What is Binance: An Introduction
Currently Binance is the most popular cryptocurrency exchange in the world. Binance provides user friendly and secure platform for trading and holding cryptocurrency. Charging low gas fees for crypto transfer is also one of the reasons behind the massive popularity of Binance exchange. As the Binance gained more popularity, they realised that they need their own blockchain, sooner or later. That’s why Binance created their own blockchain as Binance chain. Later they introduced BINANCE SMART CHAIN blockchain, which is compatible with ethereum blockchain.
Binance Smart Chain:
Basically Binance network runs on two separate blockchains, the first one is Binance chain later they introduce more compatible version Binance smart chain. It’s necessary to understand that if a user can lose their assets if they can’t differentiate between these two different blockchains.
So why Binance launched another blockchain network when they already had one? The answer is to make their network to more compatible with Ethereum blockchain and to get leverage on vast Ehereum community. Binance introduced smart contract in BSC so that anyone can launch their BEP20 tokens. On the other hand instead of writing a new smart contract they just forked Ethereum smart contract. In layman terms they just copied Ethereum smart contract code and made a few changes and applied in their network. It also facilitates developers to move their project from Ethereum network to Binance smart chain easily.
By developing Binance smart chain they empowered people to make faster and cheaper transactions. On Ethereum network users has to pay higher gas fees, which can vary $5 to $50. With Binance anyone can transfer their funds from Binance smart chain wallet to metamask at lower gas fee as $1 or less.
Binance smart chain in short BSC, facilitate community members to their own BEP20 tokens. There are also few downsides also, due to lower gas fees and ease of token creation so many scams also came into existence.
BNB coin Tokenomics:
BNB coin Tokenomics: Binance minted 200 million BNB coin at starting and allotted 50% coin to ICO at 15 cents each. 40% BNB allotted to the developers and 10% to angel investors. Also Binance follow interesting strategy to appreciate BNB value, after every 3 months Binance buy back BNB with 20% of profit and burn them. This decreases total supply of the coin and pup the price of the coin. This process will continue until total supply of BNB decreases to 1 Million that is 50% of total minted coin.
By using two different blockchains Binance is following two pronged approach in order to grow. It is leveraging ethereum blockchain to grow in NFT space along with organic grown of its Binance chain as acceptance of crypto currencies surge across the world.