In another significant development for the crypto world, Jack Dorsey, the CEO of Twitter and Square, has announced a whitepaper outlining the creation of a new decentralised exchange called ‘tbDEX’.
A decentralised exchange is a peer-to-peer platform where trades occur directly between crypto investors without a third party. DEXs with the decentralised nature of cryptocurrencies augment it into the exchange itself, making the entire trading process more transparent.
Much like other decentralised exchanges like Uniswap, tbDEX aims to reduce the gap between fiat and cryptocurrencies. How? By allowing investors to convert their dollars into the cryptocurrency of their choice seamlessly.
By using tbDEX, investors are presented with the ability to convert their fiat currencies into crypto without routing their payments through different exchanges and platforms. As mentioned in the detailed white paper, “[tbDEX] is a protocol for discovering liquidity and exchanging assets (such as bitcoin, fiat money, or real-world goods) when the existence of social trust is an intractable element of managing transaction risk.”
The platform’s code was created using technologies like verifiable credentials and identity hub data storage protocols. Such decentralised exchanges focus on removing intermediaries and trust brokers and allowing investors to directly interact with the platform’s infrastructure. The platform itself does not partake in exchanging personal information and does not store anything on its servers.
High Privacy, High Fees, and Vice Versa
tbDEX interestingly approaches transaction fees by basing the proportion of fees on the amount of information transacting parties choose to share about themselves. The more information they divulge, the less the transaction fees are.
In effect, transactions that are completely anonymous and have a substantial risk-index cost more than relatively less risky ones.
DEXs Take The Lead
Currently, there’s a high degree of social trust involved when transacting between crypto and fiat.
tbDEX aims to facilitate this element by using Decentralised Identifiers (DIDs). It will allow P2P connections between transacting parties without third-party networks.
Creating a platform that does not rely on trusted third parties to vouch for the verification of the counterparty ensures that the network works completely independent of a centralised authority. Also, the whitepaper addresses issues that other decentralised exchanges face, including chargebacks, defaults, crimes and reversals.
The head of strategic development at Square said, “this is the problem we’re going to solve: make it easy to fund a non-custodial wallet anywhere in the world through [tbDEX] to build on- and off-ramps into bitcoin. You can think about this as a decentralise [d] exchange for fiat.”
Jack Dorsey has been very expressive of his positive views of Bitcoin on social media in the past. In a Bitcoin conference in July, Dorsey is reported to have said, “my hope is that [Bitcoin] creates world peace.” It is no secret that Dorsey is a big advocate of cryptocurrencies in general, and his role in the development of tbDEX is no small step for the crypto community around the world.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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