Uniswap and its token UNI could threaten Binance’s position as the largest cryptocurrency exchange in the world. Uniswap is a decentralized exchange that allows for direct peer-to-peer cryptocurrency transactions without an intermediary, and it’s becoming more popular due to the rise of decentralized finance. UNI holders control the protocol and decide on changes to it, while Binance’s BNB coin is used to get a discount on trading fees. However, Binance still has an advantage with over 1000 different markets and a trading volume of over $14 trillion. UNI’s uniqueness lies in its automated market making system that solves high spreads for thinly traded assets.
Binance Coin vs. Uniswap: The Battle for DeFi Supremacy
Anyone in the crypto community, from novice traders to veterans, are familiar with Binance, the largest cryptocurrency exchange in the world. But a new competitor, Uniswap, is quickly rising in popularity with its decentralized exchange system and its own token, UNI. In this article, we’ll delve into the rise of decentralized exchanges and the battle between Binance Coin and UNI to become the top token in the DeFi space.
What is a Decentralized Exchange?
A decentralized exchange, or DEX, is a peer-to-peer cryptocurrency exchange that eliminates the need for intermediaries. Unlike centralized exchanges, which take a percentage of trading fees and force all transactions to take place through the exchange, a DEX enables traders to swap coins directly between each other, and thus has no order book. A DEX also allows coin holders to maintain custody of their assets throughout the entire transaction.
Binance Coin and Binance Exchange
Founded by Changpeng Zhao or CZ for short, Binance is the world’s largest crypto exchange by volume. Binance Coin or BNB, its own token, was offered at a 50% discount on trading fees for traders, encouraging its use and increasing its popularity. With over 1000 different markets and a 24-hour trading volume of over $14 trillion, Binance remains the king of cryptocurrency exchanges.
Uniswap and UNI Token
Uniswap, on the other hand, is a decentralized exchange built on the Ethereum blockchain that facilitates the exchange of ERC-20 tokens. It operates with an automated market making system (AMM) that pulls together the two digital assets being traded rather than using an order book. Uniswap has quickly gained liquidity and a large trading volume, overtaking even some major centralized exchanges.
In September 2020, UNI was launched as Uniswap’s own token, distributed to past users of the platform. Unlike BNB, which is used to get a discount on trading fees, UNI is a governance token. UNI holders control the protocol and decide on any changes to it.
Price Prediction and Conclusion
UNI has skyrocketed since its launch, reaching an all-time high of $12.89 in January 2021. BNB, on the other hand, continues to climb and is now worth over $40 with a market cap of $6.52 billion. While DEXs like Uniswap are on the rise, Binance remains the dominant force in the crypto space.
It’s hard to predict which token will come out on top in the end, but the rise of decentralized exchanges and the popularity of DeFi suggest that UNI could eventually overtake BNB as the top token. Only time will tell.