- Steven Erquiza
What is Binance Coin?
The world of Decentralized Finance has a lot of competition. Bitcoin is the world’s first money that is programmable, but of course, many projects made it easier to program blockchains. The first was Ethereum, whose goal was to make it easier for the developers to create applications in the decentralized blockchain. One of the biggest competitors in the Defi space is the Binance Smart Chain (BSC). But what is Binance, the Binance Coin or BSC, and how do they work?
What is Binance?
Binance is a cryptocurrency trading exchange founded by Changpeng Zhao. It was originally based in China, but they relocated to the Cayman Islands because of increased Chinese regulations threatening their business.
What is a Binance Coin?
In 2017 Binance launched its Binance Coin as an ERC-20 token on Ethereum with an initial coin offering. The company offered 40% of the supply to the founding team, 10% of the supply to angel investors and the remaining supply to the public.
Binance coin is the cryptocurrency that Binance exchange uses. The Binance coin is used as a token, and it allows users to pay for transactions and trading fees at a lower rate than most tokens. It is traded with the BNB symbol. As of June 2021, Binance Exchange is considered the largest cryptocurrency exchange in the world; it supports more than 1.4 million transactions per second.
What is Binance Smart Chain?
In September of 2020, Binance announced that they created a new Defi platform, called Binance Smart Chain (BSC); it was later launched in April. The purpose of BSC was to offer an alternative Defi platform from the rest of the Defi platforms out there. BSC has $26 billion in total value locked in the various applications that run on the platform.
Over time Ethereum generated a lot of transactions, and they grew past what its infrastructure could handle. There was congestion, slow transactions and the fees were so high that sending money under $100 was almost impossible unless timed perfectly. Because of this problem, Defi exchanges were being used as an alternative to Ethereum.