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    Home » Crypto News » Binance Births Centralized ‘DeFi’ with Launch of BSwap Automated Market Maker

    Binance Births Centralized ‘DeFi’ with Launch of BSwap Automated Market Maker

    Author: Greg Thomson

    Last Updated Sep 4, 2020 @ 14:05

    The world’s leading cryptocurrency exchange, Binance, has created its own version of a swap protocol called BSwap.

    The largest cryptocurrency exchange in the world, Binance, has created its own centralized version of an automated market maker (AMM) pool, named BSwap, or Binance Liquid Swap.

    Launched on September 4, Binance’s take on the Uniswap decentralized exchange (DEX) will bring token swap functionality, and allow users to provide liquidity in return for an annual percentage yield and a share of the protocol’s trading fees.

    Binance Launches Centralized Uniswap Competitor

    Binance’s own Uniswap clone launches with three crypto assets initially available for trade: Binance USD (BUSD) Dai (DAI) and Tether (USDT), according to an official announcement.

    Users will be able to deposit the coins listed above and start earning interest in return for providing liquidity. Binance says the use of an automated market-making protocol will provide lower fees, stable prices, and instant liquidity. For the first month following the launch of BSwap, trading fees will be cut to 0.04%, before returning to the standard rate of 0.1%.

    AMMs work by automating the trading process so that no two traders ever have to wait to find each other. Instead, trades are executed via smart contracts, and private reserves are replaced by voluntary liquidity pools.

    Binance’s latest foray into the decentralized finance (DeFi) space follows its recent listings of DeFi forks, Sushi (SUSHI), and DFI.Money (YFII) – both forks of Uniswap and yearn.finance (YFI) respectively. Wrapped Bitcoin (WBTC) – an Ethereum-based token that’s interchangeable with Bitcoin – was also listed in September.

    Binance Eating Its Own Tail?

    Binance, like many other centralized exchanges, is being forced to rapidly adopt DeFi tokens or else risk being left behind by crypto’s hottest new item. However, the eagerness of centralized exchanges to adopt technology which was created for the sole purpose of making them obsolete could end up being wildly misplaced.

    Even after a near 20% shortfall in trade volume in the past 24 hours according to its dashboard, Uniswap still records more daily trade volume than all but the largest centralized platforms. And with $1.9 billion worth of liquidity locked in – even despite numerous Uniswap clones – Binance will be hoping to siphon off some of that custom.

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    Read more on: Binance Uniswap

    About The Author

    Greg Thomson View more posts by this author

    Greg is a journalist from Glasgow, Scotland who covers the cryptocurrency and blockchain beat. He has contributed to some of the foremost publications in the industry and joined CryptoPotato in 2020. Contact Greg

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