Binance has not made much use of blockchain to date. Like any centralized cryptocurrency exchange, all its action takes place outside the chain, and transactions are settled simply by updating the order book stored in the company's servers.
Its own BNB token is an ERC20, but it does not have much use for the Ethereum blockchain in which it lives, since its only case of real use is when it uses the Binance platform, where BNB transactions are re-established outside of the chain.
Deposits and withdrawals from clients. However, on March 13, the company broke the news of Binance Chain, a patented block chain with a range of applications.
In three paragraphs, the statement says: "After thoroughly investigating decentralized exchange frameworks and analyzing existing implementations, we believe that significant improvements can be made to provide Binance users with a level of business experience they are already used to."
This is worded in a confusing way but it seems to be implying that if Binance were to switch to a hybrid model, the user experience would not be affected, since the statement continues: "Centralized and decentralized exchanges will coexist in the near future, complementing each other, at the same time that they have interdependence. "
Why Blockchain?
The reason why Binance launches its own blockchain is deeply buried in the statement, but eventually comes: "As a public block chain, Binance Chain will focus mainly on the transfer and commercialization of blockchain assets, as well as provide new possibilities for the future flow of blockchain assets.
Binance Chain will focus on performance, ease of use and liquidity. Binance Coin (BNB) will be updated so that it exists in its own mainchain blockchain, becoming a native currency. At the same time, Binance will go from being a company to a community. "
When reading between the lines, it seems that Binance will launch a decentralized exchange that will operate along with its existing exchange. In addition to facilitating the exchange of digital assets, the DEX will likely function as a launch pad for new currencies and ICO.
Binance is a rising platform at this time, and has won praise for the way it has handled incidents such as the bomb and the viacoin dump and the unexpected downtime it was subjected to last month. He also has money to spend, he has already allocated 10 million dollars for hacker rewards this week.
12 months ago, Binance was a brave contender who could only dream of facing people like Coinbase and Bitfinex.
It is now on its way to becoming crypto's own Google, a key solution in hand for a full range of cryptocurrency services. The exchanges, perhaps in an attempt to protect themselves for the future and stop the increase of DEXes and atomic swaps, are expanding their offers, either through custody services, property blockchains or ICO incubators.
Binance users have welcomed today's news, but will be aware of the risks of excessive centralization and reliance on a single entity, even one whose platform may soon be decentralized.