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Binance recently released news of zero fee spot trading on its ETH/BUSD trading pairs. This news comes in the midst of a major development surrounding the most up to date news with the Ethereum network. Ethereum is in the process of finalizing ‘the merge’, an update to the blockchain network which has been actively rolled out by the Ethereum Foundation since December 2020.
What’s Been Happening With Ethereum?
Binance introducing zero-fee spot trading on Ethereum/BUSD trading is major news mostly because of these updates happening with the Ethereum network. Ethereum is dubbed the brainchild of co-founder Vitalik Buterin who is said to have been conceptualizing the network from as early as 2013 or possibly earlier. The co-founder, and visible spokesperson for Ethereum Foundation began building the network alongside renowned computer scientist and co-founder Gavin Wood shortly thereafter. The Ethereum network and ETH cryptocurrency launched not much later in 2015.
When Ethereum launched, it initially launched as a Proof-of-Work (PoW) blockchain, which requires a powerful computer to solve difficult equations in a mining process which rewards the machine that figures the problem out fastest with Ether, the network cryptocurrency. The significance of this is what has attracted many individuals to investigate and engage in cryptocurrency trade to date. The Ether rewarded in the mining process can be held or traded for other cryptocurrencies such as BUSD, the stablecoin which is native to the Binance Beacon Chain, or even fiat currency such as USD on exchanges like Binance.
Why Is Zero Fee Spot Trading Big News?
Since ‘The Merge’ began in 2020, the network has been in the process of transitioning from its original PoW consensus model to Proof-of-Stake (PoS). This will result in validators being rewarded with Ether in the new model, which works in large part, by staking. Binance offering zero fee trading on ETH/BUSD could then be used by individuals who wish to obtain any amount of Ether from now until the announced end of the special rate reduction – September 26. Every user has the opportunity to buy and sell ETH with minimum barriers to entry.
The Ethereum merge has been said by core Ethereum Foundation team members to be going forth into the live transition on September 19. Up until then, and even after due to the staking model on the upgraded blockchain network, individuals are able to stake Ethereum for rewards through various cryptocurrency platforms. The Ethereum cryptocurrency is required to stake, making the trading pair with BUSD a potentially attractive option for individuals looking to obtain any amount of Ethereum now and through ‘The Merge’.
Furthermore, the Ethereum blockchain is the original home to many decentralized applications (DApps), being critical in paving the way for DeFi, NFTs, and the use of smart contracts in crypto.
What Exactly Is ‘The Merge’?
‘The Merge’, as it has been affectionately called by the blockchain and related communities, is a move of the Ethereum network from the original PoW consensus model just explained, to a PoS algorithm. The main reason spoken on is that the PoS model is considered to be a significantly more energy efficient model than the original PoW consensus mechanism.
The PoS consensus model works by way of validators on the blockchain network who agree on transactions which are presented to the network by senders in the peer-to-peer network scheme. Senders have their transactions validated in order to be approved and delivered to the receiver, as opposed to being done by the scheme used in the computation-based PoW mechanism, which uses a tremendous amount of power across the network for only one device to be awarded in the work-intensive mining process.
Zero Fee Until September 26
This news of the ETH/BUSD trading pair being reduced to zero fee until the 26th puts it a full week after the expected date of the network transition. The Binance stablecoin ($BUSD) has long been one of the top traded stablecoins in the cryptocurrency industry. Since the rate reduction to zero is going on for at least a week after the date of ‘The Merge’ it would make sense that the traffic to ETH/BUSD would only consistently grow.
There are no hidden costs associated with this promotion meant to offset the costs of this fee waiver. Binance has simply removed its standard 0.1% fee for all ETH/BUSD spot trades. Full details of the promotion can be viewed on Binance.
