Yesterday Square published the technical document from a decentralized Bitcoin exchange called tdDEX. We tell you all the details!
Square launches a new crypto project
Square has decided to take its relationship with the crypto ecosystem a step further than simply allowing people to buy Bitcoin through the Cash App.
In this regard, they have revealed the great secret project that seeks to allow people to exchange Bitcoin and fiat.
This is how it establishes the design principles and what the ambitions of the project are. It is described as “a protocol for discovering liquidity and exchanging assets … When the existence of social trust is a problem in managing transaction risk.”
Therefore, the protocol will seek to “facilitate decentralized networks of exchange between assets by providing a framework for establishing social trust.”
This aspect is fundamental since it marks a difference between the decentralized exchanges (DEX) known in the crypto ecosystem and tdDEX.
Basically, most DEXs use a trust model. And, because of this, they have a governance token. However, this will not be the case for this project.
Furthermore, the document emphasizes that “it is still prohibitively difficult for the average person … to directly access entry and exit ramps into the decentralized financial system.”
Degree of decentralization
However, the revealed document raises some characteristics that seem to make the project much less decentralized than a DEX in every sense of the word.
And some of these characteristics is that the protocol requires participants to go through a verification process, or better known as KYC, to comply with the regulations.
But, in addition, it raises the deployment of Blockchain analytical solutions with the aim of tracking transactions on the platform. In particular this last feature, which is a forensic Blockchain solution, is a highly debated topic in the crypto community.
The reason is that these solutions reduce anonymity on the network. However, it is argued that it is necessary to reduce illicit activities.
They want to hear your opinion
In such a case, whether or not you agree with what is detailed in the whitepaper, Square wants to hear the crypto opinions.
“This initial draft of the whitepaper is intended to establish a conceptual understanding of the high-level design of the proposed tbDEX protocol. It should not be considered complete or final. It represents a suggested design for public comment, ”the authors wrote.
What do you think of the project? Are you really solving a crypto problem? Leave us your comment!