Anyone in the crypto space, both novice and veteran, is familiar with Binance.
Binance is the largest cryptocurrency exchange by volume in the world.
It's giant.
They have an unbelievable number of coins available to trade
and they even have their own token, Binance Coin or BNB.
However, there is a competitor lurking in the midst that could possibly unseat Binance
as the top exchange,
Uniswap
and their token UNI.
What is Uniswap and UNI?
And why could it become more popular than Binance and BNB?
Well, I'm going to tell you everything you need to know in this video
and give you some price predictions.
Let's get it!
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In today's video,
we will talk about Binance Coin versus Uniswap
and the rise of decentralized exchanges.
And at the end of this video,
I'm going to be giving you guys a price prediction for both Uniswap's token and Binance Coin
that you definitely want to see,
so make sure to watch until the very end
or you'll miss what you came here for.
Binance is the top cryptocurrency exchange by volume in the world as of right now.
With over 1000 different markets, over 300 coins and a 24-hour trading volume of over $14 trillion,
it's easy to see why Binance is king.
Binance was founded by Changpeng Zhao or CZ for short.
I had him on the channel before.
CZ raised $15 million in funding through the initial coin offering of Binance Coin or BNB.
And in July of 2017, Binance was launched.
The BNB ICO was a massive success
and Binance went on to become the world's largest crypto exchange by trading volume
in less than 8 months.
However, in a very smart move, CZ decided to maintain the crypto markets' interest in BNB
so that the value will continue to rise.
To do this, he offered a 50% discount on trading fees for traders using BNB for their exchanges.
This made BNB one of the top traded coins
and the price of BNB continue to grow exponentially.
From its original price of 10¢, BNB has steadily climbed to keep reaching all-time highs.
As of this month,
BNB is worth over $40 and is the No. 10 crypto in the world with a market cap of $6.52 billion.
However, there's a new sheriff in crypto town
and his name is DeFi.
Decentralized finance is all the rage
and the DeFi market is now the hottest market in crypto.
More and more people are becoming interested in decentralized finance
and decentralized exchanges or DEXs are one of the key facets of DeFi.
So what is a decentralized exchange?
Well, a DEX is a type of cryptocurrency exchange that allows for direct peer-to-peer cryptocurrency transactions
without the need for an intermediary.
There's no need for an order book
and unlike a centralized exchange,
which forces all transactions to take place during through the exchange
and take a percentage of the trading fees,
a decentralized exchange instead allows traders to exchange or swap coins directly between each other.
Just always remember,
a DEX is much better than a CEX.
One of the main advantages of a DEX is that it is noncustodial,
meaning that coin holders maintain custody of their digital assets throughout the entire transaction.
Centralized exchanges force users to use the exchange's hot wallet in order to trade.
This means that while the coins are in the exchange's hot wallet,
the exchange controls coins, not the user.
That not only leaves the coins vulnerable to hacking,
a common problem in crypto,
Mt. Gox,
but also means that the exchange can shut down trading and withdrawals at any time,
preventing the users from accessing their coins.
We saw this with KuCoin not too long ago.
It wasn't their fault, but they had to do it.
As a result, it's no surprise in the era of DeFi we're in now that DEXs are steadily on the rise
and perhaps the most successful DEX to throw their hat in the ring is Uniswap.
Uniswap is a decentralized exchange that was built on the Ethereum blockchain
that facilitates the exchange of ERC-20 tokens.
Uniswap utilizes an automated market making system or AMM
rather than a traditional order book.
Instead of traditional matching individual buy and sell orders used by centralized exchanges,
use instead pull together the two digital assets that are being traded
and the price for the trade is determined based on the ratio between the two assets.
And also don't forget to check out bitswapdex.io,
an aggregator that pulls together 14 of these exchanges.
Uniswap originally though began as an idea proposed by Vitalik Buterin in 2016
for a DEX that would employ an on-chain automated market maker with certain unique characteristics.
Inspired by this idea, the following year, Hayden Adams, a former mechanical engineer at Siemens,
began working on turning Vitalik's idea into a working product.
The exchange was able to raise millions of dollars from venture capitalists
including Andreessen Horowitz,
Paradigm Venture Capital,
Union Square Ventures LLC
and Parafi,
as well as $100,000 from the Ethereum Foundation.
In November 2018, Uniswap officially launched.
Uniswap was an instant success
and it quickly gained liquidity and a large trading volume.
Uniswap has become the top DEX in the world
with almost 1200 different markets
and a 24-hour trading volume of over $936 billion.
Uniswap surpassed even the trading volume of some major centralized exchanges
such as Coinbase Pro
for a short period of time,
which is incredibly impressive for a newer exchange,
let alone a DEX.
I never saw this coming this quickly.
This is why Uniswap though is taking the throne as a top DEX in the world.
One of the unique advantages of Uniswap is that it solves the problem that exists of high spreads for illiquid assets on centralized order book exchanges.
There's plenty of them out there.
In general, there's not much incentive for professional market makers
to provide liquidity on assets that are thinly traded.
With Uniswap however, anyone can become a market maker providing liquidity
by simply depositing assets into a liquidity pool
and earning fees based on the amount of trading.
The only downsides to Uniswap are that there is substantial slippage
and that sometimes transactions fail.
This means that even if the swap doesn't go through,
you will lose the gas price for any swap attempt
which can be high during times of heavy usage.
September 2020, "UNI" or UNI launched its own token
UNI
and distributed the token to past users of the platform.
I actually got five of those airdrops.
But because Uniswap allows traders to swap coins directly with each other,
it doesn't have any fees.
So unlike Binance's BNB coin which is used to get a discount on trading fees,
UNI is instead a governance token.
This means that UNI holders control the protocol
and decide on any changes to the protocol itself.
From its initial price of $3.09 in September 2020,
UNI has continued to increase in value,
reaching an all-time high of $12.89 just recently on January 24.
There are a number of notable differences between BNB and UNI.
For starters, UNI is an ERC-20 token on the Ethereum blockchain.
Now, BNB was originally issued as an ERC-20 token.
However, with the launch of the Binance Chain mainnet in April of 2019,
the ERC-20 BNB coins were swapped with BEP2 BNB at a 1:1 ratio
and are now hosted on the Binance Chain instead of Ethereum.
"BEP2" or BEP2 is the Binance Chain.
But this means that the value and success of UNI is more directly tied to the value and success of Ethereum,
whereas the value and success of BNB is only influenced by the success Binance.
Another notable difference is the token supply.
BNB has a token supply capped to 200 million coins with 100 million BNB offered in the ICO.
UNI, on the other hand, has a total supply cap at 1 billion UNI.
The entire supply of 1 billion UNI were minted at genesis
and will become accessible over the course of 4 years.
The initial 4-year allocation of UNI is as follows:
60% go to Uniswap community members,
about 21% go to team members and future employees with 4-year vesting,
18% go to investors with 4-year vesting,
and less than a percent go to the advisors with 4-year vesting.
A perpetual inflation rate of 2% per year will start after 4 years,
ensuring continued participation and contribution to Uniswap
at the expense of passive UNI holders.
This means that actively contributing will continue to see consistent gains on their UNI
after the 4-year release schedule,
which only further incentivizes UNI holders to hodl their UNI for the long term.
Now, for these reasons,
I can only see UNI going up in the short term and long term.
Binance is still the top exchange in the world,
but with recent crackdowns on which geographic regions can even use Binance,
along with the accusations of money laundering and the leaked Tai Chi document
outlining possible plans to illegally sidestep regulation and siphon profits to Binance,
Binance may have some trouble in its future.
But I am a big supporter of Binance and I do use it frequently,
but this coupled with the increase in popularity of decentralized exchanges make me think
Uniswap is only going to continue to grow
and UNI will just keep going up in value.
In a very short amount of time, UNI has already rocketed to the No. 15 spot for all crypto
with a market cap of $3.3 billion.
I only think that momentum will continue
with UNI likely overtaking BNB and becoming a top 10 coin in the very near future.
So the smart money, like myself, is betting on Uniswap
and UNI in the short, medium and long term.
So, as far as price predictions for these two coins,
I believe that both of them have decent potential,
but UNI has the higher ceiling
if DeFi in fact returns for round 2 like most of us think it will.
For BNB, I can see essentially a 10X from here and the price rising to $400 per coin.
But I think Uniswap's UNI token can move closer to 15X from here, reaching a high of $225 per coin.
Make sure you drop your price predictions for both down below.
Also, do you think Binance can maintain its position as the biggest exchange
and BNB can maintain its spot at No. 10?
Or will the rise of DEXs unseat Binance?
Pushing Uniswap to become the biggest exchange in the world
and drive the price of UNI to the moon?
Drop your comments down below.
That's all I got.
Be blessed.
BitBoy out.