Binance is moving its token off of Ethereum as it prepares to launch its own decentralized exchange.
Binance DEX’s testnet built on top of Binance Chain is set to launch “in the next week or two” according to Binance CEO Changpeng ‘CZ’ Zhao. In a Q&A live stream on Thursday, CZ revealed details about the launch of Binance Chain. Binance Coin (BNB), which was issued in the company’s $15 million ICO in 2017, will be migrated from an ERC20 token and act as the native gas of Binance Chain.
Binance Chain was built on Cosmos’ Tendermint protocol because its architecture was closest to what Binance was looking for, according to CZ. It will use Delegated Proof-of-Stake (DPoS) and Byzantine Fault Tolerant (BFT). Binance forked Tendermint “and chopped a lot of things out” including smart contracts because high throughput was more important than feature richness, according to CZ. The interface will allow projects to issue new tokens on Binance Chain, effectively running an ICO by raising funds in BNB.
Binance will get a small fee from each trade on DEX and there will also be a listing fee for projects that launch their token on Binance Chain, which will “probably be close to $100,000” but easily adjustable in the future. CZ said: “I want to deliberately set [the listing fee] little bit high because we want to reduce the number of spam or scam projects. There is also a voting process by the validators to be listed on DEX.” Similarly as on Binance.com, projects can choose to pay the listing fee in the newly issued token or pay with BNB and get a discount.
The Binance DEX will be non-custodial, meaning that private keys never leave the device, but CZ admits that Binance will have a lot of influence over the network and the validators in its early stages. Binance Chain will have only 11 validator nodes when it launches on testnet. He said: “I think it’s important for us to maintain that influence in the early stages. As time goes on, more and more validators will join and our influence will decrease.” Currently, all of the fees will be collected by the nodes.
The number of validators on Binance Chain will be smaller than some of the other public blockchains mainly for performance reasons, CZ says. “It’s going to be more like NEO or even Ripple – smaller number of nodes and each node will be rather large.”
The requirements for running a validator node from a disk storage perspective will be rather large since Binance Chain will generate a block every second and support “a couple thousand” transactions per second. CZ said that Binance DEX can already handle the existing Binance.com volume. He also added that it will be fairly easy to scale transactions per second as needed.
The inability to scale is one of the reasons why decentralized exchanges have failed to gain traction so far. DEX volumes have dropped to a new all-time low of $49 million for the month of January according to Diar. Another reason is the lack of liquidity, which Binance is hoping to change.
After the testnet launches, it will be possible to access Binance DEX’s client UI via web browser. Binance has already given early access to the developers of wallets, blockchain explorers and other tools so the integration would work from Day One. Ledger Nano S will be the first hardware wallet to support Binance Chain and DEX. Ledger Nano X will be supported next and KeepKey and Trezor will follow.
Eventually, Binance wants to implement other features such as cross-chain interoperability, since Tendermint already has these features. CZ says interoperability won’t come until v2 or v3 of the Binance DEX but thinks that it will come fairly easy as Binance is “in one of the best positions to work with other projects or blockchain teams because in most cases, [Binance] already [has] relationships with the other teams.”
Binance Chain was built Tendermint protocol and uses DPoS and […]
Source: UnSplash It is no secret to anyone. The economic situation in Venezuela has made bitcoin a clear alternative. On… Read More
- Consolidation within a common and strong continuation pattern continues. - The length and end of this consolidation can be… Read More
While many cool applications have helped broaden the appeal of Bitcoin SV (BSV), one of the earliest applications has been… Read More
Bitcoin has often been compared with gold as it shares a number of similar traits. Both are safe haven assets,… Read More
For first-time vapers, merely inhaling vape juice from an e-cigarette caused their blood vessels to constrict, stiffen, and circulate less… Read More