Binance is often referred to as the world's number one crypto exchange platform in terms of trading volume, however, this crypto giant offers far more than their reputable centralized exchange. Binance has created its own blockchains; decentralized exchange, charity and funding schemes, education academy, Trust Wallet, alongside research monitoring the latest innovations and market analysis within the crypto industry.
In this article, we dive deeper into the services offered by Binance, explain how the protocols work, and the different ways to get involved in cryptocurrency through various platforms in the Binance ecosystem. Firstly, we'll explain the blockchain foundations of Binance and their most recent community update.
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The Binance Chain is the blockchain running and transacting the Binance Coin, BNB. The design of the Binance Chain protocol was optimized for fast transactions on their decentralized exchange. In order to meet these expectations, the structure of the Binance Chain blockchain was configured inconveniently, with limited restrictions for use of smart contracts.
With scalability in mind, the use of smart contracts on the Binance chain would slow down transactions and even congest the Ethereum network (anyone remember CryptoKitties?) so Binance has chosen to go about a different way of expanding the network.
Binance Smart Chain
Binance Smart Chain is a blockchain built with the flexibility for smart contracts, decentralized applications, and cryptocurrencies. Binance Smart Chain runs in parallel with the original Binance Chain, however, is not considered to be a layer 2 solution or sidechain, as the Binance Smart Chain could operate independently if anything were to happen and the Binance Chain went down.
Binance Smart Chain is EVM-compatible (Ethereum Virtual Machine) meaning that it is super easy for developers to move their projects onto the blockchain, and for users to integrate their Metamask wallet when using the blockchain.
The two chains run separately side-by-side, although there are extensive interoperable features in the Binance ecosphere that allow users to have fast, 3-second transactions with the DEX on the Binance Chain, and the ability to explore Dapps created on the Binance Smart Chain using their native token standards BEP-20 (similar to Ethereum's ERC-20 token).
Tokens on the Binance Chain include the BEP-2 and BEP-8 standards, and these are tradable to the Binance Smart Chain's BEP-20 tokens. These tokens can be staked to earn rewards using the Proof of Stake consensus algorithm. Learn more about PoS and PoW here!
In April 2020 this year, Binance proposed the whitepaper for the Binance Smart Chain. Binance teamed up with an array of instrumental and advantageous projects and current platforms, to assist in the growth and strength of the security and launch of the BSC. Projects include ChainLink, Band Protocol, Ankr, Trust Wallet, Ontology, Travala.com, Swipe, Aave, 1inch.exchange, CREAM, and many more. Binance advised it will be releasing more information around these partnerships soon.
One month after the proposal, the first testnet was launched where developers created decentralized applications using smart contracts, and BNB coins were introduced to the new use of Proof of Staked Authority consensus.
After a few months of tweaking and adjustments, the mainnet for Binance Smart Chain went live with BNB staking in September of this year.
To stimulate innovation and assist in creating the latest decentralized app, Binance has set aside an investment pool called Accelerator Funds, to invest in the latest up-and-coming projects built on the Binance Smart Chain.
Binance CEO CZ, Changpeng Zhao, chose 6 projects last month, from nearly 200 applicants, each receiving $350,000 in funding from the $100 million Accelerator Funds pot. The projects were chosen based on their product, contribution to the blockchain ecosystem, and the teams behind the projects.
The chosen projects for Binance are all DeFi platforms in 2020 with AnySwap, Arkane Network, BakerySwap, Bitquery, PancakeSwap, and Proxima being chosen for the grant. PancakeSwap is an automated market maker and is currently the “number one liquidity provider” on the Binance Smart Chain in terms of the number of users and trading volume.
To further boost the development of decentralized apps on the Binance Smart Chain, Binance has announced this month it is putting $5 million worth of BNB into a new 'BUIDL Reward Program' to incentivize developers to build, or “buidl” new and exciting dApps on the blockchain.
The rewards are split in proportion to the activity of your platform, and Binance has stated they will adjust rewards accordingly as the ecosystem grows, to maintain the best rewards for the entire community.
If you deploy callable smart contracts, you have the option to register your smart contracts with a designated smart contract on the Binance Smart Chain. During registration, you will need to register your reward-receiver address for the registration to be honored.
You can check the result of your registration on the Binance Smart Chain through their smart contracts. From here, "all the gas fees paid from transactions that call the registered smart contracts will be calculated, and a certain percentage will be recorded and accumulated as a reward."
Rewards are paid in BNB, and to help maximize input, Binance has reported it will offer developers 30% of gas fees awarded in BNB until the end of 2020, or until the $5 million runs out. The first rewards are being airdropped on 31st October.
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'A token launch platform for transformative projects'. Binance Launchpad offers developers the chance to get their projects in the hands of the millions of Binance users and beyond, using their own launch platform for new tokens and projects.
Binance Launchpad began in February 2019 with BitTorrent being their first token launch. The following month both Fetch.AI and CELR were launched. Since then Binance Launchpad has acted as a springboard for many popular projects including Matic, Elrond, Band, Kava, and most recently, Injective Protocol.
Projects must be submitted and accepted before entrepreneurs can launch their project on Binance Launchpad, receiving wider access to resources and support from different branches across the Binance ecosystem.
The recent successful oracle project Band Protocol was the first Binance Launchpad project to be listed on Coinbase Pro - a proud moment for CZ.
Binance Launchpool is one of the latest projects in the Binance ecosystem, offering a novel and safe way to farm new up-and-coming tokens.
Binance users can now stake their BNB, BUSD, and other selected tokens. The introduction of the Launchpool was celebrated with users receiving BEL tokens, for simply hodling their ARPA, BNB or BUSD on their Binance account.
The rewards are automatically distributed to your Binance wallet daily between 00:00 AM and 1:00 AM (UTC), for a maximum of 30 days. The token will then be listed after the first week of the 30 days, when you are free to trade, hodl, or buy more!
Binance Launchpool is the easiest and safest way to farm new tokens prior to them being listed on Binance - guaranteed. Anyone with a Binance account can sign up, and the minimum amount needed to stake is just 0.1 BNB, with no upper limit. Any BNB staked can still be counted towards usage with the Launchpad, airdrops, and other VIP benefits.
The first-ever double-launch project, through both the Binance Launchpad and Launchpool, was Alpha Finance Lab, earlier this month. Alpha Finance Lab boasts an eco-system of 'automated yield-maximizing', interoperable, DeFi products, currently in use on the Ethereum and more recently, the Binance Smart Chain blockchains.
The first Alpha product is Alpha Lending, a decentralized lending protocol featuring algorithmically-adjusted interest rates created on the Binance Smart Chain. The Alpha Lending platform is hedging itself as the frontrunner of cross-chain DeFi and cross-chain liquidity.
The $ALPHA token is the platform's native currency that can be used for staking, governance, or liquidity mining.
Other Alpha products are currently in the development phase, with more to be announced when they're ready to be deployed in action, according to Alpha Finance Lab.
In the tune of supporting innovation and increasing global blockchain adoption, Binance Labs is the 'venture arm' of the Binance ecosystem, by investing in blockchain and cryptocurrency entrepreneurs and communities.
The ethos behind Binance Labs is to invest in and support the creation of the decentralized web, guiding and backing technical teams who can create a positive and lasting effect in the blockchain ecosystem.
Binance Labs is actively empowering the establishment of a decentralized ecosystem supporting projects regardless of size, from the individual entrepreneur or small-team start-up to full-scale communities and industry projects, that are committed to developing a brighter, safer, decentralized version of the internet.
In 2018 Injective Protocol was one of 8 projects selected for incubation with Binance Labs, and 2 years on, Injective Protocol has become the first Binance Labs incubated Project to launch on the Binance Launchpad.
In an interview with globenewswire.com, the founder of Injective Protocol, Eric Chen, says “Since 2018, Binance has supported our vision of building a product that helps solve major issues that traders face daily when using exchanges such as poor [user experience], slow speeds, centralization, and high fees. The Binance team recognized that Injective helps to alleviate all of these problems while offering the best trading experience for both institutions and individuals globally. We are very excited to continue our close relationship with the Binance team”
This is the place to go to when looking for the latest projects coming to the exchanges. Before any token event with the Binance Launchpad or Launchpool, Binance Research will have posted an article covering all aspects of a new project and tokenomics, that is soon to be launched on to the exchange.
Binance Research offers project reports on the latest token projects, either available on the exchange or soon to be. In addition, this arm of the Binance ecosystem offers the latest insights and analytics on what's new in the crypto industry.
Binance hosts the largest centralized cryptocurrency exchange in terms of market cap and trading volume, offering over 200 different crypto assets to trade with. The Binance exchange has several features that cater to different levels of experience.
The exchange features several fiat on-ramp options, alongside margin, P2P, and OTC trading options. The Binance exchange also hosts the wallet for the Binance Card crypto debit card.
The beginner crypto trader can make market price swaps quickly and easily, while the more advanced trader can utilize the various on-screen indicators to assist with technical analysis.
With such high levels of liquidity, frequent new listings, and bonus rewards, Binance is the preferred centralized exchange for crypto traders across the world with many different levels of experience.
Hodlers of the native Binance BNB token receive a 50% discount on trading fees on the Binance exchange. Binance also offers an array of staking options through the Binance Launchpool, allowing users to earn a passive income by holding tokens. For example, BNB holders also receive staking rewards in SXP, and the exchange recently ran a staking campaign to earn interest on DOT.
Though there are many to choose from, the most popular crypto exchanges for beginners are usually Binance and Coinbase. Although Binance has some very simple options, it also offers many advanced options that can be intimidating to beginners. If you’re not sure whether the Binance exchange is for you, check out our Coinbase vs Binance article.
There is a lot more to the Binance ecosystem than first meets the eye, however, most Binance users will come across the brand through the centralized exchange. Binance caters to a wide demographic of users, from newcomers with zero Bitcoin or blockchain exposure, to full-stack blockchain developers.
Binance must also be credited for its commitment to education in blockchain, helping new users grasp the basics on the Binance Academy, but largely it's open-source, transparent blockchain donation system for their Binance Charity platform. The aim is to help the 'bottom billion' in the world through funding projects that help tackle the root of social problems. Recent donations have fed nearly 6000 children and helped support over 1000 disaster victims with daily relief baskets.
Binance's overall mission is "promoting greater freedom of money to everyone", and through the opportunities and possibilities created within the Binance ecosystem, the future is bright for the largest global crypto exchange.
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