Binance Launches DEX Testnet for Peer-to-Peer Crypto Trading

Binance has officially released its DEX testnet, a decentralized order-matching engine which will purportedly allow users to create wallets and trade cryptocurrency without trusting a centralized service.

According to a press release, Binance DEX is the company's new decentralized order-matching engine powered by the Binance Chain technology.

Binance users will be able to create a wallet and begin exchanging tokens on the Binance DEX testnet starting January 20.

Changpeng Zhao, the CEO of Binance, said that the new DEX will be able to provide users a "Different balance of security, freedom, and ease-of-use." Users will now have more control of their personal assets, as all of the responsibility for storing their info and assets will allegedly move to the user when using the DEX. According to the company's press release, the matching on Binance DEX will happen within a decentralized network of nodes with all transactions recorded on-chain.

He also noted that Binance DEX can handle the same trading volume as Binance.com.

If the Binance DEX manages to live up to expectations, then users will be able to hold their own seed words and private keys.

Notably, because Bitcoin has limited on-chain transaction throughput and transactions tend to be more expensive compared to other crypto alternatives, then an increase of BTC trading via DEX could increase congestion on the Bitcoin network.

Viktor Radchenko, the founder of Binance's Trust Wallet, said that the company was one step closer to realizing their vision for "Greater freedom of money" with the Binance DEX. However, it is unclear just how decentralized Binance's DEX will be.

Many on Reddit have pointed out that Binance can never have a "Truly decentralized" exchange as long as it's based on its own chain.

Competitors such as Blocknet and Stakenet are allegedly more decentralized, leveraging Atomic and Lightning Swaps to provide transactions that are purportedly faster, cheaper, and with fewer points of failure than Binance's DEX. However, if Binance leverages its enormous user base and already successful platform, perhaps 'pure' decentralization won't matter to the average user.