Square has released an official white paper outlining its long-term goals for its recently announced Bitcoin-focused DeFi project.

The tbDEX White Paper has been released

The tbDEX system, as its name suggests, intends to introduce decentralized finance (DeFi) to bitcoin (BTC).

On November 19, the project issued its white paper, which outlines the design concepts and long-term ambition for the Bitcoin-based DEX.

tbDEX, according to Twitter CEO Jack Dorsey, is a decentralized Bitcoin exchange that intends to make trading the world’s most popular cryptocurrency for fiat currencies and other real-world commodities much easier and more secure.

According to the white paper, tbDEX allows decentralized asset exchange networks by offering a framework for creating social trust through decentralized identification (DID) and verifiable credentials (VCs) to establish identity provenance in the real world.

tbDEX also intends to bridge the gap between fiat and crypto financial systems without using centralized intermediaries or trust brokers. Stablecoins (digital currencies tethered to fiat currencies) might be used to replace fiat currency, according to the research.

Other DEXes are not the same

Furthermore, tbDEX aspires to set itself apart from other DEXs by emphasizing trust and digitized identity. Part of the white paper reads:

“The tbDEX protocol approaches trust differently than other decentralized exchange protocols in the sense that it does not utilize a trustless model, such as atomic swaps. At first blush, this is not optimal, especially when considering the end goal of providing access to a trustless asset like bitcoin.”

The tbDEX team has said that it is open to collecting input on its white paper from the project’s wider community.

The current draft of the white paper is not final and is only intended to provide a conceptual understanding of the protocol’s high-level architecture.

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