CRYPTO NEWS AGREGATOR
Wed, May 12, 2021 6:26 PM by Max E.

Rolling Stocks: How Binance Coin CeDeFied The World

Binance Coin

Significant price surges are amusing. Everyone wants to hop on and have a ride to the moon: some people are driven by FOMO, some HODL for the blind faith, the others believe in DYOR. In the “Rolling Stocks” series, we overview the hottest outbreaks and find out the reasons for such successes.

This time we’ll dive into Binance Coin and explore its basics, key features, and recent updates!

How BNB Started

Binance Coin (BNB) was an ERC-20 token created on the Ethereum blockchain by CZ Binance. The coin gives you the opportunity to trade on the exchange with significant discounts on the fees charged by the exchange for closing orders.

In July 2017, the Binance CEO held an ICO, raising $15 million. In the midst of the boom, such an amount did not seem supernatural to anyone, but in the end, BNB turned out to be one of the few successful projects.

Initially, 20 million BNB tokens were simultaneously generated, and no further emission is expected. Thus, this cryptocurrency is deflationary in nature, which in theory increases its value over time.

Binance Chain Mainnet Launch

In April 2019, Binance launched the Binance Chain mainnet. The main idea behind this initiative is to create a high-speed blockchain with significant bandwidth. To implement their plans, the developers chose the Tendermint BFT consensus model. The result is a system tailored primarily for the main network application – the Binance DEX trading platform.

Main Use Cases

At the moment, Binance is no longer just the world largest Bitcoin exchange, it is an entire empire, which has a venture capital division, a charity company, an IEO launch platform, an educational Binance Academy platform, and a research department.

In its blog, the exchange describes the following use cases for Binance crypto:

  • Payment of trade commissions. Traders get a 25% discount when using BNB;
  • Payment for goods and services;
  • Exchange for fiat funds as needed, including use as a collateral asset;
  • Use on social platforms;
  • Paying salaries to Binance employees;
  • Storage in Trust Wallet and other wallets;
  • Trade BNB as an altcoin;
  • BNB hodling for use on Binance Decentralized Exchange or other purposes;
  • Use in other blockchains interacting with BNB. Examples: Qlink and Skycoin.

Binance Smart Chain (BSC) Launch

At the beginning of 2020, the Ethereum-based DeFi sector began to grow and develop at an accelerated rate. On the eve of a new boom, Binance realized what exactly Binance Chain is missing – support for smart contracts and the ability to launch its own applications by various projects. The developers did not try to add smart contract capabilities to Binance Chain at the expense of its performance. They solved the problems by launching the parallel Binance Smart Chain.

Launched in September 2020, the BSC platform has become fully programmable and ready to work with smart contracts thanks to compatibility with the Ethereum Virtual Machine (EVM). This approach made it possible for developers to easily transfer projects originally launched on Ethereum to the new system.

Interacting with BSC applications will not be difficult for users familiar with the "classic" DeFi and MetaMask wallet. The latter is easy to configure to work with the Binance Smart Chain. The BSC system employs a hybrid Proof of Staked Authority (PoSA) model, obtained by crossing the Delegated Proof of Stake and Proof of Authority algorithms.

The small interval between blocks makes the processing of transactions fast – about 3 seconds. The higher gas limit compared to Ethereum also has a positive effect on throughput, allowing more transactions to be included in blocks.

The new network uses Binance Coin (BNB) to pay for transaction fees. Thanks to BSC, the latter has gone far beyond the exchange token for discounts on trading commissions and access to initial coin offerings. BNB has become the centerpiece of profitable farming.

Fees attractive to most retail users and high transaction speeds have been the main reasons for the growing popularity of BSC-based applications.

Similar to Ethereum with its popular ERC-20 standard, Binance Smart Chain users can create BEP-20 tokens. Binance Chain has its own standard – BEP2.

As of spring 2021, the range of BSC applications is not as rich as that of Ethereum. However, new projects are constantly appearing. Several well-known projects have already opened "bridges" between Ethereum and BSC, allowing you to switch between these networks.

Demand creates supply: the new DeFi ecosystem grows with projects, infrastructure develops. For example, recently GetBlock – a provider of access to full blockchain nodes – has successfully enabled their support to BSC nodes.

Binance Smart Chain has managed to achieve impressive success in a short time, considering the number of users, trading volumes, and TVL. The decision to build a system in the image and likeness of Ethereum, with similar tools and protocols, seems quite reasonable.

The high growth rate of the BSC ecosystem is likely to continue to positively influence the price of Binance Coin. The ecosystem's native asset is required to pay transaction fees and is widely used in applications that promise a high percentage of investment.

Read all the latest Binance news on CoinJoy Feed!

Binance Coin (BNB) Price Range

Binance coin price

Binance coin price today is $650. BNB all-time high is $690.93 (10 May 2021).

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The content of this article is for informational purposes only and should not be construed as investment advice. We ask you to do your research.

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