What is BEP2 — An Introduction
As was recently mentioned in an article by the Daily HODL, “DARCwallet Broadens Appeal: Launches Support for Binance’s BNB Token,” our flagship blockchain product is seeing a lot of positive development right now. To celebrate the integration of the native Binance token and other Binance Chain assets into DARCwallet, we are excited to provide our community with an overview of Binance’s public blockchain efforts and why we decided to add support for this innovative next-generation blockchain.
The Binance Chain Vision
Binance has almost since its inception been one of the top crypto-to-crypto exchanges in the world. Not surprisingly, having quickly met his goal of becoming the #1 exchange website within a year of his launch, Binance CEO Changpeng Zhao set his sights on even bigger goals. With a successful mainnet launch of Binance Chain on April 18, 2019, CZ announced to the world his intention to lead Binance to become one of the largest blockchain-based decentralized institutions in the world. It is one thing to run a centralized exchange that allows you to trade more than 100 cryptocurrencies at incredibly high speeds (1,400,000 orders in one second) and with unprecedented verifiable liquidity. It’s another thing entirely to do that within the context of a decentralized exchange structure.
To accomplish this gargantuan task, CZ announced over a year ago Binance’s intention to create Binance Chain. The new blockchain infrastructure is purpose-built for performance, liquidity and ease-of-use. It is based on Tendermint technology and, specifically, the Cosmos SDK. Although the chain is not initially decentralized or interoperable, this robust technological base will allow it to achieve these goals within a reasonable time frame. Binance Chain is a perfect example of a use case specific blockchain that enables the seamless creation of digital assets on an integrated and increasingly decentralized alternative exchange marketplace.
The Benefits of the BEP2 Token Protocol
In order to transfer value on the Binance Chain, tokens must be compatible with the Binance Chain Evolution Proposal 2 (BEP2). BEP2 is a token management set of rules and pre-defined criteria implemented to launch on-chain assets on Binance Chain. Every day, projects announce the transition of their tokens, or a portion of their token supply, to BEP2 from their original mainnet, ERC-20, or NEP-5 (the native token protocol on the NEO public blockchain) implementations. Even Bitcoin, which Binance released a pegged BEP2 version of this summer, can benefit from the speed, security, transactional efficiency of this new blockchain platform. A variety of stablecoins, like TrueUSD and Stably, have brought their business to the chain. Now there are 133 assets listed on Binance Chain. You can track that number with this link to Binance Chain assets. Our research team can assure you, that number goes up nearly every day!
Binance Chain utilizes a combination of Delegated Proof-of-Stake (DPos) and Practical Byzantine Fault Tolerance (pBFT) to determine who gets to mine each block on Binance Chain. This governance mechanism is an alternative to the energy-intensive Proof-of-Work mechanism used by Bitcoin. Many blockchain developers believe that this Tendermint consensus algorithm removes a lot of the negative points aimed at most blockchain-based methods of determining distributed state. Bitcoin, for example, is rather slow and has difficulty scaling. EOS, as we have noted previously, tends to create self-interested cabals. In pBFT, it is not necessary that all nodes of the network be in consensus to validate a transaction, this considerably reduces the computational intensity.
To conclude, the BEP2 token protocol is giving the old standard ERC20 token protocol a run for its money. A lot of the buzz around blockchain these days has to do with defi — decentralized finance — applications like MakerDAO and Celsius. Backed by a fresh new robust technology stack like Tendermint Core, Cosmos SDK, and the Inter Blockchain Communication (IBC) Protocol, BEP2 tokens just may be a better cryptoasset alternative.
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