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CryptoDex #1: Binance Coin (BNB)



Build & Build, better known as BNB or Binance Coin, is currently the third largest cryptocurrency by capitalization as well as one of the most popular virtual currencies of the 2021 bullrun. Its history, as well as its fame, is closely linked to the well-known exchange platform Binance, which to date is the leading cryptocurrency operator as well as the top crypto exchange by volume and trade in the world. BNB serves as fuel for the entire ecosystem and in particular for its namesake blockchain, the BNB Smart Chain (BSC). The crypto was born in 2017 but initially its operation was limited to a simple currency within the ecosystem, the possession of which allowed users to benefit from discounts on fee payments. Soon, however, with the emergence of Binance's smart chain, the importance of BNB in the functioning of the entire system made it a true utility token, being able to be used to take advantage of the various services made available by the platform. Later, the token's notoriety will also allow BNB to be traded on exchanges and wallets outside Binance, as well as to pay for goods and services on third-party platforms (e.g., Travelbit, Pundi X, Gifto, CanWork, and VIBEHub). To date, BNB represents an established entity in the crypto world, mainly due to the evolution and expansion of Binance, which has greatly expanded the catalog of uses of its currency.


On a technical level, BNB is based on the same algorithm as Ethereum, namely Proof-of-Stake (PoS), and is an ERC-20 token built on a smart contract. Binance's blockchain features make it more scalable, more secure, and more efficient than more traditional cryptocurrencies, especially in terms of transaction speed. This also provides an ideal habitat for the emergence of new innovative projects, counting numerous DeFis, dApps and tokens of various types in its ecosystem. In addition to the high technical level, the value of the token is also maintained thanks to Binance's policy of periodically burning BNBs until the supply of the token has reached 100 million units over the next few years, gradually reducing its supply.


Binance Coin, as mentioned above, is the native token of the Binance platform, the world's leading cryptocurrency exchange, owned by the company of the same name. Founder and current CEO Changpeng Zhao founded the company in China in 2017, but following the Chinese government's ban on cryptocurrencies he decided to move the headquarters to the Cayman Islands, totally disconnecting the project from the Dragon's influence. Throughout its existence, Binance has often faced thorny legal issues in various states around the world, particularly in the United States of America and the United Kingdom. However, there have been several openings in licensing at the European level, such as in France and Italy, where Binance was granted approval in May 2022 in the provision of digital services and assets in those countries. Despite this, the company is still involved in investigations on multiple fronts, such as in the United States of America (where, however, it continues to operate in 44 states), Germany, Thailand, India, and Japan.


As for the Binance ecosystem, of which BNB is the fuel, the BNB Chain also provides for a stablecoin pegged to the value of the U.S. dollar with the ratio of 1:1, the BUSD (or Binance USD), today the third largest stablecoin by market capitalization with about $20 billion. Its existence allows investors to purchase a token that is more stable than the native coin without necessarily leaving the crypto market. This makes the Binance ecosystem even more competitive, allowing the platform and Binance Coin to gain trust with users. In addition to this, Binance provides a number of services and opportunities in order to further consolidate its position in the market . In fact, in addition to the exchange service on as many as 1704 markets, Binance provides a wide range of services, such as staking, farming, launchpad, mining, leveraged trading, some futures and otc and peer-to-peer markets as well as a dedicated NFT platform.



For the future, the Binance CEO outlined a strategy to consolidate the technical structure, announcing improvements in network decentralization, infrastructure capacity of BNB Chain-based sidechains, and the operation of dApps on the blockchain. In addition, Changpeng Zhao said he was particularly interested in the implementation of security on the BNB Chain, which has been repeatedly used in the past to develop scam and token scam projects. In this regard, the Binance mastermind expressed strong support for the Crypto Regulatory Framework sought by Biden to ensure a minimum level of protection for consumers, investors, and businesses approaching the crypto market in America. In fact, CZ stated on Twitter how all this is necessary to achieve digital and responsible innovation of blockchain-based projects.


Despite this, there are several criticisms levelled at Binance by various industry experts. First of all, BNB represents the token of a for-profit company, making the crypto itself and its value can be influenced by the will of the organization. The existence of an organized structure behind Binance Coin also exposes the entire project to possible critical issues related to judicial retaliation that may affect Binance's administration, including Changpeng Zhao himself, as has often happened in the past. In addition, while the existence of an administrative body allows for better evolution of the project, it inevitably diminishes the decentralization of the blockchain. In this regard, the validation system of the BSC nodes does not help either, as the network has only 21 validators elected from among the main BNB holders, contributing to increased centralization. Others, on the other hand, believe that the very economic solidity of Binance, to this day a real credit institution often likened to a sort of central bank for cryptocurrencies, represents an element of guarantee on the project's resilience, always being able to count on the income produced by the giant business that Binance has built up over the years.



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