WTF is Binance Coin
Three cryptocurrencies in the world are currently standing the test of time: Bitcoin, Ethereum, and BNB. BNB is now the third-largest cryptocurrency in terms of market capitalization. That's why there is so much hype about it in the crypto market. Its Binance coin first came into the market in 2017 during an initial coin offering. The coin immediately shot to fame because of its tactical token distribution process. It offered 20 million or 10% tokens to angel investors, 80 million or 40% BNB tokens to its founding team, and the remaining 100 million or 50% to other ICO participants.
BNB had used nearly half of its funds for Binance branding and marketing. Additionally, it used one-third of its funds to build the Binance platform and provide upgrades to the Binance ecosystem. The systematic planning and execution of marketing strategies made BNB the third-largest cryptocurrency. But how does BNB work, and why is it beneficial for traders? Let's find out.
What is the Binance Coin?
Binance Coin, as the name suggests, is a cryptocurrency issued by the Binance exchange. It goes by the BNB symbol. The Ethereum blockchain initially supported the coin with ERC-20 standards. But now, it's the native coin of the Binance exchange. It has a maximum of 200 million tokens. This platform now has the largest crypto exchange in the world as it supports over 1.4 million transactions per second.
The BNB coin boosts the operation of the exchange and also its ecosystem. This is one of the fewer coins in the crypto market that supports multiple utilities, such as exchanging fees, trading fees, listing fees, and various other fees that you may need to pay on the Binance exchange. What started as a utility token for discounting trading fees in 2017 has now expanded its applications to various payment facilities like financial services, online shopping, travel bookings, donation to charity, making loans and transfers, process payments, buy virtual gifts, make credit card payments, and entertainment services.
One of the advantages of using BNB is it allows you to convert dust into BNB tokens. Dust means any token or coin that is so negligible that you can ignore their values. They are the tiny fractions left from bigger trades. The Binance Coin ecosystem allows you to convert your dust tokens and coins into BNB.
What makes Binance Coin exciting?
Binance started as a utility token in 2017. It was primarily used for discounted trading fees. But it became so popular that the developers started implementing it on various applications on different platforms. BNB's widespread flexibility makes it one of the best coins in the crypto industry. You can use it to pay for transaction fees on popular crypto exchanges, such as Binance Chain, Binance DEX, and Binance.com.
In fact, you can also use it for payments on HTC, Monetha, and Crypto.com. This shows the coin's versatility. No other coin has such a huge coverage in terms of payment facilities and reducing trading fees. Here are a few more ways to use BNB coins:
• Financial purposes – By taking out a loan with ETHLend or make an investment at Moeda.
• Online payments – By paying for premium subscriptions for online services like Canva, Storm, and BitTorrent.
• Entertainment purposes – By paying for online lotteries, card packs, in-game purchases, and virtual gifts.
• Travel accommodations – By paying for flight and hotel bookings on Travala.com, Trip.io, and TravelbyBit.
You can even use BNB coins for investing in various ICOs listed on Binance's Launchpad program. The Binance exchange regularly updates this ICO list to ensure that you can invest in different platforms from the Binance exchange. It aims to set up a marketplace for trading various new and established virtual tokens.
Binance Coin BNB got massive support from different partnerships, allowing it to become popular within a short period. Its support includes a partnership with Uplive, one of Asia's best high-end live video streaming platforms. Uplive sells virtual gifts against BNB tokens to nearly 20 million users. The coin also gets support from the VISA debit card of Monaco. It is the pioneer when it comes to making payments on a crypto platform.
Another advantage of using Binance Coin BNB is it uses whitepaper. According to its whitepaper terms and conditions, it has to use 20% of its annual profits to buy back and burn BNB coins. It must destroy the buyback coins completely before allotting fresh coins. So far, Binance has successfully completed its quarterly burns since 2017. In fact, it will continue to burn its buyback coins quarterly until it completely destroys 100 million coins. That's like 50% of its total coin supply. This practice ensures that there is a finite supply of Binance coins, thus making it scarce over time. It would lead to a significantly higher price of each coin after a few years when there would be more demand but less supply of coins.
The Binance coin token and governance model
One of the reasons why experts believe that Binance is the best exchange in the crypto industry is it has a built-in governance model. This governance model allows BNB holders to submit their proposals to add trading pairs. But there are a few rules that you need to follow to submit proposals.
• First of all, you will get voting rights only if you deposit something. Remember, the Binance governance model has a fixed amount when it comes to deposits. You need to either match that figure or deposit more to become eligible for voting. In most cases, the ones who deposit the most get to vote.
• You may not have a huge BNB balance to deposit right away. The BNB governance model doesn't pressure you to pay immediately. If your initial deposit is not sufficient, you may choose to enter a deposit period status. This will allow you to slowly increase your deposits by sending DepositTXs.
• Binance uses a code-controlled escrow account to accept deposits before voting begins. This is one of the safest possible accounts on earth, with zero chances of online theft. The account is secured by a hard-coded string of security layers that follow the Binance chain standard. This type of escrow account doesn't have a private key. Only a single code controls its operations. Therefore, it makes your investment safe.
In addition to the rules related to voting for the governance model, there are a few global parameters that the Binance coin token follows.
• Minimum deposit – 1000 BNB is the threshold for submitting a proposal on the BNB mainnet program. You will become eligible to vote if you deposit at least 1000 BNB. Alternatively, you can also submit your proposal on testnet. For that, you need to deposit at least 2000 BNB.
• Deposit period – The global deposit period parameter for mainnet is two days and for testnet is two weeks. This means you can break down your payment into several installments, but you can't make the payment once the deposit period is over. For example, you can pay 500 BNB today and 500 BNB tomorrow for mainnet. If you can't pay the full amount in two days, you will lose your voting and proposal submission right.
• Fee – The checkout fee depends on order operations, such as order placement, order cancellation, order expiration, cancellation of IOC order, and order execution. You should take a look at the fee structure from the Binance exchange before making your deposit.
Who is on the Binance Team?
The Binance team has ten crucial members.
• Changpeng Zhao - CEO and Founder
• Ted Lin - CGO, Chief Growth Officer
• Yi He - Co-founder and CMO
• Catherine Coley - Chief Executive Officer
• Jarred Winn - Senior Vice President
• Gleb Kostarev - CIS and Eastern Europe, Russia
• Mai Lu - Vice President of Asia Pacific
• Jiho Kang - Director, Korea
• Iskander Malikov - Board Member
• Martin Bruncko – Advisor
Who funded Binance Coin?
Binance Coin managed to raise more than $25 million in 8 rounds of funding. Its latest fundraiser took place in December 2020 in an Initial Coin Offering round. The company has 13 primary investors. Some of the most notable names in the investors' list are:
• Vertex Ventures Southeast Asia & India
• Karnika Yashwant
• Vertex Ventures China
• Chris McCann
Apart from raising funds, Binance also makes investments in promising tokens and coins. It made its latest investment in Avanti Financial Group.
How to use the Binance Coin?
Binance Coin is one of the best evolving cryptocurrencies. You can use it on various payments, such as trading, credit card payments, transaction fees on the Binance exchange, payment processing, entertainment, booking travel arrangements, loans and transfers, and investments on stocks and ETFs.
Start investing in Binance coins now to enjoy its payment benefits. You may also choose to hold it for a few years and sell it later at a much higher price.