Following major declines in global trading volume, cryptocurrency exchanges across the board have seen significant losses since the start of 2018. Coincidentally, the corresponding exchange tokens have also suffered. However, Binance Coin (BNB) looks poised to defy this trend with a great market response to a recent major announcement.
Earlier today, the Binance team published an article regarding a new, major innovation they are working toward: Binance Chain. Binance Chain represents the leading altcoin exchange’s answer to cost and scalability issues, as well as a viable upgrade to help maintain the exchange’s edge over its competitors.
What is Binance Chain?
Binance Chain will be a custom, public blockchain tailored specifically to trade and transfer blockchain assets. It will serve as an intuitive and reliable integration of a decentralized exchange infrastructure. Binance plans to create an ecosystem in which its existing, centralized exchange services will cooperate seamlessly with this new, decentralized platform. The team explains that this move will allow the exchange to grow “from being a company to a community”.
How is this relevant to BNB?
Binance Coin will be the currency used as the fuel for the custom Binance Chain ecosystem. Currently, BNB is only an ERC20 token. However, when Binance Chain launches, BNB will be transferred over to this highly specialized network. As the primary vehicle for a decentralized exchange unparalleled by any existing exchange tokens, it is likely that BNB will see an increase in demand.
Immediately following this announcement, BNB saw a price surge of almost 38% from US$8 to US$11. As was expected, there was a minor retracement following the initial pump, but the coin is still trading at US$10.15, over 25% more than the going rate 24 hours prior.
As is the case with any major development, it is highly unlikely that we will see the public launch of Binance Chain in the coming weeks. However, given Binance’s impressive track record of efficient development, this project is likely to come to fruition sooner rather than later. While it is unclear what exact privileges will be associated with owning BNB on Binance Chain, this pump suggests that speculators have faith in Binance to put forth cutting-edge solutions. After all, Binance even expressed that its focus is on “creating history”. If such a goal is achieved, even BNB sold today above US$10 may seem like a massive bargain in the near future.