Binance Labs, the incubator of blockchain technology recently had an “Ask me Anything” (AMA) session on Reddit. The discussion mainly centered on investment in digital currency plus other blockchain projects.
During the AMA, one of the topics that were discussed was decentralization. Decentralization simply means dispersing and distributing power from a central governing authority. Many of the government and financial systems that we have today are centralized. This means they are managed by a single authority like the central bank or any other state organ.
In response to the question on whether it is possible to have a completely decentralized crypto exchange, Benjamin Rameau, the director of Binance Lab said although the journey may be long, he is optimistic about having a fully decentralized exchange in the future. He noted that the company has launched several projects in the sector. According to Rameau some of the main challenges that face the current decentralized exchanges are scalability problems and low transactions speed.
Ella Zhang, the head of Binance Labs echoed Rameau’s statements saying that the company recently announced that it would develop a decentralized exchange DEX, which is one of the many initiative that are being taken towards achieving a fully decentralized exchange. Zhang said that decentralization is the foundation of bitcoin and blockchain technology. He said the company is working on launching several projects in the sector like Dexathon, as well as partnering with leading research organizations so as to help get solutions to some the most pressing challenges facing decentralization.
Binance’s Decentralized Trading Platform
Recently, Binance announced that it is developing a public Blockchain that will lead to the creation of a new decentralized exchange. In developing the new platform, the company says it was motivated by the fact that at some point both centralized and decentralized exchanges and complement each other. Binance says the new platform will be used to transfer and trade blockchain assets. Additionally, the company says the platform will facilitate its transition from a company to a community.
Binance’s new blockchain will also host the Binance Coin (BNB) that will become a native coin supported by its own Blockchain mainnet.
A decentralized exchange differs from a centralized one by the fact that it does not depend on a third part to transact with its customers. Users are able to transact directly with one another without the need for a central server or central authority that keeps custody or possesses order books.
In the AMA session, Binance Labs said it has a fund that is dedicated to identifying and supporting projects that will have long term effect to the whole blockchain and cryptocurrency ecosystem. While responding to the question on the criteria used to select the projects they invest in, Flora Sun, a team of Binance Labs said that company has a very long-term investment horizon adding that it only focuses on projects that have a long-term perspective. Sun says by taking a long-term perspective on projects, Binance Labs gets enough time and opportunity to examine the reasons that motivated the founders to initiate the projects as well as gauge their abilities to deliver on the promises.