Binance Coin (BNB) is one of the best examples of an initial coin offering (ICO) that blew up into something big. Most of these are scams and almost all of these aren’t worth your time and energy to even do the baseline research, but occasionally a project comes along that’s special. Binance Coin was one of those.
BNB was originally an ERC-20 coin, which meant it was originally minted on Ethereum, and developed beyond that into the native coin of the Binance blockchain. It was launched in 2017 and maintains a strict cap at 200 million BNB tokens. Originally, it offered 10%, or 20 million BNB tokens, to angel investors, 40% or 80 million to the founding team, and the remaining went to participants in the ICO.
Now it’s the 4th largest cryptocurrency in the world with a market cap of approximately $64.4 billion.
Tokenomics
Almost half the funds raised in the ICO were intended to go to Binance branding and marketing, while one third were used to build the Binance platform and perform upgrades to the ecosystem.
Binance is a burn-coin and there is no consensus mechanism. That’s right. This coin isn’t mined and all of the existing coins are out there in circulation.
Originally the ICO spat out 100 million coins, but the total supply is lower. Every quarter Binance throws out one fifth of their profits to repurchase and destroy Binance coins held in storage. Binance does this regularly: the latest burn was April 15, 2021, where Binance burned 1,099,888 BNB or roughly $595,314,380 USD in tokens. It’s Binance’s 15th quarterly burn and largest ever in terms of cash amount. The total supply decreased from 170,532,825 to 169,432,937.
What can you use it for?
Binance’s original purpose was as a utility for token for discounted trading fees when it was created. Like any good promotion, though, they really want you to know that the promotion won’t be there in the next few years.
Since its inception, its uses have compounded and expanded to numerous applications on a number of platforms, including Binance.com, Binance DEX and Binance Chain. It’s also accepted for payment at Cryptoc.om, Monetha and HTC, as well as to book travel specifics at sites like TravelbyBit, Trip.io, and Travala.com. It also now includes online services like BitTorrent, Canva and Storm, and of course, for financial uses like to take out a loans and investments on the ETHLend and Moeda DeFi platforms respectively.
Here’s a wider, nonspecific list on what you else can use the BNB coin for:
- Make credit card payments
- Pay for travel arrangements (on select websites)
- Buy virtual gifts
- Process payments
- Make investments
- Make loans and transfers
- Donate to charity
Fees and Expenses
If you’re not going to do business on the Binance exchange there’s zero reason to own BNB. It was created for internal exchange, as a kind of a loyalty coin, and there are no fees associated with the network. If you buy BNB or make any trade on the exchange, you’ll pay 0.1% of the trading amount in fees. If you pay with BNB, you’ll get a 50% discount.
For example, if you bought $10,000 word of BNB on Binance using any other coin, it’d cost you an extra $100 to make the deal. But if you use BNB, your fees will be cut in half, which means you’ll only owe $50. This doesn’t just apply to fiat to crypto, but crypto to crypto trades as well.
Storage
You can store BNB in either hard or soft wallets. The official wallet for BNB is the TrustWallet, but it’ll be just as safe in Enjin Wallet, Ledger Wallet, Trezor Wallet, Jaxx, CoolWallet S, Metal Vault, BRD, Gifto, Request Wallet, Ethos Universal, WinQ, Atomic Wallet, Clay, Coinomi, and Blox.io Wallet.
Is it a Good Investment?
Again this depends on whether or not you’re planning on doing business on Binance. If you are, then definitely. If you’re thinking of BNB as a speculative bet then there are definitely better coins with better price trajectories to consider. This one’s trading a little high at $368.20 at the time of writing, and down from all time high of $686.31 ten months ago.
—Joseph Morton
