Binance Coin (BNB) is the native utility token that is used on the Binance exchange and other Binance products. It could be argued that BNB is one of the greatest utility tokens out there.
Utility tokens are tokens that actually have a purpose and a use case. BNB is consistently in the top 5 cryptocurrency rankings for a reason and that reason is real utility.
A lot of projects will boast that their token is a utility token, but under the hood, it is nothing more than a tokenised mess. Projects will tokenise anything and everything, Dentacoin for example… Yes, that is a utility token to pay people in the dental industry… I know, I know.
BNB is up there with the best utility tokens. But before we dive into that, let’s take a look at the history of BNB and its incredible founder Changpeng Zhao (CZ).
BNB started out as an ERC-20 token built on Ethereum (how times have changed). The token was released during the 2017 ICO boom releasing 100 million BNB at roughly $0.15/BNB ouch…
BNB current price –
Their very public CEO, CZ is a great follow on Twitter. He often likes to stir up some commotion by taking a shot at Ethereum which he has stated in a recent BSC news podcast he does on purpose as a marketing technique. It works…
CZ famously went from working in McDonald’s to progressively selling more and more of his possessions, including his house for Bitcoin and then onto creating Binance. A really great entrepreneurial story.
I can’t help but admire the guy, he spins so many plates in such a volatile market, it must be stressful beyond belief. But, from what I can tell from countless interviews and tweets, he is a chilled out and relaxed guy. He wore a hoodie on the front of Forbes magazine, that’s how chilled.
Getting back to BNB, the utility comes in many different ways which we will have a look at below. This list will become quickly outdated as there are more and more use cases for BNB popping up all the time. Not to mention the quarterly burn which we will go through later.
Trading on Binance – BNB is used as a utility token to trade on Binance, the biggest cryptocurrency exchange on the planet. Usually, a trade will cost around 0.1% max. If you use BNB to facilitate this trade you can expect a discounted trading fee from anywhere between 25-50% depending on your holdings of BNB.
Binance Chain – Not to be confused with BSC, the Binance chain which is slowly becoming a thing of the past is its own blockchain that operates to facilitate transactions of BEP2 tokens. This can often be confusing as BEP2 is awfully similar to BEP20 (BSC) and Binance chain is again, also very similar to Binance Smart Chain.
Regardless of this confusing mess, BNB is the native utility token and any transactions on the Binance Chain are paid for in BNB.
Binance Smart Chain – A lot more topical at the minute with the recent rise of BSC projects. CZ in a recent interview stated that BSC wasn’t at all his idea. A few members of the team asked he would greenlight the project and away they went. He only noticed through increasing Twitter activities that BSC was beginning to take off.
He is still outspoken about changing the name to Builders Smart Chain as he doesn’t like the connotation to Binance as he believes people will believe he is pulling the strings and also the fears of it being more centralised, decentralised finance (CeDeFi) than DeFi.
#BSC = Buidlers’ Smart Chainhttps://t.co/rT3rjhtKxO
— CZ 🔶 Binance (@cz_binance) April 13, 2021
Again BNB is used to facilitate all transactions on the Binance Smart Chain. If you transact on Pancake Swap, use a vault on Beefy Finance or Borrow on Venus, all of these interactions are paid for using BNB.
The recent rise isn’t something to be overlooked. This is a huge amount of activity. Pancake Swap alone just last week recorded around ¾ of the number of transactions seen across the whole Ethereum network!
#PancakeSwap‘s router had nearly 900k transactions yesterday.
For reference, the whole of the $ETH blockchain had 1.3M transactions yesterday. pic.twitter.com/43Ly7ubMXr
— PancakeSwap 🥞 #BSC (@PancakeSwap) April 9, 2021
Convert Small Balances – This is a great feature to clean up those dust accounts. Residual amounts of certain coins will be leftover in your Binance wallets following a trade. This can get frustrating as you can’t exactly do anything with them. Binance offers a function that allows you to convert small balances to BNB. This is great as it tidies up your wallets and also creates more buying pressure on BNB.
IEOs and Binance Launchpads – Binance host Initial Exchange Offerings (IEO), for more on IEOs, ICOs etc head to our recent complete guide HERE. Effectively, these are to crypto what IPOs are to stocks. The difference here is that to partake in the initial offering, you have to deposit BNB and buy the new coin using BNB.
Same with launchpads. Launchpads usually work in a format that sees a vesting period. This would mean that launchpads would require users to lock up their BNB for a period of time prior to the launch of the new project. Then once the vesting period is over, those eligible (usually through a lottery-style process to prevent whales from buying up the supply) will receive a notification telling them if they can then purchase the new project using their vested BNB or other BNB.
The recent rally of the back of Coinbase IPO – Those paying close attention will have seen the meteoric rise of BNB up to #3 in the crypto rankings. Although you could argue it deserves this spot, the rise was definitely caused by multiple factors.
Increasing BSC transactions, the overall bull run and the Coinbase IPO. So why does Coinbase IPO have anything to do with BNB going on a rampage? Especially when Coinbase doesn’t even list BNB.
Well across the board exchange coins have been on a bit of a mad run. I believe it is the general narrative of exchanges may opt to go public and if investors can buy their coins before this public sale then they may be on to a winner.
Kraken mentioned they may look to go public following the success of Coinbase.
If I was to guess if Binance would go public my guess would be no. A few headbutts with the SEC in the US and less than favourable conditions in Asia not to mention CZ recently stating in an article by Coindesk that he has no plans to go public.
Looking at the biggest cryptocurrency exchanges by volume you can see just how huge Binance and consequently BNB is. 15x more volume than Coinbase Pro and 7x more weekly visits.
That being said, I am unsure how the regular Coinbase fairs in comparison. I think the basic Coinbase would be very high on buy and sell orders, whilst intraday trading would be tiny due to their ridiculously high fees.
If CZ changes his mind and decided to go public, that could be the biggest valuation the world has ever seen. Don’t hold your breath.
But, never say never…
Binance recently hired ex-US senator Max Baucus to provide high-level guidance on navigating the highly regulated American markets. This could be a step in the right direction for Binance as its US customer is currently restricted to Binance US. This is a lite version of the app with a vastly reduced selection of markets.
A huge bullish case for coins not trading on Binance US is that once the US markets gain access to these trading pairs they could well indeed push the prices to the moon.
Finally, another utility for BNB is that there will soon be a Binance Card. This is a crypto card which will allow you to spend your crypto directly from the card. Why would you ever spend crypto? Well there are some people who are complete whole-coiners…
Yup, they have their entire balance in crypto and spend it as and when they need to. This may seem like a wild concept but I am edging ever closer to that myself.
Back in 2018, there was a very wild article that was released saying that 90% of the Binance employees got paid in BNB! They must be very wealthy right now…
The Binance card as far as we know is soon to be released and will allow users to top up in BNB or hold crypto in their wallet connected to their Binance account and spend directly.
Not only that they will receive cashback in crypto for doing so. The whole process is powered by Swipe (SXP) as they also have a CeFi business that handles Visa payments through their swipe services.
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