Binance is making plans to move its token (BNB) off the Ethereum network as it prepares to launch its own native blockchain and decentralised exchange.
According to Binance CEO Changpeng ‘CZ’ Zhao, Binance DEX’s testnet built on top of Binance Chain is set to launch “in the next week or two.”
— Binance (@binance) February 7, 2019
In a live Q&A on Thursday, CZ revealed further details about the launch of Binance’s own native blockchain for the BNB token.
Building out its own blockchain and a decentralised exchange was always the set vision since the project’s $15 million ICO back in the summer of 2017.
The BNB token will be migrated over from its current implementation as an ERC-20 token on the Ethereum blockchain and will act as the “native gas” token of Binance’s newly created blockchain.
Binance Chain to use Delegated Proof-of-Stake consensus
CZ said that the new Binance Chain blockchain will have a Delegated Proof-of-Stake (DPoS) consensus algorithm. The chain will be a forked version of the Tendermint protocol, but according to CZ, Binance Chain will have “chopped a lot of things out,” including smart contracts capability, due to “throughput being more important than feature richness.”
The interface will also allow projects to issue new tokens on Binance Chain (effectively running an ICO by raising funds in BNB). This ability to issue tokens (like ERC-20 tokens) mirrors the most widely adopted feature used today on the Ethereum network.
Binance DEX will charge a small fee for each trade made on the platform. There will also be a listing fee for projects that launch their token on Binance Chain, which will “probably be close to $100,000,” said CZ.
CZ went on to say that he “deliberately set [the listing fee] a little bit high because we want to reduce the number of spam or scam projects. There is also a voting process by the validators to be listed on the DEX.”
Binance DEX will also be fully non-custodial, meaning that private keys never leave the user’s device. However, CZ did admit that Binance will have a lot of influence over the network and the validators protocol in its early stages.
Hardware wallet support
The Ledger Nano S will be the first hardware wallet to support Binance Chain and Binance DEX, with Ledger Nano X, KeepKey, and Trezor support to follow.
CZ concluded that Binance DEX will be able to handle all the existing Binance.com volume on launch.
In recent months, we have seen a significant drop-off in DEX usage, but can the man whose centralised platform proved the early critics of his ambitions plans wrong make the same impact in the declining DEX market?