Square, the financial services and digital payments company of Twitter CEO Jack Dorsey, recently released a white paper for its Bitcoin decentralized exchange (DEX) proposal, tbDEX.
According to an official statement published by one of the project’s developers, Square’s DEX is designed to bridge the gap between fiat currencies and BTC.
DEX to BTC
As the statement highlighted, despite the widespread growth of the cryptocurrency industry, many people still receive their payments, pay for goods and services, pay taxes and many other things with fiat currencies.
In that sense, tbDEX’s goal is to offer users a straightforward way to easily convert their fiat currencies to Bitcoin on a free market, without having to go through multiple platforms.
“The tbDEX protocol aims to create ubiquitous and accessible entry and exit paths that allow the average individual to benefit from crypto innovation,” says the white paper.
No governance token
The white paper also noted that tbDEX will not work like most DEXs available on the market today.
This is because the platform will not have its native governance token. In addition, tbDEX will not be designed to build trust between participants:
“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 governance token. Instead, the tbDEX protocol allows participants to directly negotiate with each other. Or, mutually and voluntarily, depend on trusted third parties to guarantee the counterparty”, he added.
Also according to the white paper, the platform’s transaction fees will be determined by the free market. In other words, it will depend on the amount of information that each member of the network is willing to disclose.
According to the developers, the higher the level of anonymity, the higher the transaction costs.
To encourage community and developer contributions, the white paper has also been posted on Github.
Decentralized Exchange for Bitcoin
In early August, as reported by CriptoFácil, Square CEO Jack Dorsey revealed that his digital payments company intended to build a Bitcoin-centric DEX through its new development division, TBD.
After three months, the proposal is one step closer to becoming a reality with the launch of the white paper.
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