Blockchains 101: Binance Coin
Tags: Pos, Binance Chain, Bnb Coin, Dapps, Dex

#1 Crypto Exchange’s cryptocurrency

Introduction

Binance Coin (BNB) is the native cryptocurrency of the crypto Exchange Binance.

Launched originally as an ERC20 during an ICO in July 2017 raising $15M, the token has since migrated to its own blockchain built out the COSMOS (ATOM) SDK (BEP2) in April 2019.

Binance BNB logo

Description

BNB is using the Byzantine Fault Tolerance (BFT) dPOS consensus mechanism (derived from COSMOS) which is also in use on Bitcoin (BFT PoW).

BNB relies on a network of trusted private nodes acting as validators and is therefore a private (centralized) network.

BNB has a blocktime of 1 second (fast).

Staking

It is possible for BNB holders to delegate their BNB to nodes controlled and operated by Binance’s validators in order to obtain staking rewards overtime.

SideChains

Binance Chain allows the creation of Sidechains on the BNB network (as per its COSMOS architecture) via smart contracts and a decentralized sidechain bridge. Sidechains act as independent blockchains but rely on the consensus mechanism of the main-network.

The benefits of sidechains are those offered by a full blockchain combined with the interoperability of the cryptocurrencies hosted between the different sidechains of the network. Thus, it is technically more advanced than tokens (relying exclusively on one or several smart contracts).

Deflationary

In addition to previous mechanisms, Binance has introduced a burning mechanism on BNB (similar to a stock buyback). Each quarter, a fraction of the profits generated by the company is allocated to the buyback for removing/burning (destroying) BNB from the circulation, until up to 50% of the total supply (as per Binance’s Whitepaper).

Initially, the burn was indexed on the company’s profits (Binance burnt about 10% of the supply over the first 3 years) but has then been re-indexed on the company’s reported trading volume (slower burning rate).

dApps

As for COSMOS, Binance chain allows smart contracts and thus the creation of decentralized Applications (dApps) giving functionalities to mini programs run directly on the blockchain such as games, decentralized exchanges and swaps (dual-chain trading) or DeFi protocols.

Binance DEX

Binance is operating its own Decentralized Exchange (DEX) built on Binance chain (BNB) capabilities. Binance DEX doesn’t requires to pass a KYC and works with most of the main mobile and hardware wallets such as Trustwallet, meet.one or Atomic wallet.

Binance’s DEX wallet connection interface

Due to the specificity of the BNB chain as interoperable (cross-chain), built on cosmos (1 sec blocktime) and partially centralized, transactions speed is higher than on most of the DEX built on Ethereum.

Technical specificities:

Type: Native Coin

Native Coin Total Supply: 125,000,000 BNB

125,000,000 BNB Subunit: NA

NA Consensus: Proof of Stake (PoS) Tendermint BFT

Proof of Stake (PoS) Tendermint BFT Encryption: secp256k1

secp256k1 Privacy: Pseudonymous (Low)

Pseudonymous (Low) Blocktime: 1 second

1 second Coding languages: Go

Documentation:

TradingBull.io

Telegram community: https://t.me/TradingBull_DA

Twitter: @_Digital_Assets