Blockchain technology is becoming popular day by day. This is because it’s there for everyone and you can customize it to do anything. Exchanges companies have however not been very active in the technology because it not largely required by the exchanges. Binance has however decided to launch its own proprietary blockchain which it plans to use to do several things.
In the past Binance has not had much use for Blockchain technology because like the other exchanges almost all its transactions happen off the chain. Exchanges transactions are settle by just updating the order bookstore which is on the company’s servers. The company has a BNB token which is ERC20 but does not use much of the Ethereum Blockchain it lives on because of the off chain transaction settlement.
Binance mainly controls customer deposits and withdrawals. However yesterday the company announced that it was launching Binance Chain which will be a proprietary blockchain with different applications.
The company through its statement stated that: “After vigorous and careful research on the decentralized exchange frameworks and continuous analysis we believe that many improvements can be made in improving Binance users’ level of trading experience which they are already accustomed.” This is not very clear, but it seems to imply that the company wants to switch to a hybrid model to better user experience. The statement went on to add that: “There will be a co-existence between centralized and decentralized exchanges in the near future. They will complement each other and will be interdependent.”
Binance stated that it was launching its blockchain because:
“As a public blockchain, Binance chain will focus on transfer and trading of Blockchain assets more to providing new possibilities for the future flow of blockchain assets. The chain will mainly focus on ease of use, performance, and liquidity. This will also enable Binance Coin to be upgraded to exist on its own blockchain mainnet thus enabling it to become a native coin. This is also made to help Binance transition from being a company to being a community.”
This latest move shows that Binance will launch a decentralized exchange which will operate alongside the existing exchange. More to the facilitation of digital assets trading the DEX is likely to operate as a Launchpad, for now, coins and ICOs. Binance is highly trusted especially after how it handled incidences such as Viacoin pump and dump. Its, however, has hard its downside especially the hack scare this week where it had to earmark $10 million for hacker bounties.
Its improved technology has made it move to be one of the world’s biggest exchanges despite being new in the market. Yesterday’s news was well received by its users. Some, however, were very mindful of the risks of over-centralization and the reliance of a single entity.