Launched barely two years ago, Binance’s leap has been astounding. It is not only one of the largest cryptocurrency exchanges but a crucial cog in the world of cryptocurrency. The exchange is single-handedly responsible for creating liquidity for some of the useful, on-demand, periphery digital assets launched after an ICO.
Part of their success is down to Binance heeding to user demands. In response, it has continued to improve its user interface, increase reliability, keep up its throughput and caters for the needs of all types of users/investors regardless of trading experience. Through Binance, novice, as well as experienced traders in need of advanced tools, are catered from one platform with a guarantee that their initial funds are secure with a SAFU fund in place just in case of a hack.
Created in 2017 after a successful ICO raised $15 million and led by Changpeng Zhao, who before this was the founder of Shanghai-based Fusion Systems. With original headquarters in Beijing before shifting to the more accommodative Malta once Beijing cracked down on scam ICOs and crypto exchanges in Sep 2017, it has since spread further. Conspicuous and diverse in their choice, the exchange has a presence in Uganda, Jersey and has an MoU with the Government of Bermuda. In their shift to regulatory compliance, plans to launch a new exchange in the US through an intermediary. BAM Trading which is FinCEN registered and Koi Trading led by Chen will facilitate the transitioning by end of Sep 17, 2019.
The Role of Binance Coin (BNB)
In the midst of all this expansion, the demand for the exchange’s native currency, Binance Coin (BNB), continues to increase. In the last seven months alone, the asset has been one of the top performers. Posting 7.5X gains after bottoming up from lows of $5, BNB is unrelenting and could surge past $40 despite regulatory pressure, arm twisting the exchange’s leadership into implementing better KYC and AML rules and better still, avoiding support of securities.
The rapid rise of BNB has been on course. Strategically placed as an alternative token which users can use as a base to reap discounts in fees, users prefer holding an appreciating asset. However, it is not demand alone. Changpeng Zhao and team have a coin burning program specifically designed to increase the value of BNB while tirelessly marketing the asset to their clients with the promise of cheap transactions.
Because of this, critics are saying that Binance US may end up not supporting BNB since according to Howey Test, the asset qualifies as a security. This classification could send shockwaves for holders thanks to accompanying compliance requirements and demands of the US SEC. Solely because of this unwanted baggage, Binance US is likely to follow the Huobi US route, excise Ethereum based tokens, increase the number of Stablecoins and more importantly, drastically slash the number of coins on offer. Consequently, that will place US clients at a disadvantage as liquidity shrink as a result.
BTC Pegged Tokens, Binance Chain and DEX
For international clients, however, there are myriads of options. There is Binance Jersey where users can trade several coins like Litecoin, Bitcoin and Ethereum against the Euro and GBP. Besides, the exchange plans on launching a decentralized exchange built on Binance’s mainnet. Thanks to the launch of this chain, there is a migration from the Ethereum platform to the new chain from where it will be the foundation revolutionizing finance as the world sits up, noting the potential of cryptocurrencies.
Conceived out of extensive research, the Binance DEX promise to change the perception around decentralized exchanges crippling with low liquidity, unattractive UI and high latency giving room for front running. Through a Hackaton dubbed “Binance Dexathon” in Q1 2018, prototypes were presented. Once it’s up and running, the exchange will support “millions of crypto assets” saving fees while guaranteeing security. In fact, this could be a perfect repellant for hackers that managed to break into Binance’s coffers, making away with $40 million in a heist that Changpeng Zhao said was an “expensive lesson.”
Other than this noteworthy development and the geofencing of US clients, Binance has announced plans of launching tokens pegged to leading crypto assets like BTC. The token, BTCB compliant with the BEP2 token format, will be traded on the Binance DEX and Binance CEX.