A day after announcing a $250,000 bounty to anyone who could provide information about the hackers responsible for the hacking incident on March 7, Binance has declared that they are planning on implementing a Decentralized Exchange.
Binance, is by far one of the biggest cryptocurrency trading platforms in terms of trading volume. According to the announcement made on March 13, Binance has been formally working on creating a public Blockchain to make a brand new decentralized cryptocurrency exchange. This public Blockchain will also be a host to BNB (Binance Coin), which is projected to be a native coin with its own Blockchain mainnet.
Binance, in their official statement, mentioned that “We believe that continuously supporting high-quality blockchain projects is the best way to develop this industry. We will continue to improve this part, as we committed in our whitepaper.”
With this move, the Exchange intends to transform from a company into a community. Binance also intends to create a Binance Chain which is inspired by their vision that “centralized and decentralized exchanges will co-exist in future, complementing each other.”
The major difference between the centralized and decentralized exchanges is that the latter doesn’t depend on third-party services to manage customer’s funds and accounts. The users can directly initiate and complete transactions among themselves without the need for a central authority. Which means that there is no central server facilitating the processing of trade orders.
While this concept of decentralized exchanges brings in more security and anonymity, they are less user-friendly and lack features, unlike their centralized counterparts. Platforms like BitShares, CounterParty, and NXT have already successfully implemented the concept of decentralization of their exchanges.