Binance is the world’s largest and most popular cryptocurrency exchange right now. Even though they only began their adventure in mid-2017, they have successfully become the world’s most famous crypto exchange since April 2018. It is not easy to maintain its number one position, especially when there are so many crypto exchanges out there always trying to innovate and lure traders to their own exchange. However, (so far) Binance has successfully done it.
Binance has its own native cryptocurrency that they call as Binance Coin or BNB. There are multiple use cases of Binance Coin and Binance’s huge popularity is actually one of the main reasons why BNB could stay in the top 10 crypto rankings by market cap.
But what is exactly BNB, and why does it matter? Let’s find out together with this article.
Brief History Of BNB
Binance opened its shop back in July 2017, with its Chief Executive Officer Changpeng Zhao (CZ) at its leader. CZ co-founded Binance with his associates, but most of the other co-founders are not really famous. CZ has a lot of popularity because he’s also very active on Twitter, and he often tweeted his opinions regarding what is currently happening on the crypto space (not just about Binance).
But, anyway, back to the story. CZ had some decent background where he used to work at blockchain.com (at the time it was blockchain.info), and he was also the Chief Technology Officer at OKCoin from June 2014 to February 2015.
He decided to create his own crypto exchange in 2017 and with the core team of Binance they decided to launch an initial coin offering (ICO) from July 1st to July 21st of 2017. At the time, there were 100 million BNB tokens successfully sold to the ICO participants.
In exchange, Binance successfully raised $15 million USD. There were also famous crypto names in the investors and advisors list for Binance – such as Roger Ver, Zhao Dong, Da Hongfei, and Matthew Roszak.
The great idea about Binance was that it introduced the concept of a crypto exchange’s token that would benefit from the exchange’s profitability. The main attraction of BNB was that Binance exchange would use a certain amount of its profit every quarter to buy back BNB tokens from the open market and burn them permanently.
By having this use case, people thought it would absolutely increase the price over the long-term as long as Binance exchange itself becomes successful (and it did).
Use Cases Of BNB
There are a lot of different use cases of BNB. One of the main use cases is the one I mentioned above, regarding how Binance exchange would use a certain amount of its profit every quarter to buy back BNB on the open market and burn them permanently. By having this specific use case, the natural demand for BNB every quarter would keep growing as long as Binance exchange remains profitable.
Another important use case for BNB is to be used as discounts for the fees on Binance exchange. These fees are trading fees, listing fees, and exchange fees. When you have BNB in your Binance account, you can get discounts on these fees, depending on your level and trading volume, etc.
These two use cases above are basically the main use cases of BNB. Once again, the vision here is that the more trading volume that Binance exchange has, the bigger the natural demand would be for BNB. Fortunately for BNB, Binance is literally the biggest crypto exchange in the world right now. According to BTI.live (Blockchain Transparency Institute), the verified 24h trading volume for Binance is above $1 billion, which is crazy.
There are, of course, several other use cases for BNB. One of them is to pay for gas fees on Binance Chain. For your information, Binance has its own blockchain now, which is called Binance Chain. It is utilized to power Binance DEX (Decentralized Exchange). Binance.com is basically the main exchange platform, while Binance.org is Binance DEX. BNB is the utility token of Binance Chain to pay for the gas fees.
Another use case for BNB is to participate in Binance Launchpad. For every new IEO that’s announced on Binance Launchpad, people can participate when they have a certain amount of BNB in their Binance account.
The Future Of Binance Is The Future Of BNB
What is great about BNB is that the natural demand is created directly from the demand for Binance exchange itself. The use cases that I mentioned above would be more than enough to pump BNB price in the long term as long as Binance exchange itself keeps growing (especially when it comes to trading volume and profitability).
Some blockchain projects don’t really have great token use cases. BNB has transformed the idea of crypto exchange tokens. There are many crypto exchanges who chose to issue their own exchange tokens by following BNB’s concept. Bitfinex’s UNUS SED LEO, Huobi’s Huobi Token, or OKEx’s OKB, all were inspired by BNB, even though they have differences, of course.
BNB used to be one of the hottest ICOs back in mid 2017, but now it has become one of the top 10 altcoins in the crypto rankings by market cap. It has one of the best ROIs over the timeline of 2 years and 7 months. It is believed that BNB will be able to become much more popular and might even occupy the top 3 spot if BNB can keep growing.
Even though the competition in the crypto exchange space is hard, but Binance has successfully proven itself in the eyes of crypto traders. Nowadays, many whales are trading on Binance, and they fully trust Binance over its competitions. It looks like BNB is one of the most trustable long-term investments in the altcoin space as long as Binance can remain relevant.