Binance to challenge Ethereum with the launch of its own Decentralised Blockchain
Earlier in the day, Binance, the world’s largest crypto exchange with more than 10 million users announced the launch of its own blockchain – the highly anticipated blockchain protocol targeted at aiding decentralized exchamges (DEX).
As per reports the newly launched blockchain will be called Binance Chain mainnet. Binance also further stated that by the next week it will also launch a decentralized exchange.
The native token of Binance, Binance Coin (BNB), will function as the main cryptocurrency of Binance Chain and will be transferred from the Ethereum network. Momentarily, BNB features as the most valuable token on Ethereum as an ERC20 smart contract token having a market capitalization of $2.95 billion as per coinmarketcap.
The Binance team had an exclusive interview with CCN where they revealed that the Binance Chain is custom-built for decentralized exchanges with high throughput and low latency, which in turn provides a more efficient protocol for decentralized applications (Dapps) that demand for a higher transaction capacity.
In a statement, The Binance team also stated that aims to leverage the large capacity of Binance Chain to attract more DEX and Dapps and DEX with economic freedom.
According to the Binance Team: “Binance Chain was created to support the issuance and exchange of digital assets. Any project can issue new tokens on Binance Chain, and existing tokens that don’t depend on smart contracts are welcome to migrate to Binance Chain, to natively exchange on Binance DEX and gain the benefits from this low latency and high throughput network. This will inspire more economic freedom, and more projects participating in Binance DEX will help further the long-term vision of peer-to-peer cryptocurrency trading.”
As per reports, within the next few days, Binance Chain will try to replicate the supply of BNB on Ethereum, it will burn 11,654,398 BNB, as well as try to maintain the fixed supply of 200 million BNB coins.
In the interview with CCN, the Binance team said,“The first batch of 5,000,000 BNB will be allocated and deposited into an address belonging to Binance.com in order to convert the ERC20 BNB for existing owners. In order to keep the total supply of BNB constant, Binance will burn 5,000,000 ERC20 BNB as well.”
The Binance team then additionally went on to explain, “BNB will be used as gas on Bin
ance Chain, to assist network transactions. Also, for background on the migration: ‘BNB will be converted from ERC20 tokens into native BNB tokens running on Binance Chain via the exchange platform at Binance.com, a pragmatic and efficient way to perform the initial token swap.”
Reportedly in the past scalability and decentralization have been amongst the several criticisms received by DEXes.
In the past, a DEX has been described as a platform on which users have full control over their funds in a non-custodial ecosystem by almost a majority of developer decentralized exchanges.
Meaning, even during trading, the risk of a potential hacking attack putting user funds at risk is non-existent as users always have control over their funds.
As explained by Amir Bandeali, CTO of Ox, “It’s different from a centralized exchange because these relayers are not holding user funds at all. They are completely non-custodial. We have seen a lot of relayers starting to make open source market-making tools.”
Back in February, Changpeng Zhao, the CEO of Binance, had given his response towards the criticism aimed at the level of decentralization of DEXes, stating that the sole purpose of developing a DEX is to provide users on the platform complete access over their money.
A statement given by Zhao reads as follows, “A few guys seem to be bent out of shape, take it easy. Don’t call it a DEX. Call it an exchange where users control their own funds, runs on a fast blockchain maintained by a number of nodes, plus a fast and easy UI. That’s it. Whatever makes you happy. At the end of the day, the market will vote. Let’s see how the adoption goes on the mainnet.”