
What are your thoughts on Binance DEX? Have you tried it yet? Let us know in the comments section below.
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