/ Crypto 101

Coin Profile - BNB

BNB is the utility token that underpins the world’s largest cryptocurrency exchange in terms of daily trading volume. As a solid top 5 traded coin, BNB has a wide range of utility within the Binance Exchange and the Layer-1 BNB Chain ecosystem.

Since its launch in 2017, BNB has grown into a coin that is actively traded across hundreds of markets (spot, margin, and futures), having demonstrated tremendous growth since its launch in 2017.

BNB_price_evolution_Quadency_Coin_ProfileBNB Historical Price Evolution

What is BNB?

BNB is a native platform token for BNB Chain (formerly Binance Smart Chain) and the larger Binance Exchange ecosystem. BNB use cases include cheaper (than Ethereum) gas fees, reduced trading fees on Binance, and the ability to participate in token sales issued off BNB Chain’s Layer-1 blockchain.

The BNB token also provides holder benefits such as staking and liquidity provider rewards, payment services, lending, and paying for travel arrangements (see “Utility” in the Tokenomics section).

Project status
Live and expanding rapidly since 2017.

Team:

  • Crypto industry leader Changpeng Zhao, also known as CZ Binance, has built a highly transparent and available presence as Binance CEO and Founder.
  • The current CTO, Rohit Wad, was formerly an Engineering Director at Facebook and Google, and more recently VP Product & Engineering at Microsoft.
  • Additionally, Binance says it has 3000 employees around the world but it was a bit of a challenge to verify some of the lead management.

Making headlines:

  • Amidst a period of high level FUD, Bloomberg reported that the SEC is investigating BNB to determine if the token was an unregistered security.

  • During the 2022 Consensus conference in Austin, Texas, Zhao said the SEC had been asking questions but the exchange had not been subpoenaed and that he was in regular contact with regulatory agencies. He also stated that BNB is “not a security token”.

  • In an analysis of Ethereum’s Layer-1 competitors published by CryptoSlate, out of 5 “Ethereum Killers”, Binance Chain led all (including Ethereum) with the fastest transaction speed at 70 tps.

  • During perhaps the most tumultuous week on record in crypto markets, Binance announced the launch of the MVB (Most Valuable Builder) accelerator program for developers, and that they were hiring an additional 2000 employees.

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Does it have staying power?

The Binance team is known for massively grinding out achievements, partnerships and innovative new products and services.

Competitive?
The Binance platform is a force to be reckoned with and has regularly outdone its competition. As an example, in 2020 at the peak of Covid uncertainty and amid teetering world markets, Binance acquired CoinMarketCap. After the acquisition, they instantly tweaked the exchange rankings criteria and from that day since, Binance Exchange has been listed as number 1 by trading volume.

Hiring?
CZ vowed to hire 2000 more employees just as Coinbase, Gemini, and BlockFi announced major layoffs.

Scalable?
The Binance ecosystem has identified interoperability and scalability as major goals in the platform's future growth. Binance reportedly had 28.6 million users in 2021, so has previously established an ability to scale.

Social traction?
Binance’s global social channels combine for over 14.5 million followers. The Binance Twitter account alone has 9 million followers and Founder Changpeng Zhao also has 6.4 million.

Partnerships & Press
Recent partnerships of note include with celebrity figures Mike Tyson and The Weeknd, as well as sport teams including S.S. Lazio, Club Santos, FC Porto, and BWT Alpine F1 Team.

Hacks & Shutdowns
Binance has experienced several hacks, including a $40 million theft in 2019. In that case, hackers accessed API keys and 2FA codes to get to the funds. Binance recovered quickly, with normal trading, deposits and withdrawals resuming within a week. By January of 2022, Binance had put into place a $1 billion dollar insurance fund called the Safe Assets Fund for Users (SAFU).

$BNB Tokenomics

BNB was launched through an ICO in 2017. 100 million BNB tokens were issued through a public token sale with an initial price of $.15. The ICO raise totaled $15 million:

35% went to upgrading the Binance platform and exchange.
50% was allocated for branding, marketing, and education of new investors.
15% went into an emergency reserve.

Total supply
163,276,974 tokens

Token allocations
Founding team: 40% (80 million BNB)
Angel investors: 10% (20 million BNB)
Public sale: 50% (100 million BNB)

Team Vesting
Initial release: 20% (16MM)
After 1 year: 20% (16MM)
After 2 year: 20% (16MM)
After 3 year: 20% (16MM)
After 4 year: 20% (16MM)

Funding
Binance raised $10 million in 2017 from 3 investors (Black Hole Capital, Funcity Capital, and unknown).

Token utility
As a platform and exchange token, BNB has a wide set of utilities:

  • Trading
  • Lowered transaction fees on Binance Exchange
  • Enables token holders to participate in BNB Chain-derived token sales.
  • Method of payment for Crypto.com credit cards
  • Merchant payment processing
  • Travel booking and entertainment
  • As collateral for loans

Decentralized?
It’s complicated.

  • Through recent rebranding, Binance Smart Chain was renamed BNB Chain and described as a “forever decentralized” blockchain connected to Binance Exchange through the BNB token.
  • BNB Chain blockchain has 41 validators, 21 of which are elected. In comparison, Polygon is capped at 100, Solana has 1000, Avalanche has 1200, and Ethereum has 300k.

Burning?
Yes. For its first few years, Binance instituted a quarterly burn of BNB tokens to ultimately remove 10 million tokens from the supply. In 2021, Binance updated the burning mechanism to add an Auto-Burn Formula, which automatically calculates the number of tokens to be burned.

  • Code Audit? Yes
  • Transparent founders? Yes
  • Bug bounty? Yes.

Next up for BNB

The Binance road map includes achieving the upcoming milestones, slated for 2022 Q2 and Q3:

  • Making BNB Chain more decentralized through B.E.P.-131, which will increase validator sets.
  • Becoming more transparent
  • Multi-chain integration
  • BNB application sidechains
  • Increased transaction speed

Continue your DYOR…

Binance Website
$BNB on Coingecko
BNB Markets Profile
Documentation
Github
Smart Contract
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