Binance Coin (BNB) – Overview, History and Uses


Binance is one of the leading Cryptocurrency exchanges, offering the highest liquidity in the spot and derivatives market among its peers like Kraken, Kucoin, etc. 

It’s the world’s largest crypto exchange with a total of 28.6 mn users and daily average trading volume of around $12.7 bn. 

Initially, Binance coin was launched as an ERC- 20 token until April 2019 when they launched their own public blockchain, Binance Chain, which allowed for swapping of ERC-20 BNB tokens to its own chain. The team then built a decentralized exchange known as Binance DEX on top of Binance Chain, allowing traders to maintain custody of their funds. 

A remarkable benefit of the Binance Smart chain is that it charges extremely low gas fees.

Binance Smart Chain(BSC), which is the native blockchain network of Binance, has observed an increase in a number of unique addresses from 183M to 219M, a 19% increase in last 3 months (Aug-Nov’22) and it currently handles an average 3.4M transactions per day. 

About BNB:

BNB is the native utility token of Binance Chain to be used as gas to pay for network transactions. Binance would burn an amount of BNB equivalent to 20% of its quarterly profit until the outstanding supply (supply that exists on-chain) reaches 100 million BNB. 

The 21st BNB burn took place on October 13 2022 destroying 2,065,152.42 BNB, over $546 million worth of BNB.This is a significant amount more than the 20th BNB burn which destroyed 1,955,413.52 BNB.

It is imperative to note that there exists a Centralisation issue in terms of token ownership as the top 100 holders collectively own 99.09% (16,429,292 Tokens) of BNB.

Token Allocation:

As the crypto industry is in its nascent stage and needs to scale its worldwide adoption, community growth incentives play a critical role in token economics. However, looking at the BNB token allocation, there isn’t a mention of the community incentives. Many other infrastructures like Matic Network rewards their community leaders and partners which have helped them in gaining adoption. 

200 million Binance Coins (BNB) were pre-mined by Binance prior to the public offering. The distribution of tokens is as follows— 

  • Founders obtained BNB 80 million (40% of supply) over four years. Half of the token supply allocated to the founders was vested immediately. 
  • With no vesting or lock-up limitations, investors obtained 20 million BNB (10 per cent of supply). 
  • 100 million BNBs were distributed via public sales (50 per cent of supply).

Technologies used:

Binanc smart chain uses cross-chain compatibility and proof of stake consensus to carry out its operations:

Cross-chain Compatibility:

This feature of BSC helps effortlessly transfer assets between blockchains without needless complications.

Dual-chain architecture, which was incorporated into the design of BSC, will give consumers a straightforward trading experience with quick asset transfers and developers the ability to create dApps on the platform that can be easily exported.

The ability for users to exchange BEP-2 tokens for BEP-20 tokens is an illustration of the usefulness of the cross-chain functionality. This exchange can be carried out simply through the Binance Chain Wallet, which is easily accessible through a Binance Chain extension of Mozilla Firefox or Google Chrome.

Proof of stake mechanism:

Utilizing a Proof-of-Stake consensus mechanism, Binance Smart Chain chooses randomly which node will validate a block depending on a number of variables like node wealth, chance, and stake age.

A Proof-of-Staked Authority consensus is used, namely on the Binance Smart Chain, where players risk their BNB in an effort to become validators. This approach is justified by the idea that participants will get a transaction fee if a valid block is offered.

The Binance Smart chain achieves network consensus and upholds blockchain security by combining delegated PoS with proof-of-authority. PoA is renowned for its ability to fend off 51% attacks and its tolerance for Byzantine faults, according to CoinMarketCap.

The Team:

  • Changpeng Zhao
  • CEO at Binance.
  • Founded Bijie Tech- Exchange systems provider.
  • Former Head of Development at Blockchain.
  • Former Partner at Fusion Systems.
  • Worked as Head of Tradebook Futures Development at Bloomberg.
  • Roger Wang
  • Co-Founder and CTO at Roger co. LTD
  • Worked as Tech leader at Nomura Securities
  • Worked as Tech Leader at Morgan Stanley
  • Yi He
  • Co-Founder and CMO at Binance.
  • Co-Founder of OKCoin

Binance hosts a well-experienced and knowledgeable team with a good academic and professional background. It consists of members with experience of serving in influential roles like Yi He was the Co-Founder of OKCoin- the largest Chinese Crypto-to-Fiat Exchange.

The CEO of Binance, Changpeng Zhao, or CZ, is among the most vocal businessmen in the crypto industry, who has developed a very positive public profile and has a large social media following.

Binance in the latest news:

Binance partners with Chirstiano Ronaldo:

Binance announced its partnership with Portuguese soccer icon Cristiano Ronaldo to launch a non-fungible token (NFT) collection. Reportedly, the NFT collection will, for the first time, give soccer fans unprecedented access to CR7 as he is popularly known. The NFTs will be available on Binance’s NFT platform on Nov. 18, just ahead of the start of the FIFA World Cup in Qatar on Nov. 20. 

The Binance-FTX Deal:

The world’s largest crypto exchange on Nov 6 revealed that they have signed a deal to buy FTX ahead of the “Liquidity crunch” faced by the exchange.

However, the Binance CEO Changpeng Zhao took a U-turn from the deal of rescuing FTX citing the reason of “problems with the company’s finances as well as potential regulatory investigations”.

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