By Shelly Melancon (Switzerland)
The CEO of both Square and Twitter, Jack Dorsey, released the whitepaper last night for Square’s decentralized Bitcoin exchange. The whitepaper was released in a tweet yesterday. The whitepaper discusses the roadmap and structure of the exchange. The exchange is to be called tbDEX.
tbDEX Characteristics
tbDEX will differ from other DEXs. According to the document, tbDEX will not use a trustless system where transactions can not be reversed. The proposed exchange as such will not have a native token. It will work with the help of a message structure that allows individuals to build trust without a central government deciding who gets in.
Many of the characteristics detailed in the whitepaper will make It more centralized than your everyday DEX. The user will be compelled to go through additional KYC verifications depending on the governing rules of the user’s location. It is only after the KYC verification has been done that users can set up their wallets and transfer tokens with others on the network.
The whitepaper also pushed for analytics made as part of the decentralized exchange or provided by a third party. The proposal is to enable transactions to be monitored on the platform. A move like this is bound to raise a lot of eyebrows and bring contention. The feature would allow law enforcement, for example, to discover an identity behind transactions on the exchange. Major proponents believe, however, that such measures are necessary to combat illegal activities.
Aside from the matter of analytics, other centralized features might garner the praises of cryptocurrency lovers. One of these features is chargebacks. The feature would allow Square to reverse transactions on the network. This feature could help protect users from losing their funds when developers abandon decentralized finance projects and run away with the funds.
The market participants will decide transaction fees on the network. It will be determined based on how much information the individual is willing to disclose. The less information the user is ready to admit, the more transaction fees the user must pay. The primary reason anonymity would not be a feature of the exchange is that dealing with fiat currencies requires the exchange to follow fiat regulations.
Aims Of tbDEX Outlined In The Whitepaper
Square expressed its desire to create a future where everyone can participate in the cryptocurrency market. The project would attempt to bring the fiat and cryptocurrency worlds together. It would give people a choice to convert their depreciating fiat currency to what they believe is an appreciating Bitcoin under the best market conditions possible. They say they are creating a platform that does not allow for control over who accesses the market. Trust as the basis for transactions will be decided by the two parties involved, with no governing token.
Background
CEO of Square Jack Dorsey had disclosed the company’s plan to create a decentralized exchange back in August. Square already allows users to purchase, transfer and use Bitcoin through its Cash App. Square oversees these transactions, not the new exchange it is developing. The company believes that with the platform, they can create an easy and free entry and exit market into the world of cryptocurrencies. You can find more information about the exchange on the whitepaper; developers will also see it on Github for their contributions.
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