Cardano (ADA) vs Binance Coin (BNB): What Is the Difference?

Cardano and Binance Coin are two of the top ten cryptocurrencies by market capitalization. Cardano is the tenth largest while Binance Coin is the fourth largest.

As their names are different, so are they different in their design and use. They however share certain similarities since they are both proof-of-stake (PoS) crypto projects. If you’re looking for the difference between these two projects, you have come to the right place.

In this guide, we focus on the differences between these two projects. We will also highlight the major strengths and weaknesses of each project to help you decide which one is more suitable for you to use for development or investment.

Cardano is a PoS project that focuses on smart contracts and decentralized applications. It enables developers to build decentralized applications and deploy them using smart contracts. The network is famous for its scientific approach to upgrades.

Any proposed upgrades on Cardano must be subjected to a rigorous academic screening and a peer-review to ensure that only verified upgrades are implemented. This way, the network can grow in a sustainable manner.

Cardano uses a special kind of PoS consensus known as Ouroboros. This consensus mechanism makes the network unique in its scalability and other attributes.

The native token for the network is ADA. This is a utility token used for paying transactions as well as staking. Since Cardano is a PoS network, it depends on validators who stake their ADA to secure the network. The validators are also rewarded using the same ADA tokens.

ADA also serves as a governance token for the network. Holders can vote on proposed developments on the network. This makes the token a vital requirement for participating on the Cardano network.

All ADA tokens are pre-mined, and there are a maximum of 45 billion tokens. However, only 35 billion are currently in circulation. The Cardano team decides how more tokens are released into circulation as the need arises.

Apart from its use on the Cardano network, ADA also serves as an investment asset that many investors hold.

What Is Binance Coin (BNB)?

Unlike Cardano which is a cryptocurrency network, Binance Coin is a token used to power the Binance ecosystem. This ecosystem includes blockchains and the famous Binance crypto exchange which is the biggest in the world.

BNB is used to pay for transaction fees on Binance Smart Chain (BSC), and also for staking. As a PoS network, BSC requires validators to stake their BNB to secure the network. They are then rewarded with more BNB as an incentive.

BNB also serves as a governance token on the BNB Chain. Holders of the token can vote on proposals for the development of the network to make it better. To hold a stake in the BNB Chain therefore, you need to hold BNB, among other conditions.

There are a total of 147 million BNB tokens, all of which are pre-mined and all of which are in circulation. There’s a burn mechanism that keeps the token’s supply at an acceptable level, thus keeping the value high.

Binance burns a portion of the transaction fees paid using BNB as part of this strategy. There are also regular BNB burning events held annually that help to regulate the supply as well. Because of its capped supply, BNB is a deflationary asset, which makes its value likely to keep rising are demand for it continues to grow.

Which Is Better?

If you’re a developer looking for the best platform to develop and deploy decentralized applications, either of Cardano and BNB Chain or BSC can serve that purpose well. They are all scalable, fast, anc cheap crypto networks for developers.

However if the goal is to invest, BNB is a much more popular token in this aspect. It has a much smaller supply which makes it more likely to grow, and also is currently one of the hottest crypto assets to invest in.

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