Jack Dorsey reveals efforts to build a Bitcoin-centric DEX

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Square and Twitter CEO Jack Dorsey isn’t just happy to say he loves Bitcoin. He is doing everything possible to realize his dream of making BTC the global currency of the internet.

In mid-July, Dorsey announced the launch of TBD, a new company designed to facilitate the creation of decentralized financial services. Today he finally announced that the department will be responsible for developing a decentralized exchange (DEX).

Jack Dorsey did not provide any further information about the platform. So it’s probably still at the theoretical stage, but given the robustness of CashApp, it’s possible that some of the developments won’t be as complicated as if a startup tried to build a product from scratch.

What is a decentralized exchange?

DEXs, or decentralized exchanges, are platforms that allow their users to exchange cryptocurrencies and tokens without the need for an intermediary. Thanks to the code baked in a smart contract, everything is decentralized and automatic.

In general, their advantages are that they are anonymous, can be integrated with any token compatible with the protocol without a verification process, do not require a KYC, and enable parallel business development by designing new interactions with the smart contract.

As for the downsides, it is slow and typically expensive to operate as each trade has to be broken down in a block and the more complex the interactions with smart contracts become more expensive.

Centralized vs. decentralized systems. Source: Mobilmindz

Additionally, due to the public nature of their code, decentralized exchanges are more susceptible to hacks and exploits. In the event of a failure, the victims (traders) do not have to hold anyone accountable as there is no central body responsible for the service.

Examples of decentralized exchanges are Uniswap, Sushiswap, PancakeSwap, Bancor, Balancer, etc. The best-known centralized exchanges, on the other hand, include Coinbase, Binance, Kraken, Huobi, FTX, among others.

Jack Dorsey wants a Bitcoin-centric DEX, and that’s not as easy as it sounds

Due to their complexity, DEXs are usually based on second generation blockchains. Bitcoin is a first generation blockchain as it only allows tokens to be sent and received. Ethereum and Binance Smart Chain are second generation blockchains as they enable the creation of programs and smart contracts. That is, they support the programming of complex transactions because they are touring complete.

But Jack is a bitcoin maximalist and is looking for his DEX to be basically geared towards the # 1 cryptocurrency.

There isn’t a lot of information about how he is going to achieve his goal. Still, as Mike Brock, general manager of TBD at Square revealed, much of the code is likely to be developed on RSK. This Layer 2 solution enables the execution of smart contracts in the Bitcoin network.

Bisq, a decentralized, Bitcoin-oriented platform that has been around for several years, contacted Jack to offer some sort of integration. The CEO of Twitter liked the idea.

Maybe there will be another integration in the near future.

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