Miguel Leite Follow Co-founder and CEO of Coinvision. +8 years experience in tech and blockchain startups. In crypto for the tech.

Can Binance Coin Takedown Ethereum?

2 min read

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The upward momentum of Binance Coin over past 4-months can be primarily credited to the successful operation of Binance Launchpad. However, there’s a new catalyst already shaking the market called Binance Chain that can change everything.

Highlights

  • The Binance Coin price recently set a new all-time high, having made gains of over 300% since the start of 2019
  • Recent Binance Coin price gains have been attributed to the upcoming launch of Binance’s new blockchain, Binance Chain
  • Some argue that Binance Chain will eventually rival Ethereum, by adding new features like smart smart contracts. However, Binance CEO Changpeng “CZ” Zhao, has denied rivalry claims

What is Binance DEX

Launched ahead of schedule on April 23rd, Binance DEX is a new Binance powered decentralized exchange. Specifically, one which promises to open the door to even more new ICO projects and more secure cryptocurrency trading.

  • When using Binance DEX, traders store funds in their own wallets until trades are executed, eliminating risks associated with centralized exchange hacking attempts
  • Binance DEX does not require users to confirm their identity
  • Unlike on centralized exchanges like Coinbase, users can generate 24-word mnemonic seed phrases to backup coin private keys

Does Binance Chain & Binance DEX Really Pose a Threat to Ethereum?

In the wake of the success of Binance Launchpad, Binance CEO CZ, has announced the transition of BNB Coin from Ethereum onto its own mainnet. At this point, Binance Chain will become a fully independent blockchain, powering the similarly new Binance DEX.

This is sparking a lot of controversy and many researchers already see Binance an Ethereum contenter. As for why this is, there are several reasons.

  • Binance is a centralized project and moves much quicker than blockchains that are struggling with decision making. Ethereum is particularly exposed to this kind of challenge
  • BNB is (or at least was) the most valuable ERC20 token on the Ethereum blockchain. (Having a market capitalization of $2.95 billion)
  • Big valuation means big money to invest in new projects, scale operations and overall dominate the market
  • Given the success of Binance Launchpad, new ICOs which choose to launch via Binance DEX, will receive more serious investor attention than on Ethereum
  • Several major projects have already decided to leave Ethereum in favor of the new Binance DEX.

Changpeng Zhao Downplays Ethereum Concerns

At present, Binance Chain does not support the creation of smart contracts. For this reason, CZ at Binance has downplayed the idea that Binance Chain will result in the downfall of Ethereum. However, Binance Chain does allow users to issue, burn, freeze, and unfreeze new tokens. CZ and Binance are also actively attempting to lure projects from Ethereum, using Binance’s existing trading volume as an incentive.

With the creation of Binance Chain, many argue that it is inevitable that Binance will expand and start supporting smart contracts in the future. If this does happen, BNB Coin would become a direct ETH competitor. However, Binance itself is still plagued by several consumer trust concerns.

Binance DEX & Launchpad Controversy

Binance and BNB Coin have indisputably positioned themselves as market leaders in 2019. However, several traders consistently cite not being able to purchase new ICO tokens on Binance Launchpad during new token launches. Binance has also been accused of threatening to delist tokens from its exchange, should they not migrate from Ethereum to Binance Chain.

There’s also some criticism around the fact that Binance is a centralised project and organization and that projects like Binance DEX or even a Binance smart contract platform are not going to be ever truly decentralized, a move that goes against the most dear principles of blockchain technology.

Binance Coin Upside Forecasts

Controversy aside, Binance upside forecasts for 2019 are overwhelmingly positive. 50% trading fee discounts when using BNB Coins to buy tokens on Binance already give BNB Coin fantastic utility value, but this look only gets more interesting when we look at other facts: launchpad rules make investors hold BNB; projects are moving to Binance DEX every week; and, finally, smart contracts are a next natural step for the company. Definitely a project that will continue on our watchlist.

Disclaimer
We are stating our vision and opinions, we are not giving you financial advice and if you invest in cryptocurrencies it is your full responsibility. You are investing at your own risk. Always invest only what you can afford to lose and try to diversify your investments. Finally, do your own homework and learn about the project use case, roadmap and team.