The upcoming decentralized cryptocurrency exchange (DEX) from Binance will not hold the private keys of its customers.
Binance announced the creation of its own DEX back in August 2018. Since then, the company and its CEO, Changpeng Zhao, have been teasing the cryptocurrency community with sneak peeks and bits of information about the functionality of the future exchange.
According to Zhao’s latest announcement, made via Twitter, customers of the new exchange will use hardware cryptocurrency wallets with their Binance DEX accounts.
While Mr. Zhao did not specify the specific models compatible with the exchange, the community believes that it will support all of the most popular devices — such as those from Trezor, Ledger, and KeepKey. Pictured in the tweet is a Ledger Nano S with Binance functionality supported, leaving no doubt that the device will be supported.
Binance DEX is coming
Binance DEX is in active development and is scheduled for launch at the beginning of 2019.
The community-driven decentralized exchange will allow users to trade with its proprietary token, BNB, as well as with other digital coins. According to Changpeng Zhao, it will not compete with the centralized Binance exchange, as the platforms are focused on a different target audience and meant to satisfy different customers’ needs.
The latest sneak peek, released in Dec 2019, demonstrated the platform’s user interface, basic functionality, and the process of creating an account. Furthermore, the company showcased an explorer for its proprietary blockchain — Binance Chain.
Security is the key
Cryptocurrency exchanges are vulnerable to hacks and security breaches. The previous year proved that the safety of customers’ coins depended solely on security protocols and due-diligence procedures at cryptocurrency exchanges. A series of massive cryptocurrency heists, including Japan’s Coincheck and South Korea’s Bithumb, lead to the rise of decentralized trading platforms that allow peer-to-peer cryptocurrency trading. As DEXs do not have a central authority, users need not transfer their assets to the exchange and, therefore, retain control over their holdings at any time.
In this context, the decision to support hardware wallets looks natural as cold storage is considered to be the most secure way to store cryptoassets. By allowing users to trade coins directly from their devices, Binance DEX will combine the flexibility of hot wallet and security of a hardware device.
Binance has already announced integration with Trust Wallet, which will become the native wallet for the upcoming decentralized exchange and Binance Chain.
What do you think of Binance DEX’s support of hardware wallets? Will you use the centralized or decentralized version of Binance? Let us know your thoughts in the comments below!