Binance Launches Public Testnet for Binance DEX, BNB Surges Over 12%

On Wednesday (February 20th), Binance, probably the world's largest cryptocurrency exchange by adjusted trading volume, released a public testnet for the "Binance Chain" blockchain, which means that you can now test the "Binance Chain Explorer" tool and Binance's new decentralized exchange "Binance DEX" (which is powered by "Binance Chain").

Binance Chain

Binance says that ever since its platform was created, there was a vision of one day creating a native blockchain for it. It also wants you to know that this was "a community-driven development project with developers from all over the world" (with, of course, Binance.com as the largest contributor). The idea is to have a blockchain that "will serve as an alternative marketplace for issuing, using, and exchanging digital assets in a decentralized manner." 

Although the Binance Chain is not ready to go live in production, i.e. the Binance Chain mainnet is not ready yet for launch, the public testnet was launched today at 08:00 UTC. 

The first application to be powered by Binance Chain is Binance DEX, a new decentralized exchange (DEX) that "aims to carry over the best features of the current Binance exchange in a decentralized setting, while also offering the benefits and security of a DEX."

Binance DEX

Why should anyone want to use a DEX? According to Binance, these are the main advantages of using a DEX over a centralized exchange:

With a DEX, a person fully holds his crypto funds and directly plug into the network to trade without needing to provide personal information. Unlike centralized exchanges that may be subject to downtimes, a DEX is kept running by nodes distributed around the world and codes that execute functions.

However, the existing DEX options (which nmostly run on Ethereum) have several drawbacks that prevent them from achieving mass adoption:

"The user experience on existing DEX platforms is less intuitive and user-friendly compared to centralized exchanges. In addition, DEX platforms face speed and liquidity issues, which leave them lagging behind their centralized peers."

Therefore, Binance decided to create a blockchain (Binance Chain) that would be secure and fast enough to allow the creation of an intuitive, easy-ti-use DEX that could handle the same "handle the same amount of transactions that the current Binance platform handles," which in its current beta form, according to Binance CEO Changpeng Zhao ("CZ" for short) is around ""a couple of thousand" transactions per second.

How to Try the Binance Chain Testnet

To create your own testnet address, you can use either the Binance Chain Web Wallet or Binance's official mobile wallet (for iOS and Android) Trust Wallet.

You can try Binance DEX at https://testnet.binance.org/. The first step is to create a test wallet. But before you can start doing some test trading on Binance DEX, youj need some funds in your test wallet. You can get 200 test BNB via the testnet faucet, which requires having a Binance.com account and at least a 1 BNB balance (to prevent abuse of the testnet); a few minutes after specifying your testnet address, you will receive 200 test BNB from Binance. 

As for playing with the Binance Chain testnet explorer tool, it is available at https://testnet-explorer.binance.org

Binance has created several helpful tutorials for using the Binance Chain Explorer and Binance DEX. The links for these tutorials are given in the following tweet:

Binance has also created a comprehensive Frequently Asked Questions (FAQ) guide for Binance Chain and Binance DEX, which is available at https://binance-chain.github.io/faq.html

Binance Coin (BNB) Price Action

Due partly to the anticipation of today's launch of the Binance Chain testnet, BNB has had a terrific rally in the past two weeks. As you can see from the two-week chart below (provided by CryptoCompare), the BNB price has gone up from $7.97 at 08:00 UTC on February 6th to $11.01 at 08:00 UTC on February 20th, i.e. an increase of 38.14%:

BNB_two week_20 feb 2019.png

At press time (08:30 UTC), BNB is trading at $10.90, up 12.37% in the past 24-hour period.

Featured Image Courtesy of Binance

Sub-accounts in Crypto: What They Are and How They Work

 

Julia Gerstein, a crypto trading bots enthusiast and a content writer at TradeSanta. My final goal is to help readers find what they need, understand what they find, and use what they understand appropriately.


Speaking generally, a sub-account is a segregated smaller account that is tied to a larger primary account. Sub-accounts may serve different functions depending on the objectives of their owners. The term can refer to multiple email addresses linked to one user or secondary accounts tied to a primary account with a financial institution or a bank.

For this article, we will be looking at sub-accounts as they exist in the crypto industry, and specifically on trading platforms.

Built-in Sub-Accounts

On trading platforms, the sub-accounts feature allows users to create a set of subsidiary accounts with different trading strategies, funds and end customers. On some platforms, general accounts already come with built-in sub-accounts.

For example, exchange platform Crypto Facilities provides each user with cash and margin accounts when they sign up. While deposits and withdrawals are completed with the cash account, trading an instrument requires users to make an internal transfer from a cash account to their margin account that corresponds to the instrument in question.

Each instrument has its own margin account. This grants users more control over their funds and allows them to manage risks for each instrument separately from their main balance.

Optional Sub-Accounts

Other cryptocurrency exchanges, such as Gemini and Binance, have launched sub-accounts as an optional feature for institutional investors.

As an optional feature, sub-accounts can serve to introduce additional security measures and different access levels between the main account and its subsidiaries. Binance has underlined the differences between a master account and its subsidiaries, providing the former with the exclusive ability to view all data and balances, transfer funds between accounts, and have full managerial control and access to a range of asset audit tools.

Here master accounts have sole control over the movement of assets between sub-accounts, and can grant each of them different access levels and permissions. This ensures that the main account has the power to direct and monitor the actions of all its associated accounts, while each sub-account can perform its function independently from other sub-accounts.

Not Only for Institutional Investors

While institutional investors have been able to create sub-accounts for a while, this feature is still being introduced by more and more major exchanges.

Now even individual investors can create subsidiary accounts to try and assess the performance of distinct trading strategies. For example, HitBTC recently introduced its own sub-accounts feature that is now available per user’s request.

At HitBTC, sub-accounts enable users to create separate subsidiary accounts with which they can utilize various trading styles and strategies with operational autonomy. While each sub-account is separate, all of them are still tied to a master account and contribute to the cumulative volume of all accounts connected to the master.

Because trading volume is measured cumulatively, the use of the subaccounts feature can open up additional benefits for traders such as lower commissions due to progressive fee tiers that reward users for contributing to the liquidity on the trading platform.

Therefore, users can perform a variety of different trading activities unconnected to each other, and all the activities will still weigh in the financial favor of the parties involved. Master accounts also have access to important data such as the performance of each sub-account and total trading fees of all linked accounts combined. While the feature is designed with institutional and corporate clients in mind, on HitBTC any user can create sub-accounts upon request.

The adoption of this feature by more and more trading platforms will be beneficial for both institutional and individual traders. Some users can utilize it to execute different trading strategies or try various algorithms with a clear picture of their effectiveness, others to manage their team and analyze the performance of each account securely and conveniently.

Featured image by Tyler Franta on Unsplash