How Binance Decentralized Crypto Exchange Launch in 2019 Will Impact the Market

[bitmover]

how Binance Decentralized Crypto Exchange Beta Launch in 2019 Will Impact the Market
https://www.ccn.com/how-binance-decentralized-crypto-exchange-beta-launch-in-2019-will-impact-the-market/

Binance, the world’s largest crypto exchange by daily trading volume, is set to launch a beta version of its decentralized exchange (DEX) by early 2019.

Changpeng Zhao, the CEO of Binance better known to the community as CZ, said on Saturday:

    “Just had a productive meeting for Binance DEX (decentralized exchange), where BNB will be native gas, and the exchange don’t control user funds. Aiming for a public beta end of the year/early next year. Yes, we work on Saturdays, non stop.”

Why is Binance Launching a DEX?

In July, on CNBC Crypto Trader hosted by Ran Neuner, CZ stated that he personally believes decentralized exchange is the future of crypto.

In the long-term, CZ explained that users will be able to utilize non-custodial wallets to trade cryptocurrencies in a peer-to-peer manner with full control over their funds.

“I believe that decentralized exchange is the future. I don’t know when that future will come yet. I think we’re at an early stage for that so I don’t know if it’s a year, two years, three years, or five years. I don’t know but we got to be ready for it,” he said.

That's indeed good news.
Binance is a very good exchange, and they will probably make a good work with Dex.
As they have money, it can be safe an easy to use. I agree with him, Dex are the future.

 binance has never been hacked, but they have few month in the market.

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[pawel7777]

Smart move, but I wonder what would this change from legal perspective, ie whether Binance would still be required to verify customers ID, since they would be no longer holding funds on anyone's behalf. I'm guessing Yes, as I don't see any government giving green light to non-regulated, anonymous platform, not in a long run that is.

So the main and only benefit will probably be a shift in control/responsibility of one's funds.

On the other hand, this could be just a PR move to prevent people from moving to EtherDelta and alike, or to deter other devs from developing their own decentralised platforms.

[bitmover]

The problem with ether Delta is that you can only trade erc20 token there.

I love services such as shapeshift and changelly. They don't require kyc and are fast, However expensive for high amounts.

Dex will be much cheaper than those services.
Maybe binance will require kyc, but a few months later many other exchanges will copy their model and make other Dez without kyc.

[pawel7777]

...
I love services such as shapeshift and changelly. They don't require kyc and are fast, However expensive for high amounts.

Changelly have transaction limits, which are definitely too low for high profile traders. Shapeshift unfortunately recently shifted their model and now require user verification:
https://news.bitcoin.com/shapeshift-membership-user-information/

Maybe binance will require kyc, but a few months later many other exchanges will copy their model and make other Dez without kyc.

For that reason I don't think Binance will be rushing in making transition. They would have to set their fees pretty low to make it harder for anyone wanting to copy their solutions.

[jseverson]

Considering the demand (or lack thereof) and the number of existing choices for decentralized exchanges, I don't think this move can impact the market in a meaningful way. Not that I dislike the move -- more options is better, just that they'll simply be another competitor for existing options.

But yeah, I guess you never know. Seems like a lot of people are foreseeing a switch in preference to decentralized exchanges. This might be where it starts.

[yitzjoe]

I believe DEX will be a market demand for the next few years to weigh in terms of fund security, full control of funds and more

[Brawnsugar]

With the recent clamp down on 1broker.com using the FBI, here's hoping that the SEC doesn't go after Binance especially as they declined to comply with the OAG's request for certain information regarding their users.

[tee-rex]

Smart move, but I wonder what would this change from legal perspective, ie whether Binance would still be required to verify customers ID, since they would be no longer holding funds on anyone's behalf. I'm guessing Yes, as I don't see any government giving green light to non-regulated, anonymous platform, not in a long run that is.

But that platform, or kind of, has been there for centuries. When you exchange fiat person to person, just like gold and silver coins a few centuries ago, that is a peer-to-peer exchange. How are they going to regulate it? Now, with the advent of cryptocurrencies and Internet, we are taking this exchange to the next level by removing distance from the equation completely. If you ask me, that's a natural course of events, and preventing or hindering it would be like trying to stop a freight train. Typically doesn't end well for those trying.

[Coin-1]

Smart move, but I wonder what would this change from legal perspective, ie whether Binance would still be required to verify customers ID, since they would be no longer holding funds on anyone's behalf. I'm guessing Yes, as I don't see any government giving green light to non-regulated, anonymous platform, not in a long run that is.

Probably yes, the Binance developers will collect much crypto currencies to their DEX platform and then the government will prohibit their maintenance without verification, so coins of customers who do not want to pass the KYC procedure will remain on this trading platform forever.

On the other hand, this could be just a PR move to prevent people from moving to EtherDelta and alike, or to deter other devs from developing their own decentralised platforms.

I quite often trade on Etherdelta. There are many ERC20-tokens in this DEX. The platform works not quick. Unfortunately, sometimes the new made bid/ask orders do not appear in the list.

[pawel7777]

...
But that platform, or kind of, has been there for centuries. When you exchange fiat person to person, just like gold and silver coins a few centuries ago, that is a peer-to-peer exchange. How are they going to regulate it? Now, with the advent of cryptocurrencies and Internet, we are taking this exchange to the next level by removing distance from the equation completely. If you ask me, that's a natural course of events, and preventing or hindering it would be like trying to stop a freight train. Typically doesn't end well for those trying.

You may be confusing peer-to-peer with decentralisation, these 2 doesn't necessarily go in pairs. Binance is/will still be a central entity providing platform for P2P traders and as such, they could be forced to impose limits and comply with KYC requirements.
Even Localbitcoins seem to require ID verification above certain threshold: https://news.bitcoin.com/significant-trade-volume-triggers-localbitcoins-kyc-requirement/

I think this is still a 'grey area' in many jurisdictions, up until cryptos were introduced - such activities were simply not possible to do online.

Anyhow, the good news is, if there's ever too many restrictions on legal P2P exchanges, new 'underground' exchanges will quickly pop-up and take their place.

[nambunamba]

Well more decentralized crypto exchange in the crypto space and recently there is Stellarx decentralized exchanges that just launched in september 28. I believe decentralized is good and also binance will make decentralized exchange, i believe it would be really big in future.

[tee-rex]

...
But that platform, or kind of, has been there for centuries. When you exchange fiat person to person, just like gold and silver coins a few centuries ago, that is a peer-to-peer exchange. How are they going to regulate it? Now, with the advent of cryptocurrencies and Internet, we are taking this exchange to the next level by removing distance from the equation completely. If you ask me, that's a natural course of events, and preventing or hindering it would be like trying to stop a freight train. Typically doesn't end well for those trying.

You may be confusing peer-to-peer with decentralisation, these 2 doesn't necessarily go in pairs. Binance is/will still be a central entity providing platform for P2P traders and as such, they could be forced to impose limits and comply with KYC requirements.

I should probably agree that P2P payments aren't always as peer to peer as we might want them to be, meaning there can still be a third party making such transactions possible, apart from the network itself which can also be considered a third party of sorts. But it just means that P2P transactions are possible in both centralized and decentralized environments. As this topic is about decentralized crypto exchanges, I think we should expect P2P transactions being made in a truly decentralized manner, though, honestly, I don't know what Binance may mean by that phrase, that is Decentralized Crypto Exchange.

[LeGaulois]

It's his plan B, for the day Binance won't have the choice to abide by the laws in case of a new regulation pop out from Europe. Smart guy, already trying to escape a potential problem .
A question is how long the beta stage will be, because in the crypto world a beta version can be 2 years long; lol

[audaciousbeing]

I see it as a good plan for the future because it shows that Binance are ready for that future. But rather than focusing on the benift it brings to the crypto market, we should also not be oblivious of the real issue here which is the dominance of Binance in the crypto market and the position they so much covert is the reason why they are making this move in that by the time the community moves to decentralized exchange platform, they are already there.

Unless they will have to restructure the company in such a way that the Decentralised section is standing on its own with its own team and CEO, there will be conflict in which they might not be able to handle in the long run.

[rodalutor]

Did he not say that this won't be happening until a blockchain can offer a stable 40k tps. I know by 2019 this is likely but it seems strange to start development without that already being agreed. Do you think this will mean all coins will be listed, if the volume can match or surpass binance centralized exchange but all coins will be listed that could get interesting for new ICOs.

[acheampong64]

The rise of dex exchanges and stable coins is getting rampant in the crypto space and I think it's healthy for us. Giving us the power to trade unregulated and also stabilising coins at the same time. I think it'll be good news for us. This year has been a year of revolt indeed. All companies are finding one or more ways to make their services better and as such the whole of the cryptocurrency market.

[figmentofmyass]

here's the problem. the DEX removes custodial trust, but it requires users to hold a centralized ICO token tied to binance's success (BNB) as native gas for the DEX blockchain. i'll be curious to see how much BNB will be required to post and match orders.

if the order posting UI and matching engine is good, and you don't need to hold too much BNB for gas, i'll definitely be interested to try it.

“Just had a productive meeting for Binance DEX (decentralized exchange), where BNB will be native gas, and the exchange don’t control user funds. Aiming for a public beta end of the year/early next year. Yes, we work on Saturdays, non stop.”

[tee-rex]

here's the problem. the DEX removes custodial trust, but it requires users to hold a centralized ICO token tied to binance's success (BNB) as native gas for the DEX blockchain. i'll be curious to see how much BNB will be required to post and match orders.

Could you please explain in a few simple words how the whole system is supposed to work? What I'm specifically interested in, will there be orderbooks as we see them on regular exchanges and how fast they will be updated (refreshed). Then, if someone makes a trade, what guarantees the order execution in the specified amount at the specified price? As I get it, these BNB tokens will be used, but if so, how will it be different from a regular centralized exchange apart from adding an additional layer in the form of these tokens?

I'm also very interested in decentralized exchanges but not the ones which are only called so.

[wantjokull]

Interesting to read the statements made by BNB CEO. So he is getting at decentralisation because he believes in it as the future of crypto currency market. Initially I really thought that centralised exchanges are more safer than the decentralised one and it was also proven by the crypto currency exchange like Binance itself. May be with the current scenario where the crypto exchanges are getting dex based Binance might have found the necessity of making decentralised version of their. I believe that they wont go fully decentralised or may be they will make a version of their decentralised exchange with BNB being used as gas for the transactions.

[Febo]

How Binance Decentralized Crypto Exchange Launch in 2019 Will Impact the Market

Decentralized exchanges are having problems to attract volume. Binance will need to do hell of a job by giving something to make people use their decentralized exchange.  On long run of course it is good for Binance, because sooner or latter only decentralized exchanges will exist. But to answer your question. This will have zero instant impact on crypto.