Topic: How Binance Decentralized Crypto Exchange Launch in 2019 Will Impact the Market (Read 476 times)

This is a good thing even though there have been many DEX markets before, but binance is the biggest market and certainly can make crypto's development better.

Fork Delta is just another decentralized exchange, and whether you prefer it or not, it really does not matter, what is not known yet is what Binance will end up coming with.

Nonetheless, I feel we have not even reached that stage of decentralized exchanges getting to function properly and probably, this would change with what Binance is bringing or would just end up becoming the same old same old. Centralized exchange are always known for liquidity, which is why a lot of traders prefer that, probably, this would just be for a totally different category entirely.

Uuhm… that’s really cool, but the only benefit I think this is going to have will only have to do with exchanges, cause it’s just going to give users the control over their money by taking the control of funds out of the hands of the exchanges.

And you know what that means? That means you’re on your own and you are so to be blamed if in case anything happens to your money. Well, I said before it’s cool, so it’s cool and I know a lot of people are going to like. And I also like the way Binance are coming up with great ideas and being the leaders at all time.

I prefer the simple one, and I think everyone does that too. and so far to exchange the most simple and fast tokens is the forkdelta.

ideally they wouldn't need to launch a DEX. however, they know the market is heading that direction---see ethfinex for example--- so they're adapting. they know damn well it'll dig into their exorbitant profits, but what's more important for them is market consolidation: they need to secure market share.


i don't think the details are publicly available yet. but here's my personal thoughts:

binance will use a BNB-powered blockchain. regarding fees and potential profit, it partly depends on how the underlying blockchain is secured. is it mined? hybrid POS? a private chain maintained by binance? in most scenarios, binance is likely to be collecting much or all of the gas fees paid to trade on the DEX.

so first, they're collecting BNB gas fees (and perhaps withholding it from market, increasing the price of BNB).

second, they inflate the price of BNB by increasing demand for it: now there's an entirely new use case---it's not just an investment because of their buyback/coin-burning program or for discounted fees anymore. now you need BNB to trade on a DEX (and i'll bet one of the best DEX on the market).

third, they inflate the price of BNB by reducing supply: if everyone needs BNB to trade on the DEX, they first need to buy it at spot then hold it in their wallet for future transactions.

i think they're trying to build an economy around BNB. since binance is the only place BNB can be used, it reinforces the incentives to use their exchanges. and also, last i heard, the binance team holds 80 million BNB---if BNB rises in value, they profit greatly.


they're offering people a choice:

use our centralized high-speed exchange like before OR use our DEX which economically reinforces our business and retains our market share

It'll probably always be that way. No matter how sophisticated decentralized exchanges get, centralized means will always be far faster and more efficient. We live in a world where most trading is automated: often times, every millisecond counts. DEX is for people who value trustlessness and perhaps privacy from exchange KYC.

There is the theoretical possibility that state/payment channel technology (like Lightning network) could be leveraged to allow for near-instant execution. But we're very far away from that possibility, and I have difficulty conceiving how markets could become sufficiently liquid to serve the demand of the spot market. I also don't understand how atomic "trading engines" can exist this way. It's hard to see a DEX functioning beyond peer-to-peer trading.

Well, binance is famous market but I can't see any impact on market while they require KYC. If they do all kind of exchanges/withdraws without id verification, then they will really have serious power and they have to do it in realiry since they are going to be decentralyzed but I highly doubt any government will allow them to do it, especially usa.
I bet Australia will be first against them.

centralized exchange platforms are the main headeche of this ecosystem. i am pretty sure that many big investors give up investing because of security problems in exchange platforms. if there is a good decentralized platform with good volumes, it will increase the trust to crypto market.

I am looking for a great outcome that will give better things for cryptocurrency.
I still dont know the whole fact about this and future for them.
But this move is really interesting and i am hoping for better days.

I should confess that I've been thinking along the same lines too and asking myself same questions. One of the way they can make money is to add a layer to a coin's base protocol that would take some percentage from every trade made using it. Another way to do it, and that's how it is done with bitshares, if I'm not mistaken, is by using some utilitarian token ("gas") for this purpose. Then you can advertise a decentralized network for this token in the same way as you would do while bootstrapping any other new coin. By taking this approach, you will be able to remove a third party risk and still receive royalties or fees from trades on a decentralized exchange built along these principles.

Don't they make a lot of money by charging fee's from the each trade? How would the decentralized trading platform would help them? What would be the method they would make money from it? I understand they are already charging less than almost everyone in the market for the fee, even less with their bnb making the fee go down %50 however its still something.

What would happen if they get rid of that and allow people trade directly? How would they make money at all? I am not sure what their play is doing something that would lose them money and doing it themselves as well. Weird to see, there must be a way to make money for them I can't see.

Hacks aren't really an issue. If we can reduce hacks of any sort by 90% just by using decentralized exchanges, then it's already a huge gain that we booked.

The good thing about more competition within the decentralized exchange space is that it motivates the different entities to speed up development and even come up with features other platforms don't offer, all to differentiate themselves from the rest. We're going through very exciting times that might change the way we think and transact with each other even further.

We largely don't need centralized entities, they need us, the people. Let them respect the people again by treating them with respect and not as a number that has no importance after you're an existing customer.

With this plan BNB could be a huge currency in the future as they will have to use BNB as gas in their new decentralize exchange. This will be a good news to us as we have more options for decentralize exchanges.

I can imagine it being a plan B, but I would not say this is somewhat of a plan that would fly in the first place, if the government of Malta does not want it. I cannot say for sure how things would pan out in the long run, but for what it is worth, we all know how government really frown upon decentralization and the only thing still holding them back right now, is because they know centralized exchanges can still be regulated but coming up with a decentralized exchange and then see it grow big, that would be some hell of a challenge and threat to the government. That is what I think anyway.

It is indeed a very giant market and the truth is that with the way things are going, binance is really looking to take the exchange space by storm and that would really make the competition a whole lot hard for other exchanges, with binance being the biggest first centralized high volume exchange, coming up with a decentralized exchange.

Decentralized exchanges have really not been people's first choice over the years, due to lack of liquidity, security and we all know how many times Etherdelta got its own share of hack and vulnerability, let's see if binance is really going to bring huge changes in this aspect and I am looking forward to it.

I am just curious, but how would a decentralized exchange with "identified" owners be affective against measures by a government to close them down? The Binance owners will still be held responsible for the development of the technology, even if it cannot be stopped.

They will also be targeted by governments and imprisoned, if they gain any income or profit from these exchanges. This is a flawed argument and business plan, once the owners of this is exposed. 

Honestly, no, I haven't used any decentralized exchange in the past but I understand how bitshares work conceptually and thus I know that truly decentralized exchanges are in fact possible, completely removing a third party risk, that of an exchange. But the problem with bitshares, for example, is that they are not real time. That seems to be the main issue with such exchanges which makes them totally uncompetitive with regular exchanges.

Okay, you mention smart contracts, so you still have wait until the contract gets confirmed by the network, right? If so, we are back to square one, that is how fast a decentralized exchange would work. If trade execution is not close to instant, as is the case with centralized exchanges, the decentralized ones will always remain inferior to exchanges like Binance itself or, say, Bitfinex.

binance is a giant market in crypto currencies, it's not impossible if binance comes up with a new system that will kick off the crypto currency market, but I can't analyze whether it will have a good impact or vice versa.

execution happens by smart contract on a public blockchain. unfortunately, i don't think there's much public info about how the binance DEX will work. i would hope that it's superior to the first generation of DEXs, which are limited to one-off p2p trades. ideally, there would be some kind of algorithmic market making to provide liquidity and fluidity to order book execution. i'm not sure how that would work in a decentralized environment, but it should be possible with more sophisticated contracts.


have you ever used a DEX like etherdelta? you need ETH to post orders/execute trades. on the binance DEX, you'll use the BNB token instead of ETH. in both cases, your trading funds are held in your own wallet.

I guess that many people are still reluctant to use decentralised exchanges because these exchanges lack liqiduity and haven't been out there for a long time. There still might be some critical bugs which might lead to huge losses. Binance is one of the most popular centralised cryptocurrency exchanges right now. I am quite sure that investors trust them and won't hesistate to try their latest project. Let's hope that bisq won't have any problem with surviving after Binance Dex launches.

Binance is the safest exchange place for the moment, and no one can hack, I believe that Binance is the most decentralized big one, maybe it will become one of the biggest exchanges in the future.

DEX surpasses centralized exchanges in all characteristics. The only thing missing is the volume. If the Binance will provides its DEX with big trading volume, then this can be a starting point for all users to switch to DEX and I will immediately buy Waves and BitShares.

I strongly support this attitude. But for the time being a truly decentralized exchange is simply impossible. Well, conceptually, it is possible of course but it will be completely unusable as there is no way to guarantee the execution of orders in real time as all transactions should be written on the blockchain and that takes a fucking amount of time. And to do that on the fly, which is what any regular exchange does in their inner accounting, we need something like Lightning Network implemented across different coins. That means all coins should use the same exchange protocol built in if these coins are to be traded against each other. Technically, it is quite feasible and doable, but there is an insurmountable issue of human factor which clearly reveals how self-centered the cryptocurrency developers are.

   It is Decentralized exchange or nothing.
 A true DEX should operate like Bitcoin/Cryptocurrency -  it SHOULD NOT BE OWNED, should be Open, Decentralized, Trustless etc. A good example of good DEX is Bisq
Perhaps Binance is building a semi-decentralized exchange and not actual DEX

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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.



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.

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.

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.

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

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.

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/

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.

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.

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.

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.