What is Binance DEX? Binance Chain Explained
Binance is ready to launch its own decentralized exchange in Q2 — 2019 which will allow users to fully control their funds. The funds will be stored on users’ wallets. BNB token will be moved from the Ethereum network on its own blockchain – Binance Chain.
What is the Binance Chain
Binance is one of the most popular and largest cryptocurrency exchanges with trading amount about $3 BLN daily. Created in 2017 as a token, BNB coin was based on the Ethereum blockchain as an ERC-20 token. Then Binance announced moving to its own blockchain called Binance Chain. This news has attracted the interest of even more investors than before.
What is BNB
BNB is a tradable asset, its total amount is 200 MLN, ~1,600,000BNB tokens will be burned by Binance to make the remaining coins even more valuable. Once the testnet is verified for efficiency, Binance will begin a token swap that is predicted to take place in March 2019.Binance DEX will be launched on the Binance Chain, users will have to use BNB as a fee for transactions.
After launching the Binance Chain, there will be burned as many BNB coins as BNB tokens have already been burned before on the Ethereum Network and this process will continue. All BNB users will need to transfer their tokens to the Binance Chain to maintain their BNB token balance. To manage BNB you may use Atomic Wallet.
There will be no mining on the Binance Chain. Binance сhain uses a BFT (Byzantine Fault Tolerant) and PoS (Proof-of-Stake) consensus. This is similar to some popular blockchain systems, such as EOS or NEO.
On the Binance Chain you can:
- Send and receive assets
- Release your own token
- Burn / mint and freeze tokens
- Create trading pairs on Binance DEX and trade assets
- And most importantly, on the Binance Chain basis will be created a new cryptocurrency decentralized exchange – Binance DEX.
What is Decentralized exchange (DEX)
Decentralized Exchange (DEX) is a new type of the cryptocurrency exchange, in which traders own their private keys and control their funds. This solves a problem such as the fact that centralized exchanges store private keys in their bases and as the saying goes: Not your keys – not your Bitcoin.“Decentralized exchanges, when fully functional, will mark the end of any potential control by governments and will be the beginning of the largest economic boom in human history”. – John MacAfee
What is Binance DEX
Binance DEX based on the Peer-to-Peer (P2P) protocol and allows users to exchange crypto assets directly between each other. The main advantage of Binance DEX is the matching system. Binance DEX is created on a high powerful blockchain engine “Tendermint Core” with one-second block times, that provides the speed, which is also the same to centralized exchanges.
“With the core Binance Chain technology, Binance DEX can handle the same trading volume as Binance.com is handling today. This solves the issues many other decentralized exchanges face with speed and power”.
— CZ, CEO Binance
How the Binance DEX works
The difference is that the centralized exchange constantly matches orders, and in the Binance DEX all orders will be executed at the same time when it is added to the block.
If the order is not completed within 72 hours, it will be canceled. Here is what Binance post about Order Matches details:
— Orders with best bid price would match with an order with best ask price; — If the orders on one price cannot be fully filled by the opposite orders: for the orders with the same price, the orders from the earlier blocks would be selected and filled first.
— If the orders have the same price and block height, and cannot be fully filled, the execution would be allocated to each order in proportion to their quantity (floored if the number has a partial lot). If the allocation cannot be accurately divided, a deterministic algo would guarantee that no consistent bias to any orders: according to a sorted sequence of a de facto random order ID”.
The Binance DEX / Binance Chain Overview
Despite the fact that the idea of a decentralized exchange has already been implemented, and there is already exists an exchange with a decentralized order book, such as Waves Platform, for example, the Binance DEX is looking like one of the first mass-adopted solutions in the DEX area. In conclusion, here are the main advantages of Binance DEX:
- Private keys under user’s control
- Decentralized order book
- Matching with one-second block time
The combination of these three factors can really take the cryptocurrency market to the new level.
To get your own BNB address on the Binance Chain download a non-custodial Atomic Wallet that supports 300+ cryptocurrency assets, built-in exchange and “Buy crypto with a credit card” service. When Binance Chain will be launched you’ll get your own BNB address and will be able to perform a token swap to move your BNB to the Binance Chain.