Binance, the largest cryptocurrency exchange by trading volume, announced that it is officially developing a public Blockchain to create a new decentralized exchange, according a statement on March 13.
Binance’s vision that “centralized and decentralized exchanges will co-exist in the near future, complementing each other” inspired them to develop the Binance Chain, which will be used for the transfer and trading of Blockchain assets. The move will also push the cryptocurrency exchange toward transforming from a company into a community.
“We believe that continuously supporting high-quality blockchain projects is the best way to develop this industry. We will continue to improve this part, as we committed in our whitepaper,” the cryptocurrency said.
A decentralized exchange differs from a centralized exchange in that it does not rely on a third party service to hold the customer’s funds. Users transact with other users without the need for a central server, and there is no central authority that possesses order books or custody.
While decentralized exchanges provide more anonymity and are lauded as being more difficult to hack, they can be less intuitive for beginning traders and lack some of the features and functionality of centralized exchanges.
Binance’s statement regarding decentralization was released a day after announcing a $250,000 equivalent bounty to anyone who could provide information that leads to the legal arrest of the hackers responsible for the hacking attempt on March 7.