What is Binance?
Binance Exchange is one of the most popular cryptocurrency exchange which was started in China in 2017. It was founded in China by Changpeng Zhao (CZ).
The company started in Shanghai, moved to Hong Kong, and is now based in Malta.
Although Binance is less than two years old, it has become one of the most iconic brands in the crypto industry.
History of Binance
Binance was launched on July 14, 2017 with a ICO raising about $15 million in 2 weeks.
The exchange has its own token, called “Binance Coin (BNB)”. BNB was released as a part of the ICO of Binance.
On July 14, 2018, Binance celebrated its first year in business.
According to the first year report of Binance, the crypto exchange achieved top 10 status in trade volume rankings just 42 days after their launch, and they hit #1 after 165 days.
Moreover, BNB (Binance Coin) has continued to grow steadily in value in one year.
In one year, 143 tokens and coins listed with 370 trading pairs.
How the Exchange Works?
The Binance Exchange allows users to exchange one cryptocurrency for another. It uses a custom matching engine to match buyers and sellers at the requested prices.
Once trading is finished, Binance Exchange receives a small fee for providing the matching and exchange service.
In 2017, as the cryptocurrency market became more popular, cryptocurrency exchanges started to have some serious scalability problems which led to delays in transfers, and lost orders. This is the key factor that makes Binance Exchange number 1 as they managed to solve it.
Binance created their own trading engine which is capable of 1.4 million trades per second. When compared with other cryptocurrency exchanges, Binance’s own trading engine made some serious difference.
In addition, low trading fees are the second reason behind the Binance’s success. Moreover, if you hold BNB, the trading fee becomes even low which is a solid feature for day traders.
Binance Coin (BNB)
As I mentioned above,
BNB was released as a part of the ICO of Binance.
BNB is the token that used on the Binance platform.
There are several usecases and functions of BNB. I will mention some of them. If you want to read more, you can check this link.
1- Pay Trading Fees:
You will receive 25% discount on trading fees if you use BNB.
In order to take part in Binance Launchpad IEOs, you have to hold BNB over a 20-day period in a Binance account leading up to the day of the lottery.
3- Pay Bills:
You can pay your crypto.com credit card bill with BNB.
BNB is an ERC-20 token built on Ethereum, but it will be swapped to Binance Chain when the mainnet is launched.
Binance has various types of fees: trading fees, withdrawal fees, listing fees, etc.
Without holding BNB, the trading fee is 0.1%. On the other hand, if you hold BNB for your trades, you will receive a 25% discount.
The discount rate will decrease by 50% each year: 1st year – 50%, 2nd year – 25%, 3rd year – 12.5%, 4th year – 6.75%, 5th year – no discount.
Withdrawal fees are regularly adjusted according to blockchain conditions.
You can check it from here.
According to bitcoinist.com, Binance Chain will charge ‘close’ to $100,000 for listing new coins.
Users utilize BNB to pay transaction fees on the Binance blockchain. However, fees can be paid in several ways, but the network will charge BNB first and if the account has BNB, the system will apply a discount.
Binance Coin Burn
Every quarter Binance take 20% of their profits from fees and use it to buy coins and “burn” them.
When we look the price chart of BNB, we can easily see that burning BNB directly affects the price.
In January, Binance announced that they would launch new token fundraising events every month through its Binance Launchpad platform.
It is a unique platform that helps the projects and intends to conduct at least one Initial Exchange Offering (IEO) monthly.
An IEO is similar to an ICO, but administered by a crypto exchange.
Binance Launchpad already launched 3 IEOs:
And soon there will be MATIC Network sale.
Binance Chain & DEX
On April 18, Binance announced that the Binance Chain mainnet had been launched.
By their words:
“As a public blockchain, Binance Chain will mainly focus on the transfer and trading of blockchain assets, as well as provide new possibilities for the future flow of blockchain assets.Binance Chain will focus on performance, ease-of-use, and liquidity. Binance Coin (BNB) will be upgraded to exist on its own blockchain mainnet, becoming a native coin. At the same time, Binance will transition from being a company to a community.”
The first use of Binance Chain will be the Binance DEX. A decentralize exchange which aims to carry over the best features of the current Binance Exchange.
Moreover, Binance DEX is designed to handle the same amount of transactions with the current Binance Exchange.
“Binance Chain is a very simple chain in terms of application, but it can handle very large loads. It is our opinion that the load is more important than the features,” Binance CEO Changpeng “CZ” Zhao said about the upcoming blockchain.
BNB will be the native coin to be used for blockchain fees and other transactions.
In addition, Binance Chain will be more user-friendly and easy to use. You can create your own address via the Binance Chain Web Wallet, which has a user interface similar to what is on Binance.
For more information about Binance Chain, you can check the link.