The success of decentralized finance (DeFi) blockchain apps has attracted a lot of attention from Square Payments (NYSE: SQ) CEO Jack Dorsey. The entrepreneur, engineer, and bitcoin advocate recently announced that his blockchain project dubbed TBD will enter the space by developing a Bitcoin DEX.
Ethereum co-founder Vitalik Buterin commented on the announcement describing how he thinks Jack Dorsey will create TBD’s Bitcoin DEX. But, he is not quite impressed so far. In a recent interview, Buterin told Bloomberg Technology he is not excited or impressed with the new venture.
He thinks that it fundamentally lacks a strong sense of the qualitative difference between Bitcoin and smart contracts. On the other hand, the Turing-complete chains like Ethereum are among a thriving field of other platforms that continue to attract millions in capitalization.
“I’m skeptical about these decentralized, finance-on-top-of-Bitcoin type of projects. So basically because the difference between Bitcoin and Ethereum is that on Ethereum there is native functionality that allows you to essentially directly put either ETH or Ethereum-based assets into these smart contracts, into these lockboxes where there is then arbitrary conditions of any kind that can then govern how those assets get released.”
However, a Bitcoin DEX might be different:
“Bitcoin does not have that functionality to the same extent. Jack is going to have to essentially create his system that enforces those rules, and then on the Bitcoin layer, the bitcoins will just have to be owned by, probably a multi-sig wallet controlled by Jack or just the participants in the system. It looks similar, but it will end up being something with a much weaker trust model.”
Dorsey insists that the DEX will be entirely decentralized and permissionless without him or TBD exercising any control over the platform as is the case with other peers on the network.
Dorsey Likes Bitcoin’s “Principles, Creation Story, Resilience”
Jack Dorsey is undoubtedly a bitcoin maximalist. The Twitter (NYSE: TWTR) and Square Payments founder and CEO has already mentioned in the past that he thinks the flagship crypto will become the native currency of the Internet. He cites the crypto’s principles, ‘its creation story’, and its ‘resilience’ as the reason why he believes in the crypto.
Thus, it does not come as a surprise that Dorsey’s BTC-focused blockchain project has decided to create an entirely decentralized exchange (DEX) for the biggest crypto.
Doing that would elaborate the crypto’s principles of decentralization and the permissionless architecture to a qualitatively new level of functionality.