The Binance Decentralized Exchange (DEX) was announced on 23rd April 2019. It one of the first large scale DEX powered by the currently largest Exchange of the world, Binance. DEX promises decentralized control of trades, wallets and now the Exchange has announced a community based listing token listing process on the DEX.
The blog post mentioned that:
The Binance Community aims to provide the highest transparency in the DEX listing process.
The listing process essentially involves a deposit of 1000 BNB and a voting procedure to ensure security, transparency, and decentralization of the process. Binance has aimed that:
By using this transparent and community-driven process, we hope Binance DEX will be able to facilitate a larger number of crowd-vetted projects, hopefully listing 10 times more tokens than currently listed on Binance.com.
The proposal involves the following steps, where the first and foremost criterion is the deposit of 1000 BNB coins by the token issuers. This is being done to ensure a ‘security deposit’ amount from the token issuers during the listing process.
The Voting Process
Binance chain validators will have the voting rights for the approval or disapproval for listing tokens. They can either vote with a Yes/No/NoWithVeto or Abstain.
While it is obvious that the projects that get more than 50% of the votes from the validators get listed on the platform. The workflow is also designed to punish scam and fraud initiators if the proposal is “denied” in a majority or more than 1/3rd of the validators vote “NoWithVeto.” Furthermore, post-approval the token issuers will be required to deposit listing fees of 2000 BNB.
The Binance Chain validators are, however, preselected by Binance and they charge a fee for their work. Hence, while the ecosystem ensures transparency there is a high degree centralization because of the selection process of the validators.
Do you think many new tokens will be listed on the Decentralized Exchange or it will be a futile attempt? Please share your views with us.