Binance DEX | Review of a decentralized cryptocurrency exchange + instructions for working with examples
Binance DEX (short for Decentralized Exchange) is a decentralized marketplace from Binance that runs on a distributed network of nodes. It is based on the peer-to-peer Binance Chain blockchain. The exchange allows you to manage your wallet, store private keys, and exchange digital assets. The BNB exchange token has also been reissued on Binance Chain.
The blockchain provides almost instantaneous speed of transaction confirmation, blocks in it are generated every second. Thanks to this technology, the Binance DEX exchange is able to work with no less trading volume than the main Binance platform. This sets it apart from other decentralized exchanges, which often face speed issues.
|Decentralized exchange||Binance DEX|
|Year of creation||2019|
|Country of registration||Malta|
|Token capitalization||3 866 410 529 $|
|Visits per month||1.7 million|
|Daily trading volume||3 008 758 $|
|Place in the ranking according to CoinGecko||80|
|Trading commission||For BNB 0.04%, for other assets 0.1%|
|Working with fiat money||No|
|Official wallet||Trust Wallet|
|Number of currencies||86|
|Number of trading pairs||76|
|Main Net||Binance Chain|
History and reasons for creation
For the first time, the Binance management announced plans to launch a decentralized platform in March 2018, simultaneously announcing the launch of Binance Chain and the transfer of BNB tokens to this blockchain. Previously, tokens functioned on the basis of the Ethereum blockchain and belonged to the ERC-20 type.
The news came a few days after hackers tried to hack into the main exchange. Partial migration to a decentralized system can increase the level of security.
In August 2018, a video appeared with the first developments of the Binance Dex exchange, mainly affecting not the interface, but functional features. In December, another video appeared, from which significant progress was noticeable.
On February 20, 2019, Binance announced the launch of a new site in test mode at https://testnet.binance.org/.
The main reason for creating a decentralized platform is to reduce the risk of hacker attacks. Centralized cryptocurrency exchanges and wallets have suffered from cybercriminals many times, everyone knows about this. The Huobi exchange is also planning a transition to a decentralized form. This method allows each user to have their own private keys.
There is another advantage to a site running on distributed nodes. It has no boundaries, does not obey any norms, is not obliged to be regulated in the jurisdiction in which it was created. However, there are still operating restrictions in some countries where cryptocurrencies are banned. How to get started using the testnet example
How to get started using the testnet example
A guide to working with Binance DEX using the testnet example. We recommend that you practice and then start trading with real money
Go to https://testnet.binance.org/ and click Create a wallet. Read or skip the instructions. In the next window, create a password and click Download Keystore File. The password must contain more than 8 characters, upper and lower case letters, numbers and symbols.
The key file will be downloaded to the computer. Place it in a safe place.
Then make sure that no one is looking at the screen except you, because a seed phrase will appear there, an important element for restoring the wallet in the future. Click Continue.
Write the words that appear on a piece of paper and hide it in a safe place. Click Continue.
Confirm that you wrote down the mnemonic phrase.
Enter the words from the seed phrase that are under the indicated numbers. Click Continue.
Click Unlock the Wallet.
Choose a way to unlock your wallet. There are four of them:
✅ Via the WalletConnect wallet app by scanning a QR code.
✅ Through a physical medium (Ledger) by entering a PIN.
✅ Using a previously saved key file.
✅ By entering a seed phrase.
The terminal on the Binance Dex exchange is equipped with the usual functions for such platforms. If you have already used the Binance exchange before, you will notice that the interface is very similar in structure to it, so its development will not cause difficulties.
The main components of the terminal:
✅ The Tradingview chart in the center of the screen displays indicators such as Bollinger Bands, Moving Averages, RSI, etc. You can also draw on a chart using special tools. The TradingView Wiki provides more information on how to use a chart.
✅ Exchange activity. Part of the window with a table in the lower left corner of the screen. In it you can see the orders open at the given moment, the history of executed orders, the turnover of assets.
✅ Limit order. Binance DEX currently works exclusively with limit orders. This means that you can specify the desired price and number of coins; the order will be executed automatically when an opposite order with the same price conditions appears.
✅ List of orders (order book). Displays all currently open orders on the exchange. In the upper part there are sell orders, in the lower part – buy orders.
✅ Trade history. Last closed orders from all exchange participants for the selected trading pair.
✅ Trading pairs. Here you can choose the direction for trading. Shows the current rate of the asset, the daily price change (you can switch to display the daily trading volume).
Testnet account replenishment
It is possible to get test funds to try trading on Binance Dex. To do this, go to the testnet faucet https://www.binance.com/en/dex/testnet/address, log into your Binance account and enter your testnet address.
To find out the address, just hover the cursor over the account avatar on the decentralized exchange and click the “copy” button next to the wallet address.
You can add several addresses at once for different accounts. Then click Submit.
Bonus 200 BNB can be used in a few minutes.
Example of trading on Binance Dex
To create an order, enter the desired price and number of coins in the appropriate form. Buy orders are created on the left side of the field, and sell orders on the right. Select the trading pair you are interested in beforehand.
Then click Sell / Buy and enter your account password when prompted.
The created ticket will appear in the list at the bottom left. The table contains the following information:
✅ TxHash. Transaction number. Clicking on it opens a page with detailed information about the payment.
✅ The exact date and time the order was created.
✅ Trading pair.
✅ The direction of the exchange is buy or sell.
✅ Exchange cost.
✅ Number of coins.
✅ Filling (by what percentage the order is executed).
✅ The amount of funds received at the exit.
You can track your balance in the Balances section.
If you use test tools, they will not appear in your account. You need to track them in the Explorer section (enter the wallet address in the search).
Binance Chain Explorer
Explorer is an interface for user interaction with the blockchain. Through it, the user can view information about the blocks added to the chain, about transactions being carried out, about wallet balances and about Binance Coin (BNB).
To find a specific block, order, address, or transaction, you can use the search bar at the top of the page. Also in the browser, you can track the Binance Coin rate, its market capitalization and trading volume for 24 hours.
On the main page of the Binance explorer, you can see information on the six most recent transactions on the blockchain. If this is not enough, then there is a View All button.
When viewing all transactions, the following information is available about them:
✅ TxHash (hash or payment ID);
✅ the age of the transaction;
✅ block height;
✅ type of funds transfer;
✅ initiator address;
✅ recipient address, for transactions transferring funds.
By clicking on the TxHash of a specific transaction, you can go to its detailed study.
Also on the main page of the explorer there is a summary of the six most recently added blocks to the chain. There is also a View All button here.
Going into the detailed view, you can find out the following information:
✅ block height;
✅ block age;
✅ time of creation;
✅ the number of transactions within the block;
✅ which node formed the block;
✅ commissions from the block.
By clicking on the height parameter, you can find out even more detailed information about the block.
Nuances of work in test mode
The developers provide some tips for working with the testnet on the Binance Dex marketplace:
- Do not send real tokens to the testnet. At the moment, users can experiment and try any functions, traders can check trading strategies, and developers can check the system’s integration with their platforms. But all tokens used in testnet are test tokens that are not monetary assets.
- Do not share your private key or seed phrase with anyone in order not to lose control of your account. If this happens, the developers will not be able to help you get your funds back.
- Do not forget or lose the recorded mnemonic phrase and key.
- Try not to use a private key or seed phrase to unlock your wallet. They can be intercepted by phishing apps or websites. Use these tools only to restore a keystore file, access to a hardware or mobile wallet.
- Do not create too large aggressive orders. The matching logic on Binance DEX is slightly different than on Binance.com, and this difference is especially noticeable when trading large amounts. If you submit a large order, the matching engine will assume there is a buy or sell surplus and will offer you a much worse trade price. Therefore, it is better to split such orders into several small ones.
- Don’t fall for fraudulent promises related to giving value to tokens on the testnet. As already mentioned, they are intended only for mastering the functionality and can be completely reset at the time of the network update.
Also, do not use trading bots or other software that you do not 100% trust. Some of them ask for a private key and then steal it through phishing.
The purpose of the new blockchain and exchange Binance Dex is an alternative decentralized marketplace for exchanging digital assets and issuing them.
Gives clients the opportunity to:
✅ Send and receive BNB.
✅ Create new tokens to digitize any asset and use Binance Chain as the underlying transaction network.
✅ Send, receive, burn, freeze, unfreeze any tokens.
✅ Create new trading pairs.
✅ Track the health of the decentralized marketplace.
✅ View transaction information using the Binance Chain Explorer.
✅ Launch nodes to support the network.
✅ Pull data from Binance Chain for API or full-node.
✅ Develop applications and tools for exchange and chain users.
In the future, it will be possible to take part in the management of the protocol using your BNBs. In the meantime, Binance Dex seems to be a convenient and secure decentralized platform, the interface of which is very similar to Binance and does not raise questions.