Founder of Telegram announced plans to launch a decentralized platform for trading digital currencies. Our experts told us how successful this project could be. And whether its development will be hindered by regulators
The next step in development of Telegram is the creation of decentralized tools. Including cryptocurrencies, as well as decentralized cryptocurrency exchanges, Pavel Durov said on November 30.
“This is how we can correct the mistakes caused by excessive centralization, which has failed hundreds of thousands of cryptocurrency users,” wrote the head of Telegram.
He explained that the blockchain industry was built on the principle of decentralization. But it turned out to be concentrated in the hands of a limited circle of individuals abusing their power.
“As a result, many people lost their money when one of major crypto exchanges FTX went bankrupt,” Durov recalled.
He said the solution to the problem is for blockchain projects to return to decentralization. And users should switch to transactions and wallets that do not depend on any third party.
The founder of Telegram said that he and four other people launched a decentralized domain name auction platform Fragment in five weeks. It is based on the blockchain platform TON, which Durov called fast and efficient enough to host popular apps. At the same time, Durov criticized Ethereum, calling it outdated and expensive, even after the latest global network upgrade.
“Fragment is amazingly successful. In less than a month the platform has sold $50 million worth of user names. This week Fragment will go beyond user names,” Durov said.
How will regulators treat Telegram cryptoexchange?
In terms of resources and the existing experience of Telegram team in developing TON project. Creation of such a project as a decentralized exchange and cryptocurrency wallets seems realistic, our experts believe. However, the current global trend in regulation of cryptoassets turnover is tightening and streamlining of control requirements.
Since details of this project and specifics of functioning of announced project are not disclosed. At the moment, it is difficult for our experts to assess how it will meet the requirements of the legislation of different countries.
What are the future prospects for this Telegram project?
Decentralized crypto exchanges are difficult to regulate because they are essentially not companies. Therefore, it is legally possible to prohibit such exchanges, but it is more difficult to limit their activities. Our expert stressed that liability in case of using such exchanges from the legal point of view does not apply to their creators. It extends more to ordinary users in each specific transaction.
Our experts admit the possibility that the launch of this site may be timed to the lifting of SEC ban. Which is imposed on Durov until July 2023 because of the attempted launch of the TON platform with the participation of investors from USA.
Most likely, the new DEX exchange will not be connected to Telegram in any way. Except for simplified authorization and a number of mechanics. Otherwise, they are definitely two different products.
What risks will ordinary users face when using a new DEX exchange from Telegram?
Most likely, DEX exchange will be created on TON blockchain. The main advantage of a decentralized platform is that it does not store users’ cryptocurrency. The exchange only brings together buyers and sellers of digital financial assets, without intermediaries. And users do not need to open an exchange account for such transactions – transactions are made from investors’ wallets.
That is, there is no risk of losing their funds if the exchange decides to block them. As, for example, happens now with the centralized exchanges, which go bankrupt.
The only risk of participation in transactions on the decentralized exchange is the risk of losses due to delays in price updates. And you will need to pay a commission for transactions on that DEX exchange.