WHAT IS BNB ?
Binance Coin (BNB) is a cryptocurrency that can be used to trade and pay fees on the Binance cryptocurrency exchange. The Binance Exchange is the largest cryptocurrency exchange in the world as of January 2018, facilitating more than 1.4 million transactions per second.
Users of Binance Coin receive a discount in transaction fees on the Binance Exchange as an incentive. BNB can also be exchanged or traded for other cryptocurrencies, such as Bitcoin, Ethereum, Litecoin, etc.
Binance Coin was created in July 2017 and initially worked on the ethereum blockchain with the token ERC-20 before it became the native currency of Binance’s own blockchain, the Binance Chain.
BINANCE COIN (BNB) DEVELOPMENT TEAM
Project team
- ChangPeng Zhao holds the position of Founder & CEO of Binance and regularly interacts with the community via Twitter: @cz_binance
- Yi He is holding the position of COO and does not interact much with the community.
Currently, Binance is already the largest exchange in the world, so the team of Binance is extremely large and spread across the globe. However, Binance has the two biggest leaders, ChangPeng Zhao (Nickname: Uncle CZ) and Yi He.
Prior to founding Binance, CZ and Yi He was both active and experienced in the blockchain and cryptocurrency space, prior to that they were colleagues at OKCoin. One of the major exchanges at the time.
Investors
Initially, a total of 14 Angel Investors invested in Binance, including investment funds: AU21 Capital, Dragon Gateway, individual investors such as Chris McCann, Edith Yeung, Phil Chen,… and most of them are the amount raised from the community through the form of ICO.
BINANCE AND REGULATION
After Binance began operations in 2017, it grew into one of the largest players in the crypto space. However, regulatory difficulties notably surfaced against Binance in 2021. Binance faced regulatory action from a number of regions in 2021 including the Cayman Islands, Japan, Malta, Netherlands, Malaysia, the United Kingdom, and Thailand.
The United Kingdom Financial Conduct Authority, for example, ordered Binance to cease all U.K. regulated operations. in June 2021 because it lacked the necessary authorization, registration, or license. Similarly, Malaysian authorities responded by filing a criminal complaint against Binance for operating as an unauthorized virtual asset service provider (VASP) the following month.
Is Binance banned in the United States? Prior to its 2021 headwinds, Binance announced the removal of United States customers from its main exchange in 2019, although Binance opened a platform compatible with U.S. users in the same year, called Binance.US.
In response to increased regulatory scrutiny, Binance has stated that it intends to open additional offices throughout the world and seek licenses in each jurisdiction where it operates. Binance is also beefing up its compliance capabilities and resources, as well as phasing out or restricting a number of high-risk items.
HIGHLIGHTS OF BINANCE COIN
The highlight of Binance is that they have successfully implemented a very large ecosystem including Binance exchange and Binance Smart Chain. These are their two main products and the one that leads the entire crypto market.
Binance Exchange
With Binance exchange, users can: trade Spot, Margin (Leverage), Future (Derivative), IEO (Launchpad), Saving (Staking), P2P (Peer-to-Peer Trading), Loans (Lending), Stock (Stocks), Pay (Payments), Binance NFT (NFT Marketplace),… and many more.
Binance Smart Chain
With Binance Smart Chain (BSC), this decentralized environment allows 3rd parties to develop products on their network. The advantage of BSC is that it is built on Ethereum’s EVM, so it is easy for developers and users to transfer assets to use in BSC.
Compared to DeFi in Ethereum, Binance Smart Chain is not inferior when it has attracted $ 25 billion TVL at the moment with more than 450 projects in many different fields:
- AMM Liquidity: Pancakeswap, Bakeryswap, Ellipsis Finance,…
- Lending: Venus, Alpha Finance, Alpaca Finance,…
- Launchpad: Pancakeswap, Polkastarter, KickPad,…
- Yield Aggregator: Beefy Finance, PancakeBunny, Autofarm,…
- NFT: Bakeryswap, Dego Finance, Treasureland,…
Overview of the Exchange & Liquidity array on the Binance Smart Chain ecosystem.
BINANCE COIN’S HISTORY
Telling the story of Binance Coin’s beginnings would prove difficult without talking about the history of the Binance exchange. Binance Coin was launched in July 2017 with an initial coin offering (ICO). BNB tokens were dispersed among various participants including angel investors and the Binance founding team as part of the ICO.
Here’s a quick rundown of how BNB tokens were distributed at first:
During the ICO, all 100 million BNB tokens available for public sale were sold for 15 cents each. Binance raised a total of $15 million in Bitcoin (BTC) and Ethereum (ETH) from this ICO.
From the $15 million raised, 35% was utilized to upgrade the Binance platform and exchange system, 50% was used for Binance branding, marketing and education of new innovators and the remaining 15% was set aside as a reserve in case of any emergencies or unusual circumstances.
During its ICO and early days, BNB was an ERC-20 token built on the Ethereum blockchain. Binance opened its crypto exchange platform a matter of days after the conclusion of its mid-2017 ICO.
Binance launched its own native blockchain in 2019 calling it Binance Chain (BC). With BC came the blockchain’s own native BNB coin. Users received the new BNB coin in exchange for their BNB ERC-20 tokens via a token swap in 2019.
HOW DOES BINANCE COIN WORK?
BNB is a crypto asset similar to other digital assets on the market in that it rises and falls in value as people use and trade it. People can hold BNB in compatible wallets off crypto exchanges and send the coin directly to others for payments or otherwise.
One might also wonder how to buy Binance Coin? People can buy BNB via a number of avenues such as Binance’s own crypto exchange, for example. As always, though, be sure to research and abide by any applicable jurisdictional laws.
On a more technical level, BNB works in tandem with two specific blockchains — Binance Chain and Binance Smart Chain (BSC). BSC is a separate blockchain built in addition to Binance Chain, running parallel to BC and carrying different features such as smart contract capability.
When constructing BC, Binance tailored the blockchain for optimal performance when it came to trading on-chain, basing Binance DEX, Binance’s decentralized exchange (DEX), on BC. However, BC is limited in terms of the blockchain’s potential for developers to build solutions on it. BEP-2 tokens are assets constructed on the Binance Chain.
Adding further capabilities to its ecosystem, Binance went on to launch Binance Smart Chain in 2020, giving developers more functionality when building their blockchain projects on BSC versus BC. BEP-20 tokens are assets made on Binance Smart Chain.
BSC hosts smart contract functionality, for example, while BC does not. Binance Smart Chain is a separate blockchain from Binance Chain, but both chains operate parallel to each other. BSC is also able to work with the Ethereum Virtual Machine (EVM).
Interacting with either blockchain (BSC or BC) requires payment for network fees in BNB.
BNB Burning
Binance spends some of its revenues each quarter to purchase back and burn Binance Coins, totally eliminating them. Binance has continuously performed quarterly burns since 2017.
Binance will continue burning BNB coins every quarter until it has purchased and destroyed 100 million Binance coins, or half of its original maximum supply. The process decreases Binance Coin’s supply and affects its rarity, which can potentially affect the asset’s value.
Binance also has something called the BNB Pioneer Burn Program, which evaluates certain instances in which BNB holders unrecoverably lost BNB, and repays them, deducting the amount from the next BNB burn.
WHAT IS BINANCE COIN USED FOR?
Binance Coin’s usage comes in line with Binance’s growth. The asset initially started out as a vehicle to raise funds for the Binance exchange. Binance quickly gained significant traction as a cryptocurrency exchange following its 2017 launch. Binance grew from an exchange platform to more of an ecosystem under the Binance brand umbrella.
Over the years, Binance has launched a DEX, two blockchains, a peer-to-peer (P2P) crypto trading option, an option for crypto borrowing and more. BNB has grown in line with Binance’s expansion.
Users can use BNB coins to pay for transactions on the Binance Exchange. The BNB coin has historically served as a method of fee reduction on the Binance crypto exchange, with customers of the exchange paying lower fees by holding BNB and paying platform fees in BNB. Binance will extend the option of receiving a 25% reduction on trading fees when paying using BNB until July 13, 2022, at 11:59:59 pm UTC. In addition, BNB has also become a component of other Binance products.
Additionally, merchants can accept BNB as a form of payment, giving customers more options in terms of payment methods. Furthermore, BNB is used for various things in the entertainment industry, from paying for virtual gifts to purchasing lottery tickets.
Binance Coin may be used to invest in stocks, exchange-traded funds (ETFs), and other assets on a variety of platforms. On some platforms, BNB can be used as collateral for loans. Some apps allow users to use Binance Coin to split expenses and pay friends and relatives.
DETAILED INFORMATION ABOUT BNB COIN
Key Metrics BNB
- Ticker: BNB.
- Blockchain: Binance Chain & Binance Smart Chain.
- Consensus: Tendermint.
- Algorithm: Delegated Byzantine Fault Tolerance (dBFT).
- Token Type: Utility.
- Block Time: 1 second.
- Initial Supply: 200,000,000 BNB.
- Total Supply: 170,532,785 BNB.
- Circulating Supply: 153,432,897 BNB.
BNB Allocation
Distribution of BNB coins.
Initially the total supply of BNB coins was 200,000,000 BNB and distributed as follows:
- ICO: 50% – 100,000,000 BNB.
- Binance Team: 40% – 80,000,000 BNB.
- Angel Investors: 10% – 20,000,000 BNB.
However, Binance has a coin burning mechanism, so the current total supply of BNB is only 170,532,785 BNB and will continue to be burned in the future. Burning coins out of circulation will make BNB more scarce, create buy demand, and help grow stronger.
This has been demonstrated by the outstanding growth of BNB. Since the beginning of 2021, BNB has grown from $40 to a peak of $670 on May 11, 2021 (+1,675%), now BNB is holding at $300 (+750%).
Overview of the Burn process of BNB.
BNB Sale
BNB coin funding rounds
Binance raised capital through ICO form from investors. Over the 3 weeks since July 1, 2017, Binance has raised $15 million from investors at a price increment as planned above.
BNB Release Schedule
Here is how Binance disburses BNB coins for each section:
- ICO: Not locked. Investors receive BNB 5 days after the end of the ICO.
- Angel Investors: Not locked. Get enough BNB coins after the ICO ends.
- Binance Team: The amount of BNB coins held by the Binance team will be paid within 5 years from the end of the ICO. Pay 20% each time (16,000,000 BNB).
BNB Use Case
- Binance Exchange
- Listing Fees: According to the Binance Whitepaper, BNB coin will be used to pay for the listing fees of projects on the Binance exchange. However, the listing amount for each project is not announced by Binance and the proceeds from the listing will be 100% donated to the Binance Charity platform as of October 8, 2018.
- Exchange Fees: BNB coin is used to reduce trading fees (maker & taker) on Binance exchange. Specifically:
BNB helps reduce trading fees on the Binance exchange.
- VIP Discount Fees: In addition, Binance also divides tiers for VIP accounts to enjoy preferential transaction fees in Binance’s trading services, including margin trading.
Use BNB to divide the Tier for VIP accounts on the Binance exchange.
- Binance DEX
- Proposal Fees: Projects that want to be listed on Binance DEX need to send 1000 BNB with a listing proposal. If the project is approved, this 1000 BNB will be returned to the project. Otherwise, the project will lose this amount. This is a condition to avoid spam for Binance DEX.
- Listing Fees: When approved to list on Binance DEX, the project needs to send 1000 BNB listing fees to Binance DEX.
- Binance Launchpad:
Investors need to hold BNB coins to have the opportunity to invest in potential projects through Binance Launchpad. And once there is an investment rate, investors can only use BNB coins to buy tokens of projects.
- Binance Charity:
BNB is used to donate to charity programs through Binance’s Binance Charity platform.
- Payments:
In addition to the Binance ecosystem, BNB coin is also used to pay as a currency at stores and partners that accept BNB payments.
- Binance Smart Chain:
One of the biggest and fastest-growing use cases for BNB is the Binance Smart Chain ecosystem.
Similar to ETH in the Ethereum network, BNB is used as a means of payment for transaction fees as well as the main currency for the entire BSC ecosystem.
BNB has been thoroughly applied in the $25 billion DeFi ecosystem of Binance Smart Chain, including DeFi dApps in various fields such as AMM DEX, Lending, Yield Aggregator,…
This is evident by the fact that BNB is the main asset in the liquidity pair of Pancakeswap, used as collateral in Lending platforms like Venus, and used as a settlement currency in the Binance NFT Marketplace.
POTENTIAL OF BINANCE COIN
BNB has a steady growth in value over time, which leads to the price stability of the coin. Investors will feel more secure about this volatility if any. Besides, BNB is considered the “trump card” of the entire Binance ecosystem. Therefore, the growth of Binance Coin and Binance will be proportional to each other. With maintaining its position in the rankings of the most exchanges in the world, Binance has been growing exponentially. This further clarifies the potential of Binance Coin.
How to earn and own BNB coin ?
Currently, users can buy BNB at many different major exchanges such as:
- CEX: Binance, FTX, Gate, Kucoin, Bithumb,…
- DEX: Pancakeswap, Bakeryswap, Binance DEX,…
However, the highest liquidity is still on the Binance exchange.
ROADMAPS & UPDATES
The crypto market changes very quickly, so to keep up with the changing pace of the market, Binance has cleverly changed its roadmap to always become one of the pioneers and leaders in the crypto market.
- 2017-2019: Binance focused on exchange development, launched many additional features for the exchange and further developed Binance Chain.
- 2020-2021: Focus on expanding the Binance Smart Chain ecosystem, attracting users and developers.
- From 2021 onwards: Binance is aiming to become Cross-chain Financial Infrastructure thereby ushering in the Internet of Value era. In order to achieve such a big goal, Binance will focus on doing a few things below:
- Strengthen infrastructure and critical services.
- Enhanced security for DeFi infrastructures.
- Expansion under the Mass Adoption mechanism.
- Encourage and motivate developers to develop on their own environment.
Binance will focus on several areas such as Algorithmic, Aggregation & Integration, Cross-chain & Multichain, Gamification, NFT, Synthetic,…
- Similar projects
Currently, BNB not only represents an exchange but also a blockchain network. I will categorize some similar projects to make them easier for you to visualize.
- Exchanges: Binance (BNB), Huobi (HT), Okex (OKB), FTX (FTT),…
- Blockchain network: BSC (BNB), Ethereum (ETH), Polkadot (DOT), Solana (SOL),…
