Did you notice how drastically Binance Coin’s (BNB) Price surged a few days ago while the rest of the altcoins were bleeding badly? It was hard to miss such a dramatic increase but the question is whether it was a manipulative move or there was a solid reason behind it.
On Oct 12, 2021, Changpeng Zhao, Binance’s CEO) announced that Binance has decided to double down on its position on the Binance Smart Chain to boost the adoption of digital assets globally. The company has launched $1 billion funds to push the adoption of Binance Smart Chain and the entire blockchain industry.
It was such a massive move that investors pulled out their investments from other crypto coins and started investing in Binance Coin aggressively. Similarly, the technical analysts started following the herd based on their technical indicators.
So, it was the major reason due to which we observed a huge pump in Binance coin’s price. Some of you may be thinking about whether this news was actually worth it or was it just hype created by market manipulators.
Today we’ll be answering this question in detail. So, let’s get started.
What is Binance SmartChain?
Many of those in the cryptocurrency space are still trying to figure out the exact reasons for the spike in the price of Binance Coin. So, it’s important to shed some light on what Binance SmartChain is.
Binance Smart chain isn’t the only blockchain launched by the company but the company had already a blockchain called Binance Chain that was running well. However, the company was failing to keep up with the other bigger blockchains.
The main purpose of the Binance Smart chain was to reduce the transaction costs because developers and investors weren’t comfortable with the original Binance Chain. Moreover, this new blockchain has enabled developers to launch Dapps (decentralized apps) and other Defi Products.
Binance smart chain works in parallel with the Binance chain but it’s a standalone blockchain which means it can continue running its operations even if the Binance chain stops working for some reason.
The beauty of the Binance Smart Chain is that EVM (Ethereum Virtual Machine) is Compatible. So, the decentralized apps or Defi products built on Ethereum’s smart contract can be migrated to the Binance Smart Chain without any disruption.
It’s one of the major reasons why BSC became so popular right after its launch because Ethereum’s smart contract is a bit congested and its fees are also higher than BSC.
How the Company is planning to use this $1 Billion Funding?
Binance had dedicated around $100m to BSC almost a year ago to support decentralized finance (Defi) projects. After receiving an amazing response from the consumers, the company has finally decided to inject another $1 Billion for further growth. Here’s an overview of how the company is planning to use this $1 billion in different categories.
Incubation Program for Industrial Development
The company is planning to use a major part of this investment for industrial development. They’ve decided to use around $500 million for this program. The program is mainly focused on reducing the gap between crypto blockchain and current technical financial sectors.
Obviously, they can’t do it alone and they need the support of several industry-leading organizations to achieve success. Therefore, the company is collaborating with leading bodies of this industry to ensure the growth of decentralized computing, artificial intelligence, virtual reality, gaming, and blockchain-based financial services.
The company has planned to spread the basic vision of financial inclusion and healthy sovereignty with the help of global blockchain researchers, crypto advisors, fintech companies, and influencers.
It may take some time to achieve this goal but BSC has taken a great step towards a better future. And they deserve some appreciation and recognition for such a great vision.
The company has dedicated around $300 million to the builder program. This program will provide essential support to technological startups facing problems with launching their projects in the crypto world.
The primary purpose of this program is to incubate at least 100 innovative decentralized apps on Binance Smart Chain (BSC). The company is planning to use around $200 for this particular setup.
The remaining $100 million will be used to conduct developer conferences, joint bug bounty programs, and hackathons locally and globally. Furthermore, this funding will also be used to support existing development programs.
We can’t expect continuous growth in the blockchain industry unless we have some brilliant minds on board. The company has designated around $100 million for talent development. This funding will be used to provide academic scholarships to institutions while educating new crypto investors about how this industry works and how they can take advantage of it.
Under this program, the company will also launch a mentorship program for developer communities. Most importantly, these funds will be used to strengthen research & development around Cryptography. The company is expecting to extract fruitful results from this particular program.
Liquidity Incentive Program
There is a little known reason some investors aren’t interested in investing more in the digital asset market. Yes, trust is a major concern but there is another reason. They don’t get the perks they usually get in traditional financial markets. This liquidity incentive program is going to attract more professional traders and institutes towards the digital asset market.
This liquidity incentive program is going to streamline yield farming in vaults, borrowing and lending in money markets, arbitrage gains, and more. The company is going to use $100 million for this program as well.
What is the Invesment Outlook for Binance Coin Now?
We aren’t financial advisors and we are here to educate our readers about financial markets, so we don’t make recommendations, let alone suggest investing in Binance coin solely based on this news. Ethereum Smart Chain is still leading the industry. And Binance may still need more upgrades to win the race.
However, this $1 billion investment is an amazing initiative. And the expectations are that the Binance coin will become stronger if these plans are implemented properly.
A sudden price hike in Binance Coin’s price surprised many crypto investors. We believe this $1B investment news was the trigger behind this run and it appears to be a genuine gain so far. It is exciting news that the company is planning to use this $1 Billion fund for the Binance Smart chain and advancing other blockchain technology in general.