Jack Dorsey, the CEO of Twitter and the founder of Square, is a well-known Bitcoin supporter, and his decentralized Bitcoin exchange project, TBD, has begun to take shape. Dorsey announced his Bitcoin-based Defi plans a few months ago, and TBD’s official account shared a white paper marketing the project’s launch earlier today.
The white paper describes how the upcoming tbDEX will bridge the current gap between fiat and bitcoin. tbDEX aims to provide a direct way for people to convert their fiat currency into Bitcoin without the need for multiple platforms. While there are several platforms that claim to provide a direct fiat-Bitcoin bridge, the complexities involved may deter new entrants. The goal of Square’s tbDEX is to create the first trustless platform.
According to the statement, “we propose a solution that does not rely on a federation to control permission or access to the network, nor does it dictate the level of trust required between counterparties.” “There is no token of governance. Instead, the tbDEX protocol enables participants to negotiate trust directly with one another — or to mutually and voluntarily rely on trusted third-party vouch for the counterparty.”
The platform’s transition fee would be determined by the free market, and users would have the option of remaining anonymous or revealing a specific aspect. The fee for anonymous transactions may be higher than the fee for transactions that reveal personal information.
Will Square’s Bitcoin Defi Exchange Be a Success?
When Dorsey first revealed his plans to build a DEX platform based on Bitcoin, many Ethereum supporters claimed it would fail because Ethereum-based Defi is already massive and the Bitcoin network must first integrate smart contract functionality in order to support Defi. However, Dorsey believes that Bitcoin’s open and decentralized architecture makes it ideal for DEXs as well.
Defi has emerged as one of the most significant breakout use cases from the crypto ecosystem, spawning a multibillion-dollar industry in its wake. Square’s desire to enter the Defi world using Bitcoin could prove to be yet another game-changing use case to emerge from the crypto world.