New Binance DEX preview shows off Binance Chain functionality
For the big picture, consider how this will work alongside other developments like security tokens.
Binance has just shown off a new preview of the Binance Decentralised Exchange (DEX) and the Binance Blockchain powering it. The video features a developer walking through the testnet exchange and block explorer.
Binance DEX is scheduled for release in early 2019.
It might look familiar to those who are already quite familiar with Binance, and it seems users can look forward to the same range of advanced trading features on the DEX as they'll find on the centralised counterpart.
The "only real difference aside from layout changes is that there is a balances tab on the bottom channel," the narrating developer notes. "Another change is that there is a user icon in the top right corner which tells me my wallet address."
There will be some major extra functionality though, and in addition to sending, receiving and trading BNB, Binance DEX users will also be able to issue new tokens, send, receive, burn and freeze/unfreeze tokens, and propose to create new trading pairs between different tokens.
And in contrast to the centralised exchange, the DEX is expected to be maintained as a community project.
The decentralised exchange will be maintained as a community project, able to develop with ever-improving technology stack and architecture. The Binance Blockchain itself is envisioned as supporting a range of tokens with BNB as the native coin.
Accordingly, BNB, which is currently an ERC20 token on the Ethereum blockchain, will be migrating to the Binance blockchain as it goes live. In addition to undoubtedly being the native financial staple, it will be useable to pay the platform fees. The video shows it as a flat 0.1 BNB for Binance Blockchain transactions.
The video also takes a moment to show off the accompanying block explorer, which will let people explore their own orders as well as show the other tokens issued on Binance chain.
The big picture
In the long run, this kind of platform might be an extremely powerful tool. First, its association with Binance – the world's largest exchange by trade volume – could go a long way towards helping it overcome some of the limitations that have dogged other decentralised exchanges to date. Most notably, low liquidity.
It will also have the advantage of having access to an active, keen and thoroughly global userbase of Binance users.
Perhaps more importantly, it can also take advantage of the regulatory legwork done over the last year, especially in the field of security tokens. With the Binance DEX launch right around the corner, it could feasibly become one of the world's first decentralised security token platforms. The emphasis on token issuance and management seems tailor-made for businesses to launch and manage security tokens.
And then there are the benefits of Binance's growing banking arrangements and growing selection of fiat pairs. These arrangements include a stake in the Malta-based Founders Bank, which aims to become a kind of decentralised neobank, and might imbue Binance with the ability to push its blockchain and DEX quite strongly towards the world of traditional finance.
Looking at the arrayed pieces, it might also be reasonable to predict that Binance will be issuing its own collateralised stablecoins down the line. In the most ambitious extremes, it might not be too much of a stretch to see Binance becoming something akin to a semi-decentralised multinational central bank in its own right.