In mid-2017, established crypto exchanges didn’t expect Binance to leapfrog them and become one of the most established exchanges with approximately 10 million users, and 15 billion dollar in trading volume generated in one month alone.

In fact, while many crypto exchanges experienced a bear market in 2018, Binance was making an estimated profit of  $446 million in the same year.

Binance was able to provide user volume and liquidity to generate huge amounts of income in both bullish and bearish markets. Given this success, Binance is now pushing for the launch of a decentralized exchange (DEX) according to this Binance review.

It cuts to the core of other crypto exchanges and seems like a “strange” decision. But not to Binance CEO, Changpeng Zhao, or simply, CZ. He confirmed the launch of DEX via Twitter on February 20th, 2019.

What is a decentralized exchange and why use one?

Compared to a centralized exchange, or CEX, that’s run primarily by a central authority, and which is controlled and regulated, a decentralized cryptocurrency exchange lacks control of a central authority. Hence, removing the need for a trusted third party.

A DEX is not controlled and employs 100% anonymity as it doesn't require your email or verification information. On the other hand, the downside of a centralized crypto exchange is the possible exposure of user funds to hackers. As was the case between 2013 and 2015 when hackers made off with huge sums stolen from centralized exchanges.

The Binance DEX and CEX push

As a leading centralized exchange, Binance is seen as trying to pull a counter-intuitive move by launching a decentralized exchange.

In his explanation, Binance CEO intimated on “disrupting themselves” instead of waiting for other crypto exchanges to do so. He sees this as a “necessary move” to kick-start their journey to launching a decentralized exchange.

Binance is not just a centralized exchange but also wants to become a dominant decentralized exchange that provides its users with both a DEX and CEX platform.

In the ideal world, Binance wants to be in a leading position in both worlds. The CEO believes they will continue improving both the centralized and decentralized exchanges, allowing users to make a choice.

It is a wait-and-see situation on whether the introduction of DEX will benefit Binance as a business or help users secure their crypto wallets.

Achieving full decentralization is not something that can be done overnight. However, there is a need for cryptocurrency exchanges to provide a more practical and beneficial level of centralization and decentralization, for the safer and easier holding of cryptocurrencies in the future.

It is a process where some blockchains are centralized and others decentralized. According to CZ, the move to deploy DEX’s in the market “will take small steps at a time”.