Jack Dorsey says plan for 'TBD' bitcoin project is to build a decentralized exchange
August 27, 2021, 2:40PM EDT
2 min read
Last month, Square CEO Jack Dorsey disclosed plans for a project called TBD that, at the time, would focus on the development of a platform for open-source financial services dedicated to bitcoin.
That project has a clearer roadmap, according to Dorsey as well as Mike Brock, the CashApp exec put in charge of the initiative: a decentralized exchange. A decentralized exchange is a system for trading wherein no central party has custody or control of funds that pass through it.
In a tweet thread, Brock wrote that "[w]e believe Bitcoin will be the native currency of the internet. While there are many projects to help make the internet more decentralized, our focus is solely on a sound global monetary system for all. But including all requires a few pieces we think are missing... Getting bitcoin today typically involves exchanging fiat at a centralized and custodial service like @CashApp or @Coinbase . These on- and off-ramps to Bitcoin have a number of issues, and aren’t distributed evenly around the world."
He went on to say:
This is the problem we’re going to solve: make it easy to fund a non-custodial wallet anywhere in the world through a platform to build on- and off-ramps into Bitcoin. You can think about this as a decentralize[d] exchange for fiat. As we said, this platform will be entirely developed in public, open-source, open-protocol, and any wallet will be able to use. No foundation or governance model that TBD controls. Permissionless or bust."
Brock noted that the exact design principles for this platform aren't fully ironed out, highlighting Rootstock, a smart contract-enabled sidechain of Bitcoin, as one potential option. "However, the gaps needed to build this may be too large, which would also have us consider other chains as a bridge," he went on to add.
"Some of the gaps we currently see are around cost and scalability. Lightning is solving for this with payments. We need a solve for exchange infrastructure between digital assets, like stablecoins," Brock wrote.
Sygnum Bank’s Digital Asset Outlook 2022 report analyses the developments that shaped the crypto industry in 2021, and lays out Sygnum’s strategic outlook for the market and its key sectors and trends for the year ahead.
With more than $100 billion in market cap across all chains, it is likely that the DeFi market cap will grow to $200 billion by 2025. However, many users still face various technical barriers when using decentralised platforms to do on-chain farming, staking and trading, while off-chain solutions face liquidity issues, fiat restrictions and the lack of a central multichain to support crypto assets and institutional-grade custodians.
The Federal Reserve dropped a new central bank digital currency white paper on Thursday. While largely avoiding the topic of crypto, it suggests that a US CBDC could compete with "private digital money."