CEO of Twitter and Square, Jack Dorsey, introduced a particular white paper this past Friday containing comprehensive details regarding Square’s upcoming decentralized Bitcoin exchange, called the tbDEX. As per the white paper, tbDEX would not fall under the category of traditional DEXs as it would not implement a trustless model – it will not feature any native governance token. Alternatively, tbDEX aims to be a message protocol programmed to assist trust relationships without federation reliance to govern access points.
The white paper notes that the world is currently at a financial system crossroads, and the emergence of decentralized, trustless networks is the key to the future where commerce can facilitate without intermediary participation, permission, or financial benefit. The white paper implies a future where transactions are more seamless and direct is a future without intermediaries.
The tbDEX reportedly intends to introduce several features that render it far less decentralized than traditional DEXs today. For example, Square’s upcoming Bitcoin-based DEX would require all participants to undergo the know-your-customer (KYC) protocol, which is predominantly found on centralized exchanges, before utilizing its services.
Even further than that, the white paper also noted the activation of blockchain analytic solutions, either built within the upcoming DEX itself or via a third party, that would be utilized to track transactions performed within the platform accurately. While its supporters argue that such a feature is necessary to mitigate illicit activity instances, others claim that its incorporation would only enable authorities to cross-reference public wallet addresses and payment IDs to reveal personal identities.
Square is encouraging customer feedback on the recently published whitepaper through its newly-created Twitter profile.