TbDEX will allow participants to negotiate trust directly among themselves.
Jack Dorsey has been working on the idea of a bitcoin DEX platform since July of this year.
Square, the bitcoin payment processor led by Jack Dorsey, CEO of Twitter, released this Friday, November 19, the “white paper” or technical document, of its decentralized exchange (DEX). The protocol is called tbDEX.
According to ad, tbDEX will function as an entry and exit gateway for the exchange of fiat and bitcoin currencies. Its objective is to build bridges between the “fiat world and the world of cryptocurrencies”, allowing the “average individual” to benefit from the use of innovations in the sector.
Square had been working on a proposal for its decentralized services platform since the middle of this year. As reported by CriptoNoticias, Jack Dorsey himself announced in July that the goal was to build an open protocol to “facilitate the creation of decentralized financial services, without custody and without permission.” In late August, Dorsey approached Bisq, a DEX platform that has been in business for over 5 years, to brainstorm ideas to help him develop Square’s new DEX protocol.
TbDex proposes to handle the issue of trust between the parties, or «social trust», using a identification system which they called DID (decentralized identifiers). The model “allows participants to negotiate trust directly with each other, or to voluntarily and mutually trust trusted third parties to vouch for the counterpart.”
The protocol even incorporates a adjustment of transaction costs associated with risk. That is, the greater anonymity, the higher the rates and vice versa. They believe that, with this approach, the market will find its own equilibrium.
As initially put forward by Jack Dorsey, the proposal does not incorporate a federation that is in charge of permits or establishes the required levels of trust, nor does it incorporate a governance token.
On the other hand, tbDEX will provide the necessary infrastructure so that access to the platform and the direct “entry and exit ramps” between fiat currency and bitcoin, is possible from anywhere in the world. This without resorting to centralized intermediaries.