w2yu.com

Binance Decentralized Exchange (DEX) Overview

Binance DEX – a new product for cryptocurrency trading from Binance, the largest crypto exchange by overall volume.

DEX abbreviation stands for “decentralized exchange” – an opposite governance model of a centralized exchange driven by the community desire to have more control over account balances and bring decentralization-based to the cryptocurrency trading market.

CEX & DEX Differences

  • There is no such thing as a central regulator, DEX is governed by the community of traders & validating nodes
  • Currency exchange takes place directly between users
  • DEX-exchange has no wallet, all funds are stored on user personal wallets

Binance Chain Explained

Binance DEX (Decentralized Exchange) & Chain Overview – Changelly

Binance Chain is a blockchain software system initially developed by Binance and the community. Binance Chain is a community-driven development project with many developers and contributors from all over the world. Binance DEX is the decentralized exchange feature developed on top of the Binance Chain blockchain.

The Binance DEX is built on top of a Binance Chain blockchain with BNB as a native cryptocurrency. Therefore, any BNB transaction associated with the DEX could be found in Binance Chain explorer – https://explorer.binance.org. There is no evidence of a single Binance Chain whitepaper except the official documents section.

Binance Chain Design Principles

The Binance blockchain utilizes Tendermint Byzantine Fault Tolerance (BFT) consensus. Schematically, the blockchain’s architecture is as follows:

Binance DEX (Decentralized Exchange) & Chain Overview – Changelly

The Binance native blockchain was made on purpose in tight collaboration with the Binance exchange community to provide:

  • Safety of traders’ funds – you’re in full control of your private keys
  • Fast, reliable and decentralized matching engine: goal is to achieve 1 second block times, with a single confirmation.
  • Low fees for all BNB holding traders as well as solid liquidity on all trading pairs
  • Fair and convenient trading process for all market participants, whatever that means
  • Scalable and flexible blockchain-based system for further development of the cryptocurrency trading market

What can you do on Binance Chain?

  • Send and receive BNB
  • Issue new tokens
  • Send, receive, burn/mint and freeze/unfreeze tokens
  • Propose to create trading pairs between two different tokens
  • Send orders to buy or sell assets through trading pairs created on the chain

If you’re interested in supporting Binance Chain as well as all cryptocurrencies working on it, follow the guidelines on how to run a full node.

Binance DEX Governance

Every BNB coin owner (now native to Binance Chain has successfully migrated from Ethereum’s ERC-20 to BEP2) has the right to submit proposals for listing/delisting trading pairs on Binance DEX, issuing new tokens, etc.

That’s how the proposal looks like on Binance Chain. The deposit threshold for proposals on mainnet is 1,000 BNB.

Binance Exchange VS Binance DEX: Pros & Cons

Binance Exchange Binance DEX
Governed by Binance Holdings Limited under the jurisdiction of Malta Community & qualified nodes
Assets security Funds are held distributedly and managed by the Binance company Each trader has his own connected wallet and full control of his private keys
Amount of coins listed 1,268 coins listed  25 coins listed
Deposits Deposits are made in any cryptocurrency listed on the exchange. Also, there is an option to buy coins directly for USD or EUR. Deposits are made in Binance Coin (BNB) via native Trust wallet or 3rd-party wallet supported by the Binance DEX.
Fees Maker-Taker model; 0.1% general trading fee and a 25% discount if you pay in BNB, plus discounts based on BNB holdings and 30-day trading volume; Withdrawal fees based on current blockchain conditions specifically for each coin. Trading fee is 0.1% for non-BNB payment, 0.04% in BNB; Transaction fees are controlled and regulated by validators (nodes) via proposal-vote procedure. No withdrawal fees at all.
Order matching Orders are matched and processed on Binance servers. Orders are executed by Binance Chain nodes, matching time – 1 second.
Codebase Proprietary software Open-sourced
Listing new assets Officially, there is no minimum or fixed fee for a listing. Some say it costs 400 BTC. Listing fee is fixed to 1,000 BNB.
Margin Trading Margin Trading – Yes No margin trading yet

Trust Wallet

As part of the DEX launch, Binance has developed its own Trust Wallet for storing cryptocurrency. In this article, we will restrict ourselves to a video tutorial on how to start trading on Binance DEX with it.

Conclusion

The structure of Binance Chain is really sharpened to provide fast, efficient and reliable trading within the framework of a decentralized exchange. Moreover, Binance deliberately refused to implement a platform for creating smart contracts in order to concentrate on the trade in cryptocurrencies.

The limited number of qualified Validators and their election means that the exchange is not decentralized in its pure form. Nevertheless, it is challenging to find truly decentralized projects at the design level even among the top 10 crypto projects.

We wish Binance DEX an active development and further prosperity!

Buy BNB at Changelly & trade on Binance DEX

Binance Decentralized Exchange (DEX) Overview

Source:  changelly

|Published on July 12, 2019
Writer

w2yu

w2yu

w2yu