Binance Coin – BNB
Binance is one of the largest cryptocurrency exchanges and it so happens to have its own dedicated BNB token. Binance also offers a variety of ways to earn passive income which we will cover in this rapport.
Binance Coin – BNB is Binance Exchange’s very own dedicated token. Binance users can earn a discount on transaction fees when trading but it’s also possible to earn a continuous passive income with BNB. Needless to say, Binance Exchange has proven over the last years to remain among the leading cryptocurrency exchanges. Ranking first in the world based on exchange volume.
This review of Binance Coin – BNB was created for informational purposes. This article is not intended for promotion.
Binance Exchange is the largest cryptocurrency exchange in the space. Where initially the Binance Chain blockchain focussed only on the Binance exchange. Two years later Binance implemented Smart Contracts by creating a second blockchain, named Binance Smartchain.
Smart contracts are programs that run on the blockchain, mostly used to automate the execution of an agreement.
This way, Binance Smartchain allows people to create their own tokens or decentralized applications. The Binance Smartchain was forked (splitted) from Ethereum’s code but with a few changes that made it faster and cheaper.
Changpeng Zhao worked as a developer of high frequency trading software for stockbrokers and founded Fusion Systems in 2005.
In 2017 Zhao founded Binance. Its headquarters was originally based in China but due to the Chinese government’s increasing cryptocurrency regulations, they moved Binance’s headquarters out of China and into Japan. In March 2018, Binance declared it would open an office in Malta due to stricter cryptocurrency regulations in Japan. Binance is currently incorporated in the Cayman Islands.
In 2019 Binance was banned in the United States; “U.S. residents were no longer permitted to trade on Binance.com”
As a reaction Binance launched Binance.US where U.S. residents were allowed to trade. However, the U.S. version does not have as many trading pairs as the main trading website.
May 2021, Binance was put under investigation by the U.S. Department of Justice and the IRS. (Internal Revenue Service) on allegations of tax offenses and money laundering.
June 2021, Japan’s FSA (Financial Services Agency) warned Binance that it was not registered to do business in Japan. This was the second time the FSA warned Binance since a similar warning was issued back in March 2018.
June 2021, Binance was banned by the FCA (UK’s Financial Conduct Authority) from conducting any regulated activities in the United Kingdom.
At the moment of writing Binance does not share a whitepaper on the official Binance website. A whitepaper of only 17 pages is available at whitepaper.io/coin/binance.
Binance Coin – BNB is primarily used as a discount token on the Binance Exchange benefiting traders to get a discount on transaction fees. This discount has remained at 25% since 2019. BNB also acts as a fuel for the Binance Smart Chain’s DeFi ecosystem.
Binance Pay allows users to make fast payments with zero fees. You can access Binance Pay from the Binance App on your smartphone in order to send crypto to friends and family.
“Put your crypto to work” with Binance Earn and start saving. So, lean back and let your tokens do the growing.
Stake your tokens to generate a snowball effect and keep on earning interest or become a liquidity provider in DeFi markets in order to earn passive income on Bitcoin, Stablecoins, Altcoins, and more.
Binance promotes 10 different ways of earning passive income with Binance Earn with little to no fees. Some examples are: Flexible/Fixed Savings, BNB Vault, Launchpool, ETH 2.0 Staking, DeFi Staking and more.
An overview about the 10 ways of earning passive income, can be found in this Binance Blog post.
Binance Coin – BNB staking has increased in popularity.
By using BNB Vault, holders can stake their BNB tokens and lend them to others and earn interest on their tokens to create passive income. The annual percentage yield (APY) is currently estimated at 3.72%
Make sure to watch the informative video listed above, explaining BNB Vault. On the Binance Exchange it’s also possible to stake other tokens than BNB. Make sure to watch this official Binance video for 3 different ways on how you can stake your coins:
On the Binance Exchange you can use BNB to buy BUSD (Binance’s stablecoin). BUSD allows you to buy Non Fungible Tokens – NFT on Binance NFT and buy/sell your NFTs on its dedicated Binance NFT marketplace.
If you wish to be an early investor in Blockchain Gaming, this platform also allows people to buy into Gaming IGOs. These are Initial Game Offerings, solely based on Video Gaming.
For example, NFT’s can represent in-game content for blockchain video games that allows the player to customize his/her video gaming experience and in-game persona.
Just think about early-access passes, weapons, items, exclusive skins, and more.
In July 2020 Binance launched its debit card in Europe and the United Kingdom for users to make purchases via the Binance Card.
The Binance Card is a VISA debit card that converts your BTC, BNB, SXP and BUSD into fiat when you make a transaction. The debit card enables users to make daily transactions. According to Binance’s website; at over 60 million merchants across 200 regions and territories worldwide.
In Asia, the company ‘CoinHere’ opened an option to place 30 ATMs (automated teller machines) in Hong Kong and 3 ATMs in Taiwan with the use of local currencies.
Initially, 200 million BNB coins were minted. 50% were sold through an ICO (initial coin offering for early investors) in July of 2017 at $0.15 per coin, raising around 15 million dollars. 40% of BNB coins were reserved and are partially and annually given to the founding team. 10% were giving to private investors.
Interestingly, every three months the Binance company takes 20% of profits and buys back coins and permanently burns them. This decreases the total supply in order to raise the price. Binance will continue to do so until the supply reaches a total of 100 million coins.
We think that investing in coins from a leading cryptocurrency exchange is known to be less risky than the majority of altcoins.
At the moment of writing we are experiencing a severe fall-back or crash.
Despite the fall-back, BNB still has a very high valuation, probably due to increasing popularity in cryptocurrency.
At the start of 2021 to the May highs, Binance Coin’s value rose by over 1,700%. After reaching a bottom in May, June and July, BNB rose again by over 190%.
When considering investing in BNB in a short time frame, you have to take into account that BNB rose significantly during 2021 with an all-time high of around $650 whereas BNB Coin was just sitting around $40 in the beginning of 2021.
Being one of the leading cryptocurrency exchanges and having it’s very own Smart Chain, Binance continues on to expand its many applications and we may see more use cases for Binance Coin and its VISA debit card. Combined with the continuous burning of tokens, and different ways to earn passive income on Binance Earn, demand for BNB could potentially keep on increasing.
Disclaimer: Trading and investing in cryptocurrencies (also called digital or virtual currencies, altcoins) involves a substantial risk of loss and is not suitable for every investor. You are solely responsible for the risk and financial resources you use to trade crypto. The content on this website is primarily for informational purposes and does not constitute financial advice.