By
Chimamanda U. Martha
April 25th, 2024
Binance launched its much expected decentralized exchange (DEX) to increase security and efficiency of its services and the markets love it with the BNB coin appreciating by over 75% within days.
The biggest crypto exchange worldwide, Binance, launched its much anticipated decentralized exchange (DEX) testnet. Since December there were rumors about the launch date of the testnet. As we reported last week, Binance confirmed the dates of the release of their DEX for public testing. According to the Binance CEO, Changpeng Zhao (CZ), the DEX will majorly prioritize security, speed, and user-friendliness.
The new elements lack in most of the existing decentralized exchanges operating in the global market. The CEO said:
“The user interface on Binance DEX is similar to the interface of Binance.com, fast, secure and user-friendly. We envision the Binance Chain to help grow the community and further crypto adoption and accessibility.”
According to the exchange, the new platform powered by Binance Chain is available to the customers already. Binance Chain is a new blockchain and peer-to-peer (p2p) distributed system. Users can now create wallets and start exchanging their tokens on the Binance DEX testnet. Zhao explained that the new platform will enable users to regain full control of their private keys. He added that:
“At this stage, we simply want to develop the best DEX as fast as possible. We are still figuring out some functions as we go and will be asking traders for feedback on the testnet, in order to iterate and improve on it quickly.”
Binance May Become the First Successful DEX
Many DEX-focused projects have launched all through the past 12 months. The emergence of DEXs on the Ethereum blockchain network inspired most of these projects. Most of these inventions have struggled to appeal to most users despite the huge demand from the crypto community investors.
These trading platforms need to feel the same since not many will switch from centralized exchanges just because of decentralization. They also must have incentives for existing users to prompt them to move from the centralized to the decentralized exchanges. In the case of the Binance DEX, speed is the major incentive matching every aspect of the centralized exchanges.
The DEX will let users gain full control of funds via the use of non-custodial wallets. It will also offer larger liquidity of many crypto assets in the long-term. Binance Chain is custom-built for DEXs with one-second block times coupled with a large transactional capacity. As explained by Zhao:
“With the core Binance Chain technology, Binance DEX can handle the same trading volume as Binance.com is handling today. This solves the issues many other decentralized exchanges face with speed and power.”
The scalability-focused network of Binance Chain will let DEXs process trading volumes equalling the centralized exchanges. Zhao is confident that the Binance DEX will be a success. He also believes that his company can thrive in any dear market irrespective of its severity. As we published, the CEO hinted of a future partnership with Ripple to utilize the cross-border payment platform xRapid.
Market Reactions
Since January 30, less than three weeks to the launch of the testnet, the price of Binance Coin (BNB) rose from $6.2 to $10.97. The increment represents over 76% appreciation against the US dollar. The next phase of the growth of the token will make it the native asset on DEX and Binance Chain.
Currently, the company is involved in a coin burning process where the asset supply is burned using the profits generated by Binance. The rapid increase of the BNB price shows the confidence of the holders and users of the digital currency. Thus, the long-term prospect of the blockchain network and DEX is expected to thrive. The developments, partnerships, and additions by Binance are responsible for the steady growth of this company.