What is Binance DEX? How to create a wallet on Binance DEX?

The wave of IEO passed is also the time when the market placed expectations on Binance’s decentralized exchange project – Binance DEX. DEX stands for Decentralized Exchange or decentralized exchange. This is a decentralized trading platform of Binance, developed on Binance Chain – Binance’s Blockchain. They launched the testnet version on February 20th and officially ran on the mainnet on April 23, 2019. DEX is considered a new step, with the mission of the monetary liberalization of the Binance ecosystem.

What is Binance DEX?

Binance DEX (Binance Decentralized Exchange) is Binance’s decentralized exchange developed on Binance Chain. If you’ve ever used decentralized exchanges like Idex or EtherDelta, you’ll feel familiar using it. However, the difference is that Binance DEX has its chain and is supported by the massive community of Binance.

Binance DEX currently supports hardware and soft wallets that are safe to connect to the Binance Chain network. Some supported wallets include Ledger Nano S, Trust Wallet, Coinomi, Exodus, Atomic Wallet, Enjin, Infinito Wallet, Guarda, …

Before Binane DEX appeared, the Binance exchange we used to frequent was the centralized version of the exchange. This version, also known as Binance CEX (Centralized Exchange). With centralized exchange, you will give rights to store and protect your assets to a third party, Binance exchange.

Meanwhile, DEX will not hold customer tokens. DEX allows users to manage their coins/tokens. Transactions will take place automatically between users via the P2P network. Therefore, DEX will ensure higher safety and security than current centralized exchanges.

Advantages of Binance DEX

The most significant advantage of DEX compared to centralized platforms is that DEX allows users to control assets themselves. At this time, DEX could not access or manage user’s money. And Binance DEX is no exception. When participating, you will be allowed to create a wallet address on Binance Chain and keep your private key always. Of course, you are responsible for protecting this private key. If lost, it is considered that the money in the wallet also “evaporates” and cannot be recovered.

Binance DEX has the following advantages:

  • Protect customers and their assets better: They give control of assets and transactions to users. This eliminates the intermediate point causing many problems such as hacking, fraud …
  • No tax: Cannot levy or confiscate funds because only users can manage their accounts. This problem you can see in Coinbase before. That was when the platform was required by New York authorities to submit customer account information. The purpose is that the government wants to tax account holders. But with DEX, this is almost impossible
  • Reduced transaction fee: Transaction fee on the decentralized exchange is significantly lower than that of the centralized exchange. With DEX, users only pay a fee for validators – those who create new blocks on Binance Chain.

Disadvantages of Binance DEX

Besides, they still have some general weaknesses as follows:

  • Challenging to use: If you are familiar with a centralized exchange, when you switch to decentralized, you will be challenging to use
  • Can not take back property: Self-control of assets is both an advantage but also a disadvantage. If unfortunately, lost the private key, it seems that you have lost all your money. At this time, Binance DEX will not help you
  • Low liquidity: Most DEXs have deficient trading volume, resulting in weak liquidity. With the vast user community, we hope Binance DEX will fix this problem soon

Important features of Binance DEX

1. About function

  • You can issue new tokens then send, receive, burn, create, freeze or release your tokens
  • Any participant in the chain can propose the trading pairs they want, with full community support
  • Binance DEX also incorporates TradingView charts that fully contain technical indicators
  • Binance DEX is able to handle the same trading volume of the current Binance platform
  • The platform allows users to create wallets and hold private key
  • Binance DEX supports more wallets, as well as inter-chain and cross-chain features

2. Regarding technology

  • The transaction process is based on the core Binance Chain technology
  • Binance DEX has a one-second blocking time with almost instant transaction time
  • Binance DEX uses periodic auction rules to match all available orders

3. About security

  • The platform has no control over money and traders maintain control of their private key
  • Binance Chain uses a consensus mechanism based on Byzantine Fault Tolerance (BFT) and Proof of Stake (PoS)

How will BNB work on Binance DEX?

Binance Coin (BNB) was formerly an ERC-20 token running on the Ethereum Blockchain. However, with the advent of Binance Chain, BNB has been transferred to the “new” Binance Chain. Users can issue and receive new tokens on Binance Chain similar to the Ethereum network.

BNB will also be the native coin on Binance DEX. Traders can use BNB to trade other tokens/coins. Also, BNB is a fee on Binance DEX with many incentives and for example, significantly reduced fees compared to the use of other coins.

Transaction fees on Binance DEX

The transaction fee on Binance DEX is similar to Binance.com and other exchanges.

There are three types of fees, as follows:

  • Trade Fee
  • Deposit Fee
  • Withdrawal Fee

However, the way of charging on this exchange is entirely different. Including two groups of fees are:

  • Deposit/withdrawal fees
  • Transaction fee

For deposits/withdrawals on Binance.com or other centralized platforms, this fee is set by the exchange itself. On this platform, you only need to pay to the network to confirm your transfer. Therefore, this fee will be meager. Usually, after reaching an agreement between validators through the proposed voting procedure.

Transaction fees will charge in BNB. If there are enough BNB to pay, the fee will be deducted from the BNB. Otherwise, the fee will be deducted from other coins. Overall, the fees for depositing and depositing money are meager. Therefore, you can take a look at this fee when making transactions.

Create a wallet on Binance DEX

Step 1: To create a wallet, go to binance.org and select “Create Wallet” or go directly to https://www.binance.org/en/create.

Step 2: Read the information Binance has provided, as shown in the picture, and click “I Understand.”

Step 3: You create a wallet password as required, including capital letters, special characters (@, #,%, *, ..) and numbers. Click on the “Confirm” password and agree to the terms. Then, click on “Download Keystore File.”

Step 4: After downloading the file, store it very carefully. You continue to select “Continue.”

Step 5: At this time, you need to record or store the Mnemonic phrase below. Remember to keep these 24 characters very carefully.

Step 6: You need to re-enter the Mnemonic phrase randomly. After entering, you continue to press “Continue”.

Step 7: Select the method to log into the wallet.

There are four ways to log in as follows:

  • Wallet Connect: You scan a QR code to link a mobile wallet with WalletConnect. The recommended wallets are as follows: Trust Wallet, SafePal, CoolWallet S, Math Wallet, Meet. One, Equal
  • Ledger Device: Link to your ledger cold wallet
  • Keystore file: Upload and enter the password as created in Step 3
  • Mnemonic phrase: Use the stored Mnemonic phrase

That’s it, and you have completed the steps to create a wallet. Now you need to login and use it.

Conclude

DEX brokers offer quite a lot of advantages in transparency and avoid hacking because you are your asset manager. However, you need to know to protect the access to Binance DEX wallets, such as private key, Keystore file + password, and 24 recovery keys. Besides, you should also bookmark binance.org for future visits. This is the official and unique website of Binance DEX. Move bookmarks to avoid fake websites with nearly identical domain names.

You also absolutely must not send information such as 24 keywords, private key, file Keystore to anyone. Store them very carefully, preferably saved to USB. I wish you good luck and beat that win on this!

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