Binance Coin (BNB) is a cryptocurrency issued by the popular trading platform Binance. The coin runs natively on the Ethereum blockchain and follows the ERC20 technical token standard. It is classified as a utility token and can be used on the Binance exchange.
In July 2017, Binance held an Initial Coin Offering (ICO) for BNB which helped it to raise $15 million. During the ICO process, the company offered 10% of the total number of coins (BNB 20 million) to angel investors, 40% (BNB 80 million) to the founding team, and the remaining 50% (BNB 100 million) to other participants. Holders of the BNB coin are referred to as Binancians.
According to Binance’s whitepaper, half the funds raised during the ICO were earmarked for branding and marketing, one-third were used to build the Binance platform and perform necessary upgrades to the Binance ecosystem, and 15% were kept in reserve for emergencies.
The token was established with a total supply of 200 million, and a key influence on BNB’s value is Binance’s strategy to buy back a percentage of the coins and ‘burn’ them. Burning coins means taking them out of circulation and permanently destroying them. The benefit is that it increases the value of the remaining coins left in circulation. Binance has stated that it will use 20% of its profits from every quarter to buy back and burn BNB until the supply of the coin is 50% of the original amount (100 million BNB). Every buy-back transaction conducted by Binance is announced via the blockchain for transparency.
The BNB token itself has multiple uses, essentially being the underlying gas that powers the Binance ecosystem. For the first year, Binance offered a 50% discount on its exchange trading fees using the coin. In its whitepaper, Binance has outlined plans to offer annually decreasing discounts on fees for BNB users until its fifth year of operation.
There have been several other real-world use cases for BNB since its launch. In 2017 Monaco, which offers a Visa-branded credit card that converts cryptocurrencies into fiat payments, announced its plans to support BNB. It can also be used on Uplive, Asia’s premier high-end live video platform.
BNB has become more usable for goods and services in a growing number of brick and mortar establishments around the world. Australian startup TravelbyBit, for example, has equipped more than 150 establishments, including Brisbane Airport, with the ability to pay for goods and services using cryptocurrencies including BNB.
The token is also being used as a payment method on platforms made by blockchain startups such as crypto point-of-sale solutions provider Pundi X, blockchain payments company Crypto.com, and CoinPayments, which acts as a crypto point of sale for millions of online vendors around the globe. Binance also states that about 9 in 10 of its employees receive a portion of their salaries in the BNB token.